Article 2. Examinations And Reports of California Financial Code >> Division 5. >> Chapter 3. >> Article 2.
(a) (1) The commissioner may at any time investigate into
the affairs and examine the books, accounts, records, files, and any
office within or outside of this state used in the business of every
credit union, whether it acts or claims to act under or without
authority of this division.
(2) The commissioner and the commissioner's duly designated
representatives shall have free access to the offices and places of
business, books, accounts, papers, records, files, safes, and vaults
of every credit union referred to in paragraph (1).
(3) The officers and employees of every credit union being
examined shall exhibit to the examiners, on request, any or all of
its securities, books, records, and accounts and shall otherwise
cooperate with the examination so far as it may be in their power.
(b) (1) The commissioner shall examine every credit union
organized under the laws of this state to the extent and whenever and
as often as the commissioner shall deem it advisable, but in no case
less than once every two years.
(2) For purposes of this subdivision, an examination made by the
commissioner in conjunction with or with assistance from the National
Credit Union Administration or a credit union regulatory agency of
another state of the United States is deemed to be an examination
made by the commissioner.
(3) No provision of this subdivision shall be deemed to require
that the commissioner make an examination onsite at the offices of a
The commissioner upon the written consent of any credit
union officer or director may make any examination of the credit
union in any regularly established office of the commissioner.
(a) A credit union with total assets equal to or greater
than ten million dollars ($10,000,000) shall, within 105 days after
the end of each fiscal year or within any extended time that the
commissioner may specify, file with the commissioner an audit report
for the fiscal year.
(b) The audit report called for in subdivision (a) shall comply
with all of the following provisions:
(1) The audit report shall contain the audited financial
statements of the credit union for, or as of the end of, the fiscal
year, prepared in accordance with generally accepted accounting
principles that the commissioner may specify, and any other
information that the commissioner may specify.
(2) The audit report shall be based upon an audit of the credit
union, conducted in accordance with generally accepted auditing
standards, and any other requirements that the commissioner may
(3) The audit report shall be prepared by an independent certified
public accountant or independent public accountant who is acceptable
to the commissioner.
(4) The audit report shall include, or be accompanied by, a
certificate or opinion of the independent certified public accountant
or independent public accountant that is satisfactory in form and
content to the commissioner. If the certificate or opinion is
qualified, the commissioner may order the credit union to take any
action that the commissioner may find necessary or advisable to
enable the independent certified public accountant or independent
public accountant to remove the qualification.
(c) A credit union with total assets of less than ten million
dollars ($10,000,000) shall, within 105 days after the end of each
fiscal year or within any extended time that the commissioner may
specify, file with the commissioner an audit report for the fiscal
(d) The audit report called for in subdivision (c) may comply with
all the provisions of subdivision (b), or may consist of alternative
procedures acceptable to the commissioner. An alternative procedures
audit may be performed by any of the following:
(1) An independent certified public accountant.
(2) An independent public accountant.
(3) The credit union's supervisory committee, provided that the
audit complies with the requirements of Section 14253.
(e) Notwithstanding subdivision (d), the commissioner may reject
an alternative procedures audit that he or she determines is not
satisfactory. If the commissioner rejects an alternative procedures
audit for any reason, he or she may order a credit union to obtain an
audit that is satisfactory to the commissioner.
(f) The commissioner may, by order or regulation, either
unconditionally or upon specified terms and conditions, grant an
exemption from this section in any case where the commissioner finds
that the requirements of this section are not necessary or advisable.
A credit union shall, when requested by the commissioner,
submit its unaudited financial statements, prepared in accordance
with generally accepted accounting principles and consisting of at
least a balance sheet and statement of income as of the date and for
the period specified by the commissioner. The commissioner may
require the submission of such reports on a monthly or other periodic
(a) Except as provided in subdivisions (b) and (c), within
10 business days of opening, closing, or relocating a branch office,
a credit union shall notify the commissioner in writing of the
action, including the street and mailing addresses of the branch
(b) A credit union shall not establish a branch office in another
state of the United States without the approval of the governmental
authority with jurisdiction to license or charter credit unions in
that state. "State" has the meaning set forth in Section 207.
(c) A credit union shall not establish a branch office in a
foreign nation without the prior written approval of the
commissioner. "Foreign nation" has the meaning set forth in Section
Every credit union shall make other special reports to the
commissioner as the commissioner may from time to time require. Such
reports shall be in the form and filed at such date as prescribed by
the commissioner, and shall if required by him, be verified in such
manner as he prescribes.
(a) If any credit union fails to file with the commissioner
any report required by this division on or before the day designated
for the filing of the report or, if the time for filing the report is
extended by the commissioner, within the extended time, or fails to
include in the report any matter required by the commissioner, the
failure is grounds for the suspension or revocation of the
certificate authorizing the credit union to act as a credit union.
(b) If any credit union fails to file with the commissioner any
report required by this division or by any order or regulation of the
commissioner, on or before the day designated for the filing of the
report or, if the time for filing the report is extended by the
commissioner, within the extended time, or fails to include in the
report any matter required by the commissioner, the commissioner may
order the credit union to pay to the commissioner a civil penalty
imposed pursuant to Section 329.
Investigation and examination reports prepared by the
commissioner's duly designated representatives shall not be public
records. The reports may be disclosed to the officers, directors,
members of the supervisory committee, members of the credit
committee, and key management personnel of the credit union that is
the subject of a report for the purpose of corrective action by those
persons. The examination report may also be disclosed to internal
and external auditors and attorneys that are retained by the subject
credit union, but only to the extent necessary for the auditors and
attorneys to perform work related to issues addressed in the
examination report. The disclosure shall not operate as a waiver of
the exemption specified in subdivision (d) of Section 6254 of the