JOHN CARLOS I

KING OF SPAIN

To all who present it and understand it.

Sabed: That the General Courts have approved and I come to sanction the following Law:

Article 129.2 of the Spanish Constitution mandates that the public authorities encourage, through appropriate legislation, the Cooperative Societies. This mandate, in terms of Cooperatives in general, has been met In the case of the case-law of the European Union, the Commission has taken into account the fact that, in the light of the Commission's proposal, the Commission has taken the necessary measures to ensure that the aid is not legislation in force until the entry into force of the same Law, with the particularities that are set in the same.

The Government has prepared a Credit Union Law that will comply with Article 129.2 of the Constitution regarding the promotion of these types of cooperative societies to the extent that this is possible. from the State's competitive titles.

As we know, the law of the State has only an additional right in relation to that of the Autonomous Communities with full legislative powers in the field of cooperatives. this general rule is qualified, in the particular case of the Credit Union as a result of the Royal Legislative Decree 1298/1986 of 28 June, adapting the legal rules governing the establishment of credit to the Legal Order of the European Economic Community, the nature of credit institutions, as well as private banks, is granted to the credit unions registered in the special register of the Banco de España, Savings banks or the Official Credit Entities.

Such clarifications stem from the fact that Article 149.1 of the Constitution, in its first paragraph, provides for the exclusive competence of the State to lay down the basis for the Management of Credit and Banking. This Law sets out what these bases are for the Credit Union, including, however, other precepts which do not have this character in order to provide for extra rules to be applied in the absence of regional legislation, although these are specifically related to the Final Disposition of agreement with the most recent demands of the Constitutional jurisprudence.

In conclusion, this Law is not intended to provide a complete and comprehensive regulation of all aspects of Credit Union, but only to establish the basis of the legal regime of these institutions as soon as possible. credit institutions, which the State is required to make under Article 149.1.11 of the Constitution.

The Law is structured into twelve articles, an additional provision, two transitional, two endings, and a repeal.

The text starts with the general principles, where they are defined as the Credit Union, given the character of a credit institution with the application of the Law of Cooperatives and the number is established unlimited of its members along with the responsibility of the same for the debts of the Cooperatives up to the value of their contributions. in the same way, the legal regime applicable to these Cooperatives and the particularities of the name of the Cooperatives are fixed.

In a consistent manner with the rating as Credit Entities that has been referred to above, they are allowed to perform the same operations as these entities, although with special attention to the needs financial partners.

The Law refers to the constitution and operation of these cooperatives, taking inspiration from the principles of agility in processing and equating with the rest of the credit institutions by enrolling in the Records, both from the Banco de España and Mercantil, and in the corresponding Cooperativas.

The requirements to be met by the partners of these entities and the assumptions in which the delegation of the vote is admissible are also set out. as a consequence of its character as a credit institution, the form of calculation of profit or loss is regulated and the distribution of the profit is disciplined, seeking to satisfy the cooperative principles, as well as to guarantee the solvency of these entities and, consequently, their liability to third parties.

The ninth article is intended for the social organs, where the General Assembly, the Governing Council and the Directorate are distinguished, setting out the respective competences of each of them and their operating rules, In the case of the Rector Council and the Directorate, the Autonomous Communities shall lay down other rules of a different nature, while respecting the basic rules laid down by the State.

Finally, the Law refers to merger and division, accounting and disciplinary arrangements.

These rules seek to ensure solvency, to avoid alleged abuse at the expense of the entity and to ensure its perfect functioning within the financial system in which they are included.

The Second Final Provision comes to comply with the most recent constitutional case law regarding the need to clearly state in the Law that precepts are of a basic character and which others lack character.

Article first. Nature.

1. Credit cooperatives are the companies incorporated under this Law, whose social object is to serve the financial needs of their partners and third parties through the exercise of the credit institutions ' own activities.

2. Credit Unions have their own legal personality.

3. The number of its members is unlimited and the responsibility of the same for the social debts reaches the value of their contributions.

Article 2. Legal regime.

Credit Unions shall be governed by this Law and its implementing rules, without prejudice to the latter, of the provisions that may be adopted by the Autonomous Communities in the exercise of the powers conferred on them by the have been allocated in this field. They shall also apply to them the rules which, as a general rule, govern the activity of credit institutions. The Law of Cooperatives shall apply to them.

Article 3. Name.

1. The term Credit Union or its abbreviation Coop. Credit can only be used by the entities defined in this Law and must necessarily be included in its name.

2. A name identical to that of another pre-existing company, of credit or other nature, may not be adopted.

Also, Credit Union (s) may not make any misleading or misleading names in relation to its scope or social object or other type of entity.

3. Only Credit Union (s) whose main object is the provision of financial services in the rural environment may use, jointly or separately from the Credit Union name, the expression Caja Rural.

The "Agricultural Credit Bank, S. a.", and the Rural Banks or any other Credit Unions belonging to the Associated Group Agricultural Credit Bank-Associated Rural Boxes may use, jointly or separately and while they are part of that Group, the expression Agricultural Credit.

4. No public register may register entities not subject to this Law, which intend to use any of the names provided for in this Article, or the acts in which such entities intervene. In the event of registration, the person concerned shall proceed, on its own initiative or at the request, to its immediate cancellation.

Article 4. Operations.

1. Credit Unions may perform all kinds of active, passive and service operations permitted to other credit institutions, with special attention to the financial needs of their partners.

2. In any case, the set of the active operations with third parties of a Credit Union cannot reach 50 per 100 of the total resources of the Entity.

The operations carried out by the Credit Unions with the partners of the associated Cooperatives, the placement of the excess cash on the interbank market and the the acquisition of securities and financial assets of fixed income that could be acquired for the coverage of the legal ratios or for the placement of cash overruns.

Article 5. Constitution.

1. The formation of a Credit Union shall require prior authorization from the Ministry of Economy and Finance. The application for a constitution shall be signed by a group of promoters, of which at least five persons shall be included legal entities that carry out their social object's activity in an uninterrupted manner from at least two years before the date of the constitution, or by one hundred and fifty natural persons.

In order to constitute a Credit Union with the name Caja Rural, the promoter group must include at least one Agrarian Cooperative or fifty partners natural persons holding agricultural holdings.

2. Granted the authorization, the Credit Union in formation must request its registration in the corresponding Register of the Bank of Spain, accompanying the copy effect of the public deed of constitution and the Statutes. registered in the Register of the Banco de España, must be registered in the Register of Companies and in the corresponding Register of Cooperatives, at which time they will acquire legal personality.

Article 6. Social capital.

1. The Government, after reporting by the Bank of Spain, shall establish the minimum amount of the capital of the Credit Union according to the number of inhabitants of the municipality where the entity's registered office is located.

It shall also determine the extent to which such capital is to be disbursed.

2. Credit Unions will not be able to operate in municipalities with a greater number of inhabitants than their registered office without expanding their social capital to adjust it properly.

Item seventh. Contributions from the partners.

1. All members of a Credit Union shall have at least one nomination for a contribution. the Statute shall determine the nominal value of those securities, which shall not be less than ten thousand pesetas, as well as the minimum number of securities to be held by the partners, in accordance with the legal nature and the undertaking of activity assumed by the partners, the limits set out in paragraph 3 of this Article. all titles shall have the same nominal value.

2. The status of a partner shall not be lost where, as a result of a consolidation plan approved by the Deposit Insurance Fund in Credit Union or by application of the provisions of the last paragraph of this Article, the nominal value of the contributions are cancelled or reduced below the statutory limit, as a general rule, without the partner returning the injured party.

3. The total amount of contributions from each partner shall not exceed 20 per 100 of the share capital in the case of a legal person and 2,5 per 100 in the case of a natural person.

In no case, legal persons who do not have the status of a Cooperative Society may hold more than 50 percent of the share capital.

4. the contributions shall be reimbursable to the partners, under the conditions set out in the relevant cooperative legislation, only where there is insufficient coverage of the share capital, reserves, of the own resources ratio; or any other that is applicable or is set in the future.

They may also be applied, if this is governed by the law, to the compensation of losses incurred in their operations. In any event, the reductions to be made shall be carried out in proportion to all contributions.

Article 8. Results of the financial year.

1. At the end of each financial year, the results shall be determined in accordance with the criteria and methods applicable by the remaining credit institutions, without prejudice to the provisions of the Law on the Tax Regime of Cooperatives.

2. The losses shall be covered by the cooperative's own resources and, if they are insufficient or the minimum social capital established, the cooperative must be dissolved unless the capital or resources are reintegrated. to the extent sufficient.

3. The profit of the financial year shall be used to cover losses of previous financial years, if any. of the remaining benefit shall be allocated:

(a) 50 per 100, at least, to the endowment of the Obligatory Reserve Fund. During the first three years of the existence of the Credit Union, formed from the entry into force of the Law, it will be allocated to the same end of 100 per 100 of the remaining benefit, time to be extended, if necessary, and on the terms that the competent authority may establish in each case, until the required reserve fund reaches at least the value of the contributions made to Capital.

b) 10 per 100, at least, to the endowment of the Education and Promotion Fund.

c) The remainder will be available to the General Assembly, which may distribute it as follows:

Sharing between partners.

Endowment to the Volunteer Reserve Fund.

The deliverable amount between the partners will be up to the amount that will result from applying to the paid-up share capital and the existing legally binding reserves, the legal interest of the money.

Article ninth. Organs of society.

1. The social bodies of the Credit Union are the General Assembly and the Governing Council.

2. In the General Assembly, each member shall have one vote. However, if the Statutes provide for this, the members ' vote may be proportional to their contributions in the social capital, to the activity carried out or to the number of members of the associated cooperatives; in this case the Statutes shall fix the criteria for the proportionality of the vote.

In any case, the voting limits per partner shall be those set out in Article 7.3.

3. Votes will be delegated to other partners, with the following limitations:

(a) The delegation shall be made in writing before the Assembly is held, and shall always be nominative.

(b) No partner may receive votes by delegation which, in addition to those corresponding to it, exceed the voting limits set out in this Law.

4. The Governing Council shall be responsible for the appointment, recruitment and removal of the Director-General.

5. The meeting of the Governing Council shall be convened by the President on his own initiative or at the request of at least two Directors or a Director-General.

6. Members of the Governing Council may be remunerated when the Statute so provides.

7. The Credit Union Directorate will be held by one or more Directors General.

8. They may not be members of the Governing Board or Directors-General:

(a) Those who are not rehabilitated or are not rehabilitated, those who are legally incapacitated, those who are sentenced to prison sentences who have been disqualified for the exercise of public office, those who have been convicted of serious non-compliance of the laws or social provisions, and especially for crimes against property, the disabled for the position of a counselor or director of a credit institution for disciplinary record.

(b) Advisers, or administrators, or senior managers of other credit institutions, other than those participating in the share capital.

(c) Those belonging to the board of directors of more than four credit institutions. For this purpose, the posts held in the boards of credit institutions in which the person concerned, his spouse, ascending or descending, together or separately, are the owners of a number of shares shall not be taken into account. less than the quotient of dividing the share capital by the number of members of the board of directors.

(d) Those who, by themselves or on behalf of other persons or entities, hold overdue and enforceable debts of any kind with the institution, or during the performance of their duties incur non-compliance with the obligations contracted with the Cooperative.

The Directors-General shall not be able to hold the same office or other equivalent in another credit, cooperative or commercial entity, nor the adviser, unless it is represented by the Credit Union.

9. The Banco de España will take the registration of high fees of the Credit Union in which you must register, before taking possession of your posts, the persons chosen or appointed to occupy in these entities posts of Counsellor or Director-General. the Banco de España shall refuse registration where, in accordance with applicable law, it is incompatible, in such a case that the corresponding choice or designation is void.

Article 10. Merger and division.

Require prior administrative authorization, mergers, divisions, or removals that affect a Credit Union.

In the event that the entity resulting from the merger, division or absorption is a Credit Union, the Credit Union must apply for registration in the corresponding Register of the Banco de España.

Item 11th. Accounting.

Credit Unions will keep accounting in accordance with the rules established for credit institutions. the balance sheets and annual results shall be audited by persons and with the requirements laid down in Law 19/1988 of 12 July of Audit of Accounts.

Article twelfth. Discipline and intervention.

It will be applicable to the Credit Unions Law 26/1988, of July 29, of Discipline and Intervention of the Credit Entities.

ADDITIONAL DISPOSITION

Agricultural Credit Bank Group-Associated Rural Boxes.

The Associated Group Agricultural Credit Bank-Rural Banks will be constituted by the Agricultural Credit Bank and the Rural Banks that will sign the agreement with it, having full capacity to work for the fulfillment of its the purpose of the Convention, and to govern its governing bodies and its activities in accordance with the provisions of the said Convention.

TRANSIENT PROVISIONS

First.

Credit Unions registered in the Special Register under the Banco de España's special register for the entry into force of this Law, must adapt their activity and Statutes to the provisions of this Law within two years.

In the case of Local Credit Cooperatives whose home address in municipalities of less than 100,000 inhabitants, the deadline for adapting their social capital will be four years.

Second.

Credit Union promoters who have pending resolution requests for the entry into force of this Law shall adapt their application to the provisions of this Law within one year.

FINAL PROVISIONS

First.

The Government may, in the field of its powers, dictate how many provisions are required for the implementation and development of this Law.

Second.

The precepts contained in this Law, with the exception of Article 9 (5), (6) and (7)

are declared basic under the provisions of Article 149.1.11 of the Constitution.

Nor shall the provisions of Article 5 (1) concerning the number of promoters and minimum time limits required to apply for the establishment of a cooperative be considered as basic rules. Credit, in Article 7 (1), in respect of the minimum nominal value of the securities and in Article 9 (3) (a) in relation to the manner in which the voting delegation is to be made.

REPEAL PROVISION

As from the entry into force of this Law, the provisions of the same or lower rank are repealed as far as they are concerned. In particular, the sixth transitional provision of the General Law of Cooperatives and Royal Decree 2860/1978 of 3 November, governing the Credit Unions, as well as the Royal Decrees and Ministerial Orders, are repealed. complement and develop such regulation:

Royal Decree 1549/1979, dated June 29.

Ministerial Order of 26 February 1979.

Ministerial Order of 30 June 1979.

Ministerial Order of 9 January 1980.

Ministerial Order of 12 May 1980.

Ministerial Order of 2 July 1980.

Ministerial Order of 31 July 1980.

Ministerial Order of 4 October 1980.

Ministerial Order of October 29, 1981.

Therefore,

I command all Spaniards, individuals and authorities, to keep and keep this Law.

Palacio de la Zarzuela, Madrid, to 26 May 1989.

JOHN CARLOS R.

The President of the Government,

FELIPE GONZÁLEZ MARQUEZ