---
kind: "section"
citation: "12 U.S.C. § 1785"
title: "12"
title_heading: "Banks and Banking"
number: "1785"
heading: "Requirements governing insured credit unions"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/1785"
units:
  - "Chapter 14 — Federal Credit Unions"
  - "Subchapter II — Share Insurance"
---

# §1785. Requirements governing insured credit unions

- (a) **Insurance logo—**
  - (1) **Insured credit unions—**
    - (A) **In general—** Each [insured credit union](/usc/12/1752.md?p=7) shall display at each place of business maintained by that [credit](/usc/12/5481.md?p=7) union a sign or signs relating to the insurance of the share [accounts](/usc/12/1752.md?p=5) of the institution, in accordance with regulations to be prescribed by the [Board](/usc/12/1752.md?p=4).
    - (B) **Statement to be included—** Each sign required under [subparagraph (A)](#a-1-A) shall include a statement that insured share [accounts](/usc/12/1752.md?p=5) are backed by the full faith and [credit](/usc/12/5481.md?p=7) of the United States Government.
  - (2) **Regulations—** The [Board](/usc/12/1752.md?p=4) shall prescribe regulations to carry out this subsection, including regulations governing the substance of signs required by [paragraph (1)](#a-1) and the manner of display or use of such signs.
  - (3) **Penalties—** For each day that an [insured credit union](/usc/12/1752.md?p=7) continues to violate this subsection or any regulation issued under this subsection, it shall be subject to a penalty of not more than $100, which the [Board](/usc/12/1752.md?p=4) may recover for its use.
- (b) **Restrictions—**
  - (1) Except as provided in [paragraph (2)](#b-2), no [insured credit union](/usc/12/1752.md?p=7) shall, without the prior approval of the [Board](/usc/12/1752.md?p=4)—
    - (A) merge or consolidate with any [noninsured credit union](/usc/12/1752.md?p=7) or institution;
    - (B) assume liability to pay any [member accounts](/usc/12/1752.md?p=5) in, or similar liabilities of, any [noninsured credit union](/usc/12/1752.md?p=7) or institution;
    - (C) transfer assets to any [noninsured credit union](/usc/12/1752.md?p=7) or institution in consideration of the assumption of liabilities for any portion of the [member accounts](/usc/12/1752.md?p=5) in such [insured credit union](/usc/12/1752.md?p=7); or
    - (D) convert into a [noninsured credit union](/usc/12/1752.md?p=7) or institution.
  - (2) **Conversion of insured credit unions to mutual savings banks.—**
    - (A) **In general.—** Notwithstanding [paragraph (1)](#b-1), an [insured credit union](/usc/12/1752.md?p=7) may convert to a mutual savings bank or [savings association](/usc/12/1861.md?p=b-5) (if the [savings association](/usc/12/1861.md?p=b-5) is in mutual form), as those terms are defined in [section 1813 of this title](/usc/12/1813.md), without the prior approval of the [Board](/usc/12/1752.md?p=4), subject to the requirements and procedures set forth in the laws and regulations governing mutual savings banks and [savings associations](/usc/12/1861.md?p=b-5).
    - (B) **Conversion proposal.—** A proposal for a conversion described in [subparagraph (A)](#b-2-A) shall first be approved, and a date set for a vote thereon by the members (either at a meeting to be held on that date or by written ballot to be filed on or before that date), by a majority of the [directors](/usc/12/5481.md?p=10) of the [insured credit union](/usc/12/1752.md?p=7). Approval of the proposal for conversion shall be by the affirmative vote of a majority of the members of the [insured credit union](/usc/12/1752.md?p=7) who vote on the proposal.
    - (C) **Notice of proposal to members.—** An [insured credit union](/usc/12/1752.md?p=7) that proposes to convert to a mutual savings bank or [savings association](/usc/12/1861.md?p=b-5) under [subparagraph (A)](#b-2-A) shall submit notice to each of its members who is eligible to vote on the matter of its intent to convert—
      - (i) 90 days before the date of the member vote on the conversion;
      - (ii) 60 days before the date of the member vote on the conversion; and
      - (iii) 30 days before the date of the member vote on the conversion.
    - (D) **Notice of proposal to board.—** The [Board](/usc/12/1752.md?p=4) may require an [insured credit union](/usc/12/1752.md?p=7) that proposes to convert to a mutual savings bank or [savings association](/usc/12/1861.md?p=b-5) under [subparagraph (A)](#b-2-A) to submit a notice to the [Board](/usc/12/1752.md?p=4) of its intent to convert during the 90-day period preceding the date of the completion of the conversion.
    - (E) **Inapplicability of chapter upon conversion.—** Upon completion of a conversion described in [subparagraph (A)](#b-2-A), the [credit](/usc/12/5481.md?p=7) union shall no longer be subject to any of the provisions of this chapter.
    - (F) **Limit on compensation of officials.—**
      - (i) **In general.—** No [director](/usc/12/5481.md?p=10) or senior management official of an [insured credit union](/usc/12/1752.md?p=7) may receive any economic benefit in connection with a conversion of the [credit](/usc/12/5481.md?p=7) union as described in [subparagraph (A)](#b-2-A), other than—
        - (I) [director](/usc/12/5481.md?p=10) fees; and
        - (II) compensation and other benefits paid to [directors](/usc/12/5481.md?p=10) or senior management officials of the converted institution in the ordinary course of business.
      - (ii) **Senior management official.—** For purposes of this subparagraph, the term “senior management official” means a chief executive officer, an assistant chief executive officer, a chief financial officer, and any other senior executive officer (as defined by the [appropriate Federal banking agency](/usc/12/1861.md?p=b-1) pursuant to [section 1831i(f) of this title](/usc/12/1831i.md?p=f)).
    - (G) **Consistent rules.—**
      - (i) **In general.—** Not later than 6 months after August 7, 1998, the [Administration](/usc/12/1752.md?p=3) shall promulgate final rules applicable to charter conversions described in this paragraph that are consistent with rules promulgated by other financial regulators, including the Office of the Comptroller of the Currency. The rules required by this clause shall provide that charter conversion by an [insured credit union](/usc/12/1752.md?p=7) shall be subject to regulation that is no more or less restrictive than that applicable to charter conversions by other financial institutions.
      - (ii) **Oversight of member vote.—** The member vote concerning charter conversion under this paragraph shall be administered by the [Administration](/usc/12/1752.md?p=3), and shall be verified by the Federal or [State](/usc/12/1707.md?p=d) regulatory agency that would have jurisdiction over the institution after the conversion. If either the [Administration](/usc/12/1752.md?p=3) or that regulatory agency disapproves of the methods by which the member vote was taken or procedures applicable to the member vote, the member vote shall be taken again, as directed by the [Administration](/usc/12/1752.md?p=3) or the agency.
  - (3) Except with the prior written approval of the [Board](/usc/12/1752.md?p=4), no [insured credit union](/usc/12/1752.md?p=7) shall merge or consolidate with any other [insured credit union](/usc/12/1752.md?p=7) or, either directly or indirectly, acquire the assets of, or assume liability to pay any [member accounts](/usc/12/1752.md?p=5) in, any other [insured credit union](/usc/12/1752.md?p=7).
- (c) **Considerations for waiver or enforcement of restrictions—** In granting or withholding approval or consent under [subsection (b)](#b) of this section, the [Board](/usc/12/1752.md?p=4) shall consider—
  - (1) the history, financial condition, and management policies of the [credit](/usc/12/5481.md?p=7) union;
  - (2) the adequacy of the [credit](/usc/12/5481.md?p=7) union’s reserves;
  - (3) the economic advisability of the transaction;
  - (4) the general character and fitness of the [credit](/usc/12/5481.md?p=7) union’s management;
  - (5) the convenience and needs of the members to be served by the [credit](/usc/12/5481.md?p=7) union; and
  - (6) whether the [credit](/usc/12/5481.md?p=7) union is a cooperative association organized for the purpose of promoting thrift among its members and creating a source of [credit](/usc/12/5481.md?p=7) for provident or productive purposes.
- (d) **Prohibition—**
  - (1) **In general—** Except with prior written consent of the [Board](/usc/12/1752.md?p=4)—
    - (A) any [person](/usc/12/5481.md?p=19) who has been convicted of any criminal offense involving dishonesty or a breach of trust, or has agreed to enter into a pretrial diversion or similar program in connection with a prosecution for such offense, may not—
      - (i) become, or continue as, an institution-affiliated party with respect to any [insured credit union](/usc/12/1752.md?p=7); or
      - (ii) otherwise participate, directly or indirectly, in the conduct of the affairs of any [insured credit union](/usc/12/1752.md?p=7); and
    - (B) any [insured credit union](/usc/12/1752.md?p=7) may not permit any [person](/usc/12/5481.md?p=19) referred to in [subparagraph (A)](#d-1-A) to engage in any conduct or continue any relationship prohibited under such subparagraph.
  - (2) **Minimum 10-year prohibition period for certain offenses—**
    - (A) **In general—** If the offense referred to in [paragraph (1)(A)](#d-1-A) in connection with any [person](/usc/12/5481.md?p=19) referred to in such paragraph is—
      - (i) an offense under—
        - (I) section 215, 656, 657, 1005, 1006, 1007, 1008,[^1] 1014, 1032, 1344, 1517, 1956, or [1957](/usc/18/1957.md) of title 18; or
        - (II) section 1341 or 1343 of such title which affects any financial institution (as defined in section 20 of such title); or
      - (ii) the offense of conspiring to commit any such offense,

      the [Board](/usc/12/1752.md?p=4) may not consent to any exception to the application of [paragraph (1)](#d-1) to such [person](/usc/12/5481.md?p=19) during the 10-year period beginning on the date the conviction or the agreement of the [person](/usc/12/5481.md?p=19) becomes final.

    - (B) **Exception by order of sentencing court—**
      - (i) **In general—** On motion of the [Board](/usc/12/1752.md?p=4), the court in which the conviction or the agreement of a [person](/usc/12/5481.md?p=19) referred to in [subparagraph (A)](#d-2-A) has been entered may grant an exception to the application of [paragraph (1)](#d-1) to such [person](/usc/12/5481.md?p=19) if granting the exception is in the interest of justice.
      - (ii) **Period for filing—** A motion may be filed under [clause (i)](#d-2-B-i) at any time during the 10-year period described in [subparagraph (A)](#d-2-A) with regard to the [person](/usc/12/5481.md?p=19) on whose behalf such motion is made.
  - (3) **Penalty—** Whoever knowingly violates paragraph [(1)](#d-1) or [(2)](#d-2) shall be fined not more than $1,000,000 for each day such prohibition is violated or imprisoned for not more than 5 years, or both.
  - (4) **Exceptions—**
    - (A) **Certain older offenses—**
      - (i) **In general—** With respect to an individual, [paragraph (1)](#d-1) shall not apply to an offense if—
        - (I) it has been 7 years or more since the offense occurred; or
        - (II) the individual was incarcerated with respect to the offense and it has been 5 years or more since the individual was released from incarceration.
      - (ii) **Offenses committed by individuals 21 or younger—** For individuals who committed an offense when they were 21 years of age or younger, [paragraph (1)](#d-1) shall not apply to the offense if it has been more than 30 months since the sentencing occurred.
      - (iii) **Limitation—** This subparagraph shall not apply to an offense described under [paragraph (1)(B)](#d-1-B).[^1]
    - (B) **Expungement and sealing—** With respect to an individual, [paragraph (1)](#d-1) shall not apply to an offense if—
      - (i) there is an order of expungement, sealing, or dismissal that has been issued in regard to the conviction in connection with such offense; and
      - (ii) it is intended by the language in the order itself, or in the legislative provisions under which the order was issued, that the conviction shall be destroyed or sealed from the individual’s [State](/usc/12/1707.md?p=d), Tribal, or Federal record, even if exceptions allow the record to be considered for certain character and fitness evaluation purposes.
    - (C) **De minimis exemption—**
      - (i) **In general—** [Paragraph (1)](#d-1) shall not apply to such de minimis offenses as the [Board](/usc/12/1752.md?p=4) determines, by rule.
      - (ii) **Confinement criteria—** In issuing rules under [clause (i)](#d-4-C-i), the [Board](/usc/12/1752.md?p=4) shall include a requirement that the offense was punishable by a term of three years or less confined in a correctional facility, where such confinement—
        - (I) is calculated based on the time an individual spent incarcerated as a punishment or a sanction, not as pretrial detention; and
        - (II) does not include probation or parole where an individual was restricted to a particular jurisdiction or was required to report occasionally to an individual or a specific location.
      - (iii) **Bad check criteria—** In setting the criteria for de minimis offenses under [clause (i)](#d-4-C-i), if the [Board](/usc/12/1752.md?p=4) establishes criteria with respect to insufficient [funds](/usc/12/1752.md?p=8) checks, the [Board](/usc/12/1752.md?p=4) shall require that the aggregate total face value of all insufficient [funds](/usc/12/1752.md?p=8) checks across all convictions or program entries related to insufficient [funds](/usc/12/1752.md?p=8) checks is $2,000 or less.
      - (iv) **Designated lesser offenses—** [Paragraph (1)](#d-1) shall not apply to certain lesser offenses (including the use of a fake ID, shoplifting, trespass, fare evasion, driving with an expired license or tag, and such other low-risk offenses as the [Board](/usc/12/1752.md?p=4) may designate) if 1 year or more has passed since the applicable conviction or program entry.
  - (5) **Consent applications—**
    - (A) **In general—** The [Board](/usc/12/1752.md?p=4) shall accept consent applications from an individual and from an [insured credit union](/usc/12/1752.md?p=7) on behalf of an individual that are filed separately or contemporaneously with a regional office of the [Board](/usc/12/1752.md?p=4).
    - (B) **Sponsored applications filed with regional offices—** Consent applications filed at a regional office of the [Board](/usc/12/1752.md?p=4) by an [insured credit union](/usc/12/1752.md?p=7) on behalf of an individual—
      - (i) shall be reviewed by such office;
      - (ii) may be approved or denied by such office, if such authority has been delegated to such office by the [Board](/usc/12/1752.md?p=4); and
      - (iii) may only be denied by such office if the general counsel of the [Board](/usc/12/1752.md?p=4) (or a designee) certifies that the denial is consistent with this section.
    - (C) **Individual applications filed with regional offices—** Consent applications filed at a regional office by an individual—
      - (i) shall be reviewed by such office; and
      - (ii) may be approved or denied by such office, if such authority has been delegated to such office by the [Board](/usc/12/1752.md?p=4), except with respect to—
        - (I) cases involving an offense described under [paragraph (1)(B)](#d-1-B);[^1] and
        - (II) such other high-level security cases as may be designated by the [Board](/usc/12/1752.md?p=4).
    - (D) **National office review—** The national office of the [Board](/usc/12/1752.md?p=4) shall—
      - (i) review any consent application with respect to which a regional office is not authorized to approve or deny the application; and
      - (ii) review any consent application that is denied by a regional office, if the individual requests a review by the national office.
    - (E) **Forms and instructions—**
      - (i) **Availability—** The [Board](/usc/12/1752.md?p=4) shall make all forms and instructions related to consent applications available to the public, including on the website of the [Board](/usc/12/1752.md?p=4).
      - (ii) **Contents—** The forms and instructions described under [clause (i)](#d-5-E-i) shall provide a sample cover letter and a comprehensive list of items that may accompany the application, including clear guidance on evidence that may support a finding of rehabilitation.
    - (F) **Consideration of criminal history—**
      - (i) **Regional office consideration—** In reviewing a consent application, a regional office shall—
        - (I) primarily rely on the criminal history record of the Federal [Bureau](/usc/12/5481.md?p=2) of Investigation; and
        - (II) provide such record to the applicant to review for accuracy.
      - (ii) **Certified copies—** The [Board](/usc/12/1752.md?p=4) may not require an applicant to provide certified copies of criminal history records unless the [Board](/usc/12/1752.md?p=4) determines that there is a clear and compelling justification to require additional information to verify the accuracy of the criminal history record of the Federal [Bureau](/usc/12/5481.md?p=2) of Investigation.
    - (G) **Consideration of rehabilitation—** Consistent with title VII of the Civil Rights Act of 1964 ([42 U.S.C. 2000e](/usc/42/2000e.md) et seq.), the [Board](/usc/12/1752.md?p=4) shall—
      - (i) conduct an individualized assessment when evaluating consent applications that takes into [account](/usc/12/1752.md?p=5) evidence of rehabilitation, the applicant’s age at the time of the conviction or program entry, the time that has elapsed since conviction or program entry, and the relationship of individual’s[^2] offense to the responsibilities of the applicable position;
      - (ii) consider the individual’s employment history, letters of recommendation, certificates documenting participation in substance abuse programs, successful participating in job preparation and educational programs, and other relevant mitigating evidence; and
      - (iii) consider any additional information the [Board](/usc/12/1752.md?p=4) determines necessary for safety and soundness.
    - (H) **Scope of employment—** With respect to an approved consent application filed by an [insured credit union](/usc/12/1752.md?p=7) on behalf of an individual, if the [Board](/usc/12/1752.md?p=4) determines it appropriate, such approved consent application shall allow the individual to work for the same employer (without restrictions on the location) and across positions, except that the prior consent of the [Board](/usc/12/1752.md?p=4) (which may require a new application) shall be required for any proposed significant changes in the individual’s security-related duties or responsibilities, such as promotion to an officer or other positions that the employer determines will require higher security screening credentials.
    - (I) **Coordination with FDIC—** In carrying out this subsection, the [Board](/usc/12/1752.md?p=4) shall consult and coordinate with the Federal Deposit Insurance Corporation as needed to promote consistent implementation where appropriate.
  - (6) **Definitions—** In this subsection:
    - (A) **Consent application—** The term “consent application” means an application filed with [Board](/usc/12/1752.md?p=4)[^2] by an individual (or by an [insured credit union](/usc/12/1752.md?p=7) on behalf of an individual) seeking the written consent of the [Board](/usc/12/1752.md?p=4) under [paragraph (1)(A)](#d-1-A).
    - (B) **Criminal offense involving dishonesty—** The term “criminal offense involving dishonesty”—
      - (i) means an offense under which an individual, directly or indirectly—
        - (I) cheats or defrauds; or
        - (II) wrongfully takes property belonging to another in violation of a criminal statute;
      - (ii) includes an offense that Federal, [State](/usc/12/1707.md?p=d), or local law defines as dishonest, or for which dishonesty is an element of the offense; and
      - (iii) does not include—
        - (I) a misdemeanor criminal offense committed more than one year before the date on which an individual files a consent application, excluding any period of incarceration; or
        - (II) an offense involving the possession of controlled substances.
    - (C) **Pretrial diversion or similar program—** The term “pretrial diversion or similar program” means a program characterized by a suspension or eventual dismissal or reversal of charges or criminal prosecution upon agreement by the accused to restitution, drug or alcohol rehabilitation, anger management, or community service.
- (e) **Security standards; reports; penalty—**
  - (1) The [Board](/usc/12/1752.md?p=4) shall promulgate rules establishing minimum standards with which each [insured credit union](/usc/12/1752.md?p=7) must comply with respect to the installation, maintenance, and operation of security devices and procedures, reasonable in cost, to discourage robberies, burglaries, and larcenies and to assist in the identification and apprehension of [persons](/usc/12/5481.md?p=19) who commit such acts.
  - (2) The rules shall establish the time limits within which [insured credit unions](/usc/12/1752.md?p=7) shall comply with the standards and shall require the submission of periodic reports with respect to the installation, maintenance, and operation of security devices and procedures.
  - (3) An [insured credit union](/usc/12/1752.md?p=7) which violates a rule promulgated pursuant to this subsection shall be subject to a civil penalty which shall not exceed $100 for each day of the violation.
- (f) **Share draft accounts; maintenance, loans, etc.**
  - (1) Every [insured credit union](/usc/12/1752.md?p=7) is authorized to maintain, and make loans with respect to, [share draft](/usc/12/1752.md?p=5) [accounts](/usc/12/1752.md?p=5) in accordance with rules and regulations prescribed by the [Board](/usc/12/1752.md?p=4). Except as provided in [paragraph (2)](#f-2), an [insured credit union](/usc/12/1752.md?p=7) may pay dividends on [share draft](/usc/12/1752.md?p=5) [accounts](/usc/12/1752.md?p=5) and may permit the owners of such [share draft](/usc/12/1752.md?p=5) [accounts](/usc/12/1752.md?p=5) to make withdrawals by negotiable or transferable instruments or other orders for the purpose of making transfers to third parties.
  - (2) [Paragraph (1)](#f-1) shall apply only with respect to [share draft](/usc/12/1752.md?p=5) [accounts](/usc/12/1752.md?p=5) in which the entire beneficial interest is held by one or more individuals or members or by an organization which is operated primarily for religious, philanthropic, charitable, educational, or other similar purposes and which is not operated for profit, and with respect to deposits of public [funds](/usc/12/1752.md?p=8) by an officer, employee, or agent of the United States, any [State](/usc/12/1707.md?p=d), county, municipality, or political subdivision thereof, the District of Columbia, the Commonwealth of Puerto Rico, American Samoa, Guam, any territory or possession of the United States, or any political subdivision thereof.
- (g) **Interest rates—**
  - (1) If the applicable rate prescribed in this subsection exceeds the rate an [insured credit union](/usc/12/1752.md?p=7) would be permitted to charge in the absence of this subsection, such [credit](/usc/12/5481.md?p=7) union may, notwithstanding any [State](/usc/12/1707.md?p=d) constitution or statute which is hereby preempted for the purposes of this subsection, take, receive, reserve, and charge on any loan, interest at a rate of not more than 1 per centum in excess of the discount rate on ninety-day commercial paper in effect at the Federal Reserve bank in the Federal Reserve district where such [insured credit union](/usc/12/1752.md?p=7) is located or at the rate allowed by the laws of the [State](/usc/12/1707.md?p=d), territory, or district where such [credit](/usc/12/5481.md?p=7) union is located, whichever may be greater.
  - (2) If the rate prescribed in [paragraph (1)](#g-1) exceeds the rate such [credit](/usc/12/5481.md?p=7) union would be permitted to charge in the absence of this subsection, and such [State](/usc/12/1707.md?p=d) fixed rate is thereby preempted by the rate described in [paragraph (1)](#g-1), the taking, receiving, reserving, or charging a greater rate than is allowed by [paragraph (1)](#g-1), when knowingly done, shall be deemed a forfeiture of the entire interest which the loan carries with it, or which has been agreed to be paid thereon. If such greater rate of interest has been paid, the [person](/usc/12/5481.md?p=19) who paid it may recover, in a civil action commenced in a court of appropriate jurisdiction not later than two years after the date of such payment, an amount equal to twice the amount of interest paid from the [credit](/usc/12/5481.md?p=7) union taking or receiving such interest.
- (h) **Emergency merger—** Notwithstanding any other provision of law, the [Board](/usc/12/1752.md?p=4) may authorize a merger or consolidation of an [insured credit union](/usc/12/1752.md?p=7) which is insolvent or is in danger of insolvency with any other [insured credit union](/usc/12/1752.md?p=7) or may authorize an [insured credit union](/usc/12/1752.md?p=7) to purchase any of the assets of, or assume any of the liabilities of, any other [insured credit union](/usc/12/1752.md?p=7) which is insolvent or in danger of insolvency if the [Board](/usc/12/1752.md?p=4) is satisfied that—
  - (1) an emergency requiring expeditious action exists with respect to such other [insured credit union](/usc/12/1752.md?p=7);
  - (2) other alternatives are not reasonably available; and
  - (3) the public interest would best be served by approval of such merger, consolidation, purchase, or assumption.
- (i) **Emergency purchase of assets; conversion to insured deposits—**
  - (1) Notwithstanding any other provision of this chapter or of [State](/usc/12/1707.md?p=d) law, the [Board](/usc/12/1752.md?p=4) may authorize an institution whose deposits or [accounts](/usc/12/1752.md?p=5) are insured by the Federal Deposit Insurance Corporation to purchase any of the assets of or assume any of the liabilities of an [insured credit union](/usc/12/1752.md?p=7) which is insolvent or in danger of insolvency, except that prior to exercising this authority the [Board](/usc/12/1752.md?p=4) must attempt to effect the merger or consolidation of an [insured credit union](/usc/12/1752.md?p=7) which is insolvent or in danger of insolvency with another [insured credit union](/usc/12/1752.md?p=7), as provided in [subsection (h)](#h).
  - (2) For purposes of the authority contained in [paragraph (1)](#i-1), insured [accounts](/usc/12/1752.md?p=5) of the [credit](/usc/12/5481.md?p=7) union may upon consummation of the purchase and assumption be converted to insured deposits or other comparable [accounts](/usc/12/1752.md?p=5) in the acquiring institution, and the [Board](/usc/12/1752.md?p=4) and the National [Credit](/usc/12/5481.md?p=7) Union Share Insurance [Fund](/usc/12/1752.md?p=8) shall be absolved of any liability to the [credit](/usc/12/5481.md?p=7) union’s members with respect to those [accounts](/usc/12/1752.md?p=5).
- (j) **Privileges not affected by disclosure to banking agency or supervisor—**
  - (1) **In general—** The submission by any [person](/usc/12/5481.md?p=19) of any information to the [Administration](/usc/12/1752.md?p=3), any [State credit union](/usc/12/1752.md?p=6) supervisor, or foreign banking authority for any purpose in the course of any supervisory or regulatory process of such [Board](/usc/12/1752.md?p=4), supervisor, or authority shall not be construed as waiving, destroying, or otherwise affecting any privilege such [person](/usc/12/5481.md?p=19) may claim with respect to such information under Federal or [State](/usc/12/1707.md?p=d) law as to any [person](/usc/12/5481.md?p=19) or entity other than such [Board](/usc/12/1752.md?p=4), supervisor, or authority.
  - (2) **Rule of construction—** No provision of [paragraph (1)](#j-1) may be construed as implying or establishing that—
    - (A) any [person](/usc/12/5481.md?p=19) waives any privilege applicable to information that is submitted or transferred under any circumstance to which [paragraph (1)](#j-1) does not apply; or
    - (B) any [person](/usc/12/5481.md?p=19) would waive any privilege applicable to any information by submitting the information to the [Administration](/usc/12/1752.md?p=3), any [State credit union](/usc/12/1752.md?p=6) supervisor, or foreign banking authority, but for this subsection.

## Footnotes

[^1]: See References in Text note below.
[^2]: So in original. Probably should be preceded by “the”.

## Source credit

(June 26, 1934, ch. 750, title II, § 205, as added Pub. L. 91–468, § 1(3), Oct. 19, 1970, 84 Stat. 1002; amended Pub. L. 95–630, title V, § 502(b), Nov. 10, 1978, 92 Stat. 3681; Pub. L. 96–221, title III, § 305(d), title V, § 523, Mar. 31, 1980, 94 Stat. 147, 166; Pub. L. 97–320, title I, § 131, 141(a)(8), title VII, § 706(b), Oct. 15, 1982, 96 Stat. 1486, 1489, 1540; Pub. L. 100–86, title V, § 509(a), Aug. 10, 1987, 101 Stat. 635; Pub. L. 101–73, title IX, § 910(b), Aug. 9, 1989, 103 Stat. 478; Pub. L. 103–322, title XXXII, § 320606, Sept. 13, 1994, 108 Stat. 2119; Pub. L. 105–219, title II, § 202, Aug. 7, 1998, 112 Stat. 919; Pub. L. 109–173, § 2(d)(3), Feb. 15, 2006, 119 Stat. 3604; Pub. L. 109–351, title VI, § 607(b), Oct. 13, 2006, 120 Stat. 1982; Pub. L. 111–203, title III, § 362(2), July 21, 2010, 124 Stat. 1549; Pub. L. 117–263, div. E, title LVII, § 5705(b), Dec. 23, 2022, 136 Stat. 3414.)

## Notes

### Editorial Notes

### References in Text

Section 1008 of title 18, referred to in subsec. (d)(2)(A)(i)(I), was repealed by Pub. L. 101–73, title IX, § 961(g)(1), Aug. 9, 1989, 103 Stat. 500.

Paragraph (1)(B), referred to in subsec. (d)(4)(A)(iii), (5)(C)(ii)(I), probably should be a reference to “paragraph (2)”, meaning par. (2) of subsec. (d). See similar provisions in section 1829(c)(1)(C) and (f)(3)(B)(i) of this title, which refer to offenses described in subsec. (a)(2) of that section, which correspond to those listed in subsec. (d)(2) of this section.

The Civil Rights Act of 1964, referred to in subsec. (d)(5)(G), is Pub. L. 88–352, July 2, 1964, 78 Stat. 241. Title VII of the Act is classified generally to subchapter VI (§ 2000e et seq.) of chapter 21 of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under section 2000a of Title 42 and Tables.

### Amendments

2022—Subsec. (d)(4) to (6). Pub. L. 117–263 added pars. (4) to (6).

2010—Subsec. (b)(2)(G)(i). Pub. L. 111–203, § 362(2)(A), struck out “the Office of Thrift Supervision and” before “the Office of the Comptroller”.

Subsec. (i)(1). Pub. L. 111–203, § 362(2)(B), struck out “or the Federal Savings and Loan Insurance Corporation” before “to purchase”.

2006—Subsec. (a). Pub. L. 109–173 amended heading and text of subsec. (a) generally. Prior to amendment, text read as follows: “Every insured credit union shall display at each place of business maintained by it a sign or signs indicating that its member accounts are insured by the Board and shall include in all of its advertisements a statement to the effect that its member accounts are insured by the Board. The Board may exempt from this requirement advertisements which do not relate to member accounts or advertisements in which it is impractical to include such a statement. The Board shall prescribe by regulation the forms of such signs, the manner of display, the substance of any such statement, and the manner of use.”

Subsec. (j). Pub. L. 109–351 added subsec. (j).

1998—Subsec. (b)(1). Pub. L. 105–219, § 202(1), substituted “Except as provided in paragraph (2), no insured credit union shall, without the prior approval of the Board” for “Except with the prior written approval of the Board, no insured credit union shall”.

Subsec. (b)(2), (3). Pub. L. 105–219, § 202(2), (3), added par. (2) and redesignated former par. (2) as (3).

1994—Subsec. (d). Pub. L. 103–322 amended heading and text of subsec. (d) generally. Prior to amendment, text read as follows:

“(1) Prohibition.—Except with the prior written consent of the Board—

“(A) any person who has been convicted of any criminal offense involving dishonesty or a breach of trust may not participate, directly or indirectly, in any manner in the conduct of the affairs of an insured credit union; and

“(B) an insured credit union may not permit such participation.

“(2) Penalty.—Whoever knowingly violates paragraph (1) shall be fined not more than $1,000,000 for each day such prohibition is violated or imprisoned for not more than 5 years, or both.”

1989—Subsec. (d). Pub. L. 101–73 amended subsec. (d) generally. Prior to amendment, subsec. (d) read as follows: “Except with the written consent of the Board, no person shall serve as a director, officer, committee member, or employee of an insured credit union who has been convicted, or who is hereafter convicted, of any criminal offense involving dishonesty or a breach of trust. For each willful violation of this prohibition, the credit union involved shall be subject to a penalty of not more than $100 for each day this prohibition is violated, which the Board may recover for its use.”

1987—Pub. L. 100–86 repealed Pub. L. 97–320, § 141. See 1982 Amendment note below.

1982—Subsec. (f)(2). Pub. L. 97–320, § 706(b), inserted provisions relating to deposits of public funds.

Subsecs. (h), (i). Pub. L. 97–320, § 131, added subsecs. (h) and (i).

Pub. L. 97–320, § 141(a)(8), which directed that, effective Oct. 13, 1986, the provisions of law amended by section 131 of Pub. L. 97–320 shall be amended to read as they would without such amendment, was repealed by Pub. L. 100–86, § 509(a). See Effective and Termination Dates of 1982 Amendment note and Extension of Emergency Acquisition and Net Worth Guarantee Provisions of Pub. L. 97–320 note set out under section 1464 of this title.

1980—Subsec. (f). Pub. L. 96–221, § 305(d), added subsec. (f).

Subsec. (g). Pub. L. 96–221, § 523, added subsec. (g).

1978—Pub. L. 95–630 substituted “Board” for “Administrator” wherever appearing, and “its” for “his” where appropriate.

### Statutory Notes and Related Subsidiaries

### Effective Date of 2010 Amendment

Amendment by Pub. L. 111–203 effective on the transfer date, see section 351 of Pub. L. 111–203, set out as a note under section 906 of Title 2, The Congress.

### Effective Date of 2006 Amendment

Pub. L. 109–173, § 2(e), Feb. 15, 2006, 119 Stat. 3605, provided that: “This section [amending this section and sections 1787, 1817, 1821, 1828, 1831t, and 3104 of this title] and the amendments made by this section shall take effect on the date on which the final regulations required under section 2109(a)(2) of the Federal Deposit Insurance Reform Act of 2005 [Pub. L. 109–171, set out as a Regulations note under section 1817 of this title] take effect [Apr. 1, 2006, see 71 F.R. 14629].”

### Effective Date of 1980 Amendment

Enactment of subsec. (f) by Pub. L. 96–221 effective at the close of Mar. 31, 1980, see section 306 of Pub. L. 96–221, set out as a note under section 1464 of this title.

Pub. L. 96–221, title V, § 525, Mar. 31, 1980, 94 Stat. 167, provided that: “The amendments made by sections 521 through 523 of this title [amending this section and enacting sections 1730g and 1831d of this title] shall apply only with respect to loans made in any State during the period beginning on April 1, 1980, and ending on the date, on or after April 1, 1980, on which such State adopts a law or certifies that the voters of such State have voted in favor of any provision, constitutional or otherwise, which states explicitly and by its terms that such State does not want the amendments made by such sections to apply with respect to loans made in such State, except that such amendments shall apply to a loan made on or after the date such law is adopted or such certification is made if such loan is made pursuant to a commitment to make such loan which was entered into on or after April 1, 1980, and prior to the date on which such law is adopted or such certification is made.”

### Effective Date of 1978 Amendment

Amendment by Pub. L. 95–630 effective on expiration of 120 days after Nov. 10, 1978, and transitional provisions, see section 509 of Pub. L. 95–630, set out as a note under section 1752 of this title.

### Extension of Emergency Acquisition and Net Worth Guarantee Provisions of Pub. L. 97–320

No amendment made by section 141(a) of Pub. L. 97–320, set out as a note under section 1464 of this title, as in effect before Aug. 10, 1987, to any other provision of law to be deemed to have taken effect before such date and any such provision of law to be in effect as if no such amendment had been made before such date, see section 509(c) of Pub. L. 100–86, set out as a note under section 1464 of this title.

No amendment made by section 141(a) of Pub. L. 97–320, set out as a note under section 1464 of this title, as in effect on the day before Oct. 8, 1986, to any other provision of law to be deemed to have taken effect before such date and any such provision of law to be in effect as if no such amendment had taken effect before such date, see section 1(c) of Pub. L. 99–452, set out as a note under section 1464 of this title.

Section 141(a) of Pub. L. 97–320, set out as a note under section 1464 of this title, as in effect on the day after Aug. 27, 1986, applicable as if included in Pub. L. 97–320 on Oct. 15, 1982, with no amendment made by such section to any other provision of law to be deemed to have taken effect before Aug. 27, 1986, and any such provision of law to be in effect as if no such amendment had taken effect before Aug. 27, 1986, see section 1(c) of Pub. L. 99–400, set out as a note under section 1464 of this title.

### Definition of “State”

For purposes of subsec. (g) of this section, the term “State” to include the several States, the Commonwealth of Puerto Rico, the District of Columbia, Guam, the Trust Territories of the Pacific Islands, the Northern Mariana Islands, and the Virgin Islands, see section 527 of Pub. L. 96–221, set out as a note under section 1735f–7a of this title.

### Choice of Highest Applicable Interest Rate

In any case in which one or more provisions of, or amendments made by, title V of Pub. L. 96–221, section 1735f–7 of this title, or any other provisions of law, including section 85 of this title, apply with respect to the same loan, mortgage, credit sale, or advance, such loan, mortgage, credit sale, or advance may be made at the highest applicable rate, see section 528 of Pub. L. 96–221, set out as a note under section 1735f–7a of this title.