By Donya Parrish, MCU VP- Risk Management
State chartered credit unions in Montana have new provisions to comply with as of July 1, 2019. HB 731 was passed during the recent legislative session to amend the Montana Credit Union Act at Title 32, chapter 3.
The details of HB 731 provide that the Division of Banking may impose fines not exceeding $50,000 on a director, executive officer, agent, or employee of a credit union who willfully and knowingly makes false statements or intentional deceiving entries in the books of the credit union. That might include actions such as publishing reports with material misstatements, taking illegal possession of credit union property, or refusal to allow the books to be inspected by the department.
It also includes possible imprisonment and fines for employees, directors, or officers for theft of funds and fraudulent practices and concealment of actions from directors of the credit union. Lastly, it codifies the ability for the removal of a director, officer, or employee through proper channels if they are found to be “negligent, dishonest, reckless, or incompetent” after investigation.
Yes, this all sounds scary, but the truth is, similar provisions already exist and apply to both your banking competitors, and federally chartered credit unions. Bad actors should not be allowed to continue representing your credit union, and no one will be fined or removed without going through the proper channels and process.
The Division of Banking did not initiate this bill, but is available to answer any questions your credit union board or supervisory committee may have about its application.