Supervision and Regulation.
§ 54-109.10. Creation and supervision of Division.
There shall be established in the North Carolina Department of Commerce a Credit Union Division which shall be under the supervision of the Administrator of Credit Unions appointed by the Secretary of Commerce. The Credit Union Division and the Administrator of Credit Unions shall be under the general direction and supervision of the Secretary of Commerce, and there shall be such assistants to the Administrator of Credit Unions as may be necessary and the salaries of the Administrator and assistants shall be fixed by the State Personnel Council. (1915, c. 115, s. 1; C.S., s. 5208; 1925, c. 73, s. 4; 1935, c. 87; 1965, c. 956, s. 1; 1971, c. 864, s. 17; 1975, c. 538, s. 1; 1989, c. 751, s. 9(c); 1991 (Reg. Sess., 1992), c. 959, s. 3.)
§ 54-109.11. Duties of Administrator.
The duties of the Administrator shall be as follows:
(1) To organize and conduct in the State Department of Commerce, a bureau of information in regard to cooperative associations and rural and industrial credits.
(2) Upon request, to furnish, without cost, such printed information and blank forms as, in his discretion, may be necessary for the formation and establishment of any local credit union in the State.
(3) To maintain an educational campaign in the State looking to the promotion and organization of credit unions. Upon the written request of 12 bona fide residents of any particular locality in this State expressing a desire to form a local credit union at or in such locality, the Administrator of Credit Unions, or one of his assistants, shall proceed as promptly as may be convenient to such locality and make an investigation in order that the Administrator may determine whether or not a local credit union should be established according to the standards set forth and provided in this Article. The Administrator shall notify the applicants of his decision within 30 days after receipt of the written request. Before refusing the establishment of a credit union, the Administrator shall afford the applicants an opportunity to be heard therewith in person or by counsel and at least 60 days prior to the date set for a hearing on any such matter shall notify in writing the applicants of the date of said hearing and assign therein the grounds for the action contemplated to be taken and as to which inquiry shall be made on the date of such hearing. The determination of the Administrator shall be subject to judicial review in all respects according to the provisions and procedures set forth in Chapter 150B of the General Statutes of North Carolina, as amended.
(4) To examine at least once every 18 months, or more often if an examination is deemed necessary by the Administrator or the Administrator's assistant, the credit unions formed under Article 14A of this Chapter. A report of the examination shall be filed with the State Department of Commerce, and a copy mailed to the credit union at its proper address.
(5) The Administrator is authorized, empowered, and directed to fix the amount of a blanket surety bond which shall be required of each credit union official, committee member and employee, irrespective of whether such official, committee member and employee receives, pays or has custody of money or other personal property owned by a credit union or in the custody or control of the credit union as collateral or otherwise. The surety on the bond shall be a surety company authorized to do business in North Carolina. Any such bond or bonds shall be in a form approved by the Administrator and subject to the rules adopted by the Administrator.
It shall be the duty of the board of directors of each credit union to obtain bond (and insurance) coverage in excess of the minimum required by the Administrator if the board determines additional coverage is appropriate in relation to potential risks facing the credit union. The treasurer and all other persons handling credit union funds or records before entering upon his or their duties shall give a proper bond with good and sufficient surety, in an amount and character to be determined by the board in compliance with regulations conditioned upon the faithful performance of his or their trust.
The Administrator may require additional coverage for any credit union when, in the Administrator's opinion, the surety bonds in force are insufficient to provide adequate surety coverage, and it shall be the duty of the board of directors of any credit union to obtain such additional coverage within 60 days after the date of written notice by the Administrator to such board of directors. For good cause shown, the Administrator may extend the time to obtain additional coverage. (1915, c. 115, s. 1; C.S., s. 5209; 1925, c. 73, ss. 2, 3, 5, 6; 1935, c. 87; 1957, c. 989, s. 1; 1965, c. 956, ss. 1-3; 1971, c. 864, s. 17; 1973, c. 199, ss. 1-3; c. 1331, s. 3; 1975, c. 538, s. 1; 1977, c. 559, s. 1; 1987, c. 827, s. 1; 1989, c. 751, s. 7(2); 1991 (Reg. Sess., 1992), c. 959, ss. 4, 4.1; 2017-25, s. 4(a); 2026-31, s. 11(h).)
§ 54-109.12. Corporations organized hereunder subject to Administrator of Credit Unions; rules and regulations.
In addition to any and all other powers, duties and functions vested in the Administrator of Credit Unions under the provisions of this Article, the Administrator of Credit Unions shall have general control, management and supervision over all corporations organized under the provisions of Article 14A. All corporations organized under the provisions of Article 14A shall be subject to the management, control and supervision of the Administrator of Credit Unions as to their conduct, organization, management, business practices and their financial and fiscal matters. The Administrator of Credit Unions may prescribe rules and regulations for the administration of this Article, as well as rules and regulations relating to financial records, business practices and the conduct and management of credit unions, and it shall be the duty of the board of directors and of the various officers of the credit union to put into effect and to carry out such regulations. (1915, c. 115, s. 7; C.S., s. 5237; 1925, c. 73, s. 3; 1935, c. 87; 1957, c. 989, s. 6; 1965, c. 956, ss. 1, 22; 1975, c. 538, s. 1; 1979, c. 198.)
§ 54-109.13. Revocation of certificate; liquidation.
If any such corporation shall neglect to make its annual report, as provided in this Article, or any other report required by the Administrator of Credit Unions for more than 15 days, or shall fail to pay the charges required, including the fines for delay in filing reports, the Administrator of Credit Unions shall give notice to such corporation of his intention to revoke the certificate of approval of the corporation for such neglect or failure, and if such neglect or failure continues for 15 days after such notice, the said Administrator shall, at his discretion, personally or by an agent appointed by him, take possession of the property and business of the corporation and retain possession until such time as he may permit it to resume business, or until its affairs be finally liquidated as provided for in G.S. 54-109.93. (1915, c. 115, s. 7; C.S., s. 5240; 1925, c. 73, ss. 3, 8; 1935, c. 87; 1957, c. 989, s. 8; 1965, c. 956, s. 1; 1975, c. 538, s. 1.)
§ 54-109.14. Fees and penalties.
(a) Each credit union subject to supervision and examination by the Administrator, including credit unions in process of voluntary liquidation, shall pay into the office of the Administrator twice each year, in the months of January and July, supervision fees. A credit union that liquidates or converts its charter shall pay into the office of the Administrator, to the date of dissolution, pro rata supervision fees. Examination fees shall be paid promptly upon receipt of the examination report and invoice.
The Administrator, subject to the advice and consent of the Commission, shall, on or before December 1 of each year, determine and fix the scale of supervisory and examination fees to be assessed during the next calendar year.
No credit union shall be required to pay any supervisory fee until the expiration of 12 months from the date of the issuance of a certificate of incorporation to the credit union.
(b) The Administrator may charge other fees for service and supervision as approved by the Commission. Moneys collected under this section shall be deposited with the State Treasurer of North Carolina and expended, under the terms of the Executive Budget Act, to defray expenses incurred by the office of the Administrator in carrying out its supervisory and auditing functions.
(c) All revenue derived from fees will be placed into a special account to be administered solely for the operation of the Division.
(d) The Administrator may waive any fee, in whole or in part, for any credit union or group of credit unions at the Administrator's discretion.
(e) The Administrator may assess a civil penalty not to exceed five hundred dollars ($500.00) for the violation of any section of Articles 14A to 15A of this Chapter or any rule adopted by the Administrator. The clear proceeds of any civil penalty assessed under this subsection or pursuant to any other authority in Articles 14A to 15A of this Chapter shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C-457.2. (1915, c. 115, s. 7; C.S., s. 5238; 1925, c. 73, ss. 3, 7; 1935, c. 87; 1941, c. 235; 1955, c. 1135, ss. 3, 4; 1957, c. 989, s. 7; 1965, c. 956, ss. 1, 23, 24; 1969, c. 69, s. 6; 1971, c. 864, s. 17; 1973, c. 199, s. 12; 1975, c. 538, s. 1; 1977, c. 559, ss. 2, 3; 2026-31, s. 11(b).)
§ 54-109.15. Reports.
(a) The Administrator shall cause credit unions organized under Articles 14A to 15A of this Chapter to make a report of condition to the Administrator in a manner and on a schedule as adopted by the Administrator. The Administrator may also require that additional reports be filed.
(b) The Administrator may cause any credit union that neglects to make reports as provided in subsection (a) of this section, or any of the other reports required by the Administrator at the time fixed by the Administrator, to pay a late penalty to the Administrator of not less than seventy-five dollars ($75.00), nor more than seven hundred fifty dollars ($750.00) for each day the neglect continues. The clear proceeds of penalties collected pursuant to this subsection shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C-457.2. The Administrator shall publish the late penalty amount annually by rule. (1915, c. 115, s. 7; C.S., ss. 5238, 5240; 1925, c. 73, ss. 3, 7, 8; 1935, c. 87; 1941, c. 235; 1955, c. 1135, ss. 3, 4; 1957, c. 989, ss. 7, 8; 1965, c. 956, ss. 1, 23, 24; 1969, c. 69, s. 6; 1971, c. 864, s. 17; 1973, c. 199, s. 12; 1975, c. 538, s. 1; 1991, c. 651, s. 2; 2005-276, s. 6.37(u); 2026-31, s. 11(b).)
§ 54-109.16. Examinations required; payment of cost.
The Administrator shall examine every credit union formed under Articles 14A and 15A of this Chapter once every 18 months or more frequently if deemed necessary by the Administrator. The examiners appointed by the Administrator shall be given free access to all books, papers, securities, electronic or digital records, and other sources of information with respect to the credit union; for the purpose of the examination, the Administrator may subpoena and examine personally, or by one of the Administrator's deputies or examiners, witnesses on oath and documents, whether the witnesses are members of the credit union or not, and whether the documents are documents of the credit union or not. The Administrator may designate an independent auditing firm to conduct the examinations under the Administrator's direction and supervision, with the cost to be paid by the credit union involved. (1915, c. 115, s. 7; C.S., s. 5239; 1925, c. 73, s. 3; 1935, c. 87; 1965, c. 956, ss. 1, 25; 1969, c. 69, ss. 7, 8; 1975, c. 538, s. 1; 1977, c. 559, s. 4; 2017-25, s. 4(b); 2026-31, s. 11(b).)
§ 54-109.17. Records.
(a) A credit union shall maintain all books, records, accounting systems and procedures in accordance with rules adopted by the Administrator. In adopting these rules, the Administrator shall consider the relative size of a credit union and its reasonable capability of compliance.
(b) A credit union is not liable for destroying records after the expiration of the record retention time adopted by the Administrator.
(c) A credit union may cause any or all records kept by it to be recorded, copied, or reproduced by any photographic, reproduction, electronic, or digital process or method, or by any other records retention technology approved by rule or order of the Administrator, of a kind that is capable of accurately converting the records into tangible form within a reasonable time. Each converted tangible form of record also is deemed a record. (1973, c. 98, s. 1; 1975, c. 538, s. 1; 2026-31, s. 11(b).)
§ 54-109.18. Repealed by Session Laws 2026-31, s. 11(b), effective July 1, 2026.
§ 54-109.18A. Hearings and appeals.
(a) Unless otherwise stated in this Chapter, administrative hearings required or permitted to be held by the Administrator shall be conducted in accordance with Article 3A of Chapter 150B of the General Statutes.
(b) After a hearing under subsection (a) of this section, a party aggrieved may appeal the decision or order of the Administrator or designee of the Administrator to the Commission for appellate review by filing with the Administrator a written notice of appeal no later than 30 days after the day that the Administrator's decision or order is served. Upon receipt of a notice of appeal, the Administrator shall, within 30 days of the notice, certify to the Commission the record on appeal. The notice of appeal shall state the grounds for the appeal and set forth in numbered order the assignments of error for review by the Commission. Failure to state the grounds for the appeal and assignments of error constitutes grounds to dismiss the appeal. Failure to comply with the briefing schedule provided by the Commission also constitutes grounds to dismiss the appeal. The Commission shall review the record on appeal, hear oral arguments by the parties, and make a written final decision or order no later than 60 days after the date of oral arguments.
(c) A party to a proceeding before the Commission under subsection (b) of this section is entitled to judicial review of the decision or order in accordance with Article 4 of Chapter 150B of the General Statutes.
(d) Notwithstanding any other provision of law, the hearing officer at administrative hearings conducted under subsection (a) of this section may be the Administrator or a designee of the Administrator. (2026-31, s. 11(b).)
§ 54-109.19. Removal of officers.
(a) If the Administrator finds that an officer, director, committee member, or employee of any credit union doing business under Articles 14A to 15A of this Chapter is deceitful, incompetent, grossly negligent, or reckless in the management of the affairs of the credit union, has been convicted of a felony, has been convicted of a misdemeanor involving fraud or dishonesty, has breached the trust of the members, or has persistently violated the laws of this State or the orders issued or rules adopted by the Administrator or the Commission, the Administrator may take one or both of the following actions:
(1) Remove the director, officer, committee member, or employee from office.
(2) Prohibit the director, officer, committee member, or employee from participating in the conduct of the affairs of a credit union or credit union service organization.
(b) A notice of removal of a director, officer, committee member or employee from office shall contain a statement of the alleged facts constituting the grounds for it and information on how the removed party may appeal the removal to the Commission, including contact information to initiate an appeal. The removal is effective immediately upon service of the notice of removal.
(c) A director, officer, committee member, or employee served written notice of removal has the right to a hearing before the Commission and shall request a hearing within 30 days of the service of the notice of removal.
(d) The hearing shall be fixed for a date no later than 30 days after service of the notice for request for hearing unless a later date is set by the Commission at the request of the removed party and for good cause shown. If the removed party does not seek a hearing within the 30-day time frame, the removed party is deemed to have consented to the removal and the removal is deemed final.
(e) Upon a request for hearing, or upon scheduling a discretionary hearing on its own initiative, the Commission shall review the facts of the case and hear from the Administrator and the removed party. The Commission shall determine whether the preponderance of the evidence supports removal. Upon completion of the hearing, the Commission shall issue an order that does one of the following:
(1) Overturns the removal and reinstates the removed party.
(2) Upholds the removal in full.
(3) Modifies the removal into a suspension of a defined period. The order remains effective and enforceable except to the extent that it is stayed, modified, terminated, or set aside by a later action of the Commission or a reviewing court. (1979, c. 197, s. 1; 2026-31, s. 11(b).)
§ 54-109.20. Additional authorities of the Administrator.
(a) In the event of a natural disaster or other national, regional, State, or local emergency, the Administrator may temporarily waive or suspend requirements for compliance by one or more credit unions with any provisions of this Chapter or with any rules if the Administrator deems it in the public interest.
(b) The Administrator may issue and serve upon a credit union an order to cease and desist from one or more unsafe or unsound practices or violations if, in the opinion of the Administrator, a credit union is engaging or has engaged, or there is reasonable cause to believe a credit union is about to engage, in an unsafe or unsound practice, or is violating or has violated, or there is reasonable cause to believe a credit union is about to violate, this Chapter or any other applicable statute, rule, regulation, or order. An order to cease and desist shall contain a statement of the facts constituting the alleged violations or unsafe or unsound practices, and the order may require, in terms that may be mandatory or otherwise, a credit union, its officers, directors, employees, or agents to cease and desist from the practices or violations. The order shall specify its effective date and shall contain a notice to the credit union of its right to a hearing on the order in accordance with rules adopted by the Administrator.
(c) The Administrator may conduct an investigation, including conducting background checks, of any credit union employee, officer, director, or committee member when considering applications for new charters, changes to those positions in credit unions in a troubled condition, a managing agent or manager in a conserved credit union, or when the Administrator has reason to believe the credit union employee, director, or committee member affected or is likely to affect the safety or soundness of the credit union. (2026-31, s. 11(b).)