Section 5-17-3

Published: 2015

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Section 5-17-3

Section 5-17-3Use of words "credit union" in name or title.

It shall be a misdemeanor for any person, association, copartnership, or corporation, except corporations organized in accordance with the provisions of this chapter, credit unions incorporated under the laws of the United States, the trade associations of credit unions doing business in this state, and other organizations as approved by the administrator, to use the words "credit union" in their name, title, or in advertising. A credit union organized under the provisions of this chapter shall include in its corporate name or title the words "credit union." Any violation of this prohibition shall subject the party chargeable therewith to a penalty of five hundred dollars ($500) for each day, with a maximum amount of fifty thousand dollars ($50,000), during which the violation is committed or repeated. The penalty may be recovered by the administrator by an action instituted for that purpose, and, in addition to the penalty, the violation may be enjoined and the injunction enforced as in other cases. If the directors, officers, or those persons performing similar functions as corporate directors or officers of any entity shall knowingly and willfully violate or knowingly and willfully permit any of the officers, agents, employees, or those persons performing similar functions of the entity to violate any of the provisions of this section, each director, officer, or other person engaging in the violation shall be liable in his or her personal and individual capacity for all damages which the entity or any other person shall have sustained in consequence of the violation. Provided, however, that a credit union organized in another state may conduct business as a credit union in this state with the prior approval of the Administrator of the Alabama Credit Union Administration provided all of the following criteria are met:

(1) It is organized under laws similar to Alabama credit union laws.

(2) It is financially solvent.

(3) Alabama credit unions are allowed to do business in the other state under conditions similar to these provisions.

(4) It maintains member account insurance comparable to that required for Alabama credit unions.

(5) It agrees to submit to the administrator an annual examination report from its supervising agency.

(6) The interest rate on loans made in Alabama does not exceed that allowed by Alabama law.

(7) It complies with the same consumer protection provisions that are applicable to Alabama credit unions.

(8) It designates and maintains an agent for the service of process in Alabama.

(Acts 1927, No. 597, p. 696; Code 1940, T. 28, §284; Acts 1975, No. 561, p. 1267, §3; Acts 1983, No. 83-772, p. 1407, §1; Acts 1985, No. 85-457, p. 425, §6; Act 2014-317, §1.)

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