Article 2 - Examinations and Reports

California Financial Code — §§ 14250-14257

Sections (8)

Amended by Stats. 2021, Ch. 762, Sec. 1. (SB 269) Effective January 1, 2022.

(a)(1) The commissioner may at any time investigate into the affairs and examine the books, accounts, records, files, and any office within or outside of this state used in the business of every credit union, whether it acts or claims to act under or without authority of this division.

(2)The commissioner and the commissioner’s duly designated representatives shall have free access to the offices and places of business, books, accounts, papers, records, files, safes, and vaults of a credit union referred to in paragraph (1).

(3)The officers and employees of a credit union being examined shall exhibit to the

examiners, on request, any or all of its securities, books, records, and accounts and shall otherwise cooperate with the examination so far as it is in their power.

(b)(1) The commissioner shall examine every credit union organized under the laws of this state to the extent and whenever and as often as the commissioner shall deem it advisable but in no case less than once every two years.

(2)For purposes of this subdivision, an examination made by the commissioner in conjunction with or with assistance from the National Credit Union Administration or a credit union regulatory agency of another state of the United States is deemed to be an examination made by the commissioner.

(3)For purposes of

this subdivision, an examination made by the National Credit Union Administration pursuant to an alternating examination schedule approved by both the commissioner and the National Credit Union Administration is deemed to be an examination made by the commissioner.

(4)This subdivision does not require the commissioner to make an examination onsite at the offices of a credit union.

§ 14251

Repealed and added by Stats. 1979, Ch. 112.

The commissioner upon the written consent of any credit union officer or director may make any examination of the credit union in any regularly established office of the commissioner.

§ 14252

Amended by Stats. 2016, Ch. 353, Sec. 2. (AB 2274) Effective January 1, 2017.

(a)A credit union with total assets equal to or greater than ten million dollars ($10,000,000) shall, within 105 days after the end of each fiscal year or within any extended time that the commissioner may specify, file with the commissioner an audit report for the fiscal year.

(b)The audit report called for in subdivision (a) shall comply with all of the following provisions:

(1)The audit report shall contain the audited financial statements of the credit union for, or as of the end of, the fiscal year, prepared in accordance with generally accepted accounting principles that the

commissioner may specify, and any other information that the commissioner may specify.

(2)The audit report shall be based upon an audit of the credit union, conducted in accordance with generally accepted auditing standards, and any other requirements that the commissioner may specify.

(3)The audit report shall be prepared by an independent certified public accountant or independent public accountant who is acceptable to the commissioner.

(4)The audit report shall include, or be accompanied by, a certificate or opinion of the independent certified public accountant or independent public accountant that is satisfactory in form and content to the commissioner. If the certificate or opinion is qualified, the

commissioner may order the credit union to take any action that the commissioner may find necessary or advisable to enable the independent certified public accountant or independent

public accountant to remove the qualification.

(c)A credit union with total assets of less than ten million dollars ($10,000,000) shall, within 105 days after the end of each fiscal year or within any extended time that the commissioner may specify, file with the commissioner an audit report for the fiscal year.

(d)The audit report called for in subdivision (c) may comply with all the provisions of subdivision (b), or may consist of alternative procedures acceptable to the commissioner. An alternative procedures audit may be performed by any of the following:

(1)An independent certified public accountant.

(2)An independent public

accountant.

(3)The credit union’s supervisory or audit committee, as applicable, provided that the audit complies with the requirements of Section 14253.

(e)Notwithstanding subdivision (d), the commissioner may reject an alternative procedures audit that he or she determines is not satisfactory. If the commissioner rejects an alternative procedures audit for any reason, he or she may order a credit union to obtain an audit that is satisfactory to the commissioner.

(f)The commissioner may, by order or regulation, either unconditionally or upon specified terms and conditions, grant an exemption from this section in any case where the commissioner finds that the requirements of this section are not necessary or advisable.

§ 14253

Repealed and added by Stats. 1979, Ch. 112.

A credit union shall, when requested by the commissioner, submit its unaudited financial statements, prepared in accordance with generally accepted accounting principles and consisting of at least a balance sheet and statement of income as of the date and for the period specified by the commissioner. The commissioner may require the submission of such reports on a monthly or other periodic basis.

§ 14254.5

Amended by Stats. 2014, Ch. 64, Sec. 15. (AB 2742) Effective January 1, 2015.

(a)Except as provided in subdivisions (b) and (c), within 10 business days of opening, closing, or relocating a branch office, a credit union shall notify the commissioner in writing of the action, including the street and mailing addresses of the branch office.

(b)A credit union shall not establish a branch office in another state of the United States without the approval of the governmental authority with jurisdiction to license or charter credit unions in that state. “State” has the meaning set forth in Section 207.

(c)A credit union shall not establish a branch office in a foreign nation without the prior written approval of the commissioner. “Foreign nation” has the meaning set forth in Section 175.

§ 14255

Repealed and added by Stats. 1979, Ch. 112.

Every credit union shall make other special reports to the commissioner as the commissioner may from time to time require. Such reports shall be in the form and filed at such date as prescribed by the commissioner, and shall if required by him, be verified in such manner as he prescribes.

§ 14256

Amended by Stats. 2014, Ch. 64, Sec. 16. (AB 2742) Effective January 1, 2015.

(a)If any credit union fails to file with the commissioner any report required by this division on or before the day designated for the filing of the report or, if the time for filing the report is extended by the commissioner, within the extended time, or fails to include in the report any matter required by the commissioner, the failure is grounds for the suspension or revocation of the certificate authorizing the credit union to act as a credit union.

(b)If any credit union fails to file with the commissioner any report required by this division or by any order or regulation of the commissioner, on or before the day designated for the filing of the report or, if the time for filing the report is extended by the

commissioner, within the extended time, or fails to include in the report any matter required by the commissioner, the commissioner may order the credit union to pay to the commissioner a civil penalty imposed pursuant to Section 329.

§ 14257

Amended by Stats. 2021, Ch. 615, Sec. 109. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615.

Investigation and examination reports prepared by the commissioner’s duly designated representatives shall not be public records. The reports may be disclosed to the officers, directors, members of the supervisory committee, members of the credit committee, and key management personnel of the credit union that is the subject of a report for the purpose of corrective action by those persons. The examination report may also be disclosed to internal and external auditors and attorneys that are retained by the subject credit union, but only to the extent necessary for the auditors and attorneys to perform work related to issues addressed in the examination report. The disclosure shall not operate as a waiver of the exemption

specified in Section 7929.000 of the Government Code.