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79 California Attorney General Reports and Opinions 1 (1996)

handle is hein.sag/sagca0079 and id is 1 raw text is: ATTORNEY GENERAL'S OPINIONS Opinion No. 95-409-January 10, 1996 Requested by: MEMBER OF THE STATE ASSEMBLY Opinion by: DANIEL E. LUNGREN, Attorney General Maxine P. Cutler, Deputy THE HONORABLE ROSS JOHNSON, MEMBER OF THE CALIFOR- NIA STATE ASSEMBLY, has requested an opinion on the following question: May a local public agency invest its deferred compensation plan funds in a credit union that has on its board of directors a member of the legislative body of the agency? CONCLUSION A local public agency may not invest its deferred compensation plan funds in a credit union that has on its board of directors a member of the legislative body of the agency. ANALYSIS State credit unions are regulated under the California Credit Union Law (Fin. Code, §§ 14000-15102) by the Commissioner of Corporations. (Fin. Code, §§ 14003, 14200.) They are generally managed by a board of directors (Fin. Code, § 14450) and various committees (Fin. Code, §§ 14550, 14453, 14456, 14600). A state credit union is a cooperative, conducting business for the mutual benefit and general welfare of its members with the earnings, savings, benefits, or services of the credit union, being distributed to its members as patrons. (Fin. Code, § 14002.) Every state credit union may accept deposits from local governments and political subdivisions thereof. (Fin. Code, § 14851.) Federal credit unions are regulated under the Federal Credit Union Act (12 U.S.C. §§ 1751-1795k) by the National Credit Union Administration Board. (12 U.S.C. §§ 1753, 1754.) They are managed by a board of directors, a supervisory committee and, if permitted by their bylaws, a credit committee. (12 U.S.C. § 1761.) A federal credit union is a cooperative association organized . . . for the purpose of promoting thrift among its members and creating a source of credit for provident or productive purposes (12 U.S.C. § 1752) and may receive deposits from, among others, local governments and political subdivisions thereof (12 U.S.C. § 1757). The question presented for resolution is whether a local public agency may invest its deferred compensation plan funds in a credit union that has (Matthew Bender & Co., Inc.) January 1996

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