Article 8. Penalties of California Financial Code >> Division 5. >> Chapter 4. >> Article 8.

Except as provided in Section 14950, any officer, director, member of a committee of a credit union, loan officer appointed pursuant to Section 14602, or employee who knowingly permits the creation of an obligation with, or participates in the creation of an obligation with, a nonmember of the credit union, or knowingly permits the creation of an obligation or participates in the creation of an obligation which is not made in conformity with the requirements of this division, is guilty of a misdemeanor.

Any officer, director, member of a committee, credit manager, or loan officer appointed pursuant to Section 14602 who violates Section 14750 is primarily liable to the credit union for the amount of any obligation that was created in violation of Section 14750. The illegality of the creation of the obligation is no defense in an action by the credit union to recover any amounts owing as a result of any obligation created in violation of Section 14750.

Except as provided for in Section 14051 and this article, any person who willfully violates any provision of this division, or who willfully violates any rule or order issued pursuant to this division, shall upon conviction be fined not more than ten thousand dollars ($10,000) or imprisoned pursuant to subdivision (h) of Section 1170 of the Penal Code, or in a county jail for not more than one year, or be punished by both that fine and imprisonment, but no person may be imprisoned for the violation of any rule or order unless he or she had knowledge of the rule or order. Conviction under this section shall not bar the exercise of the administrative authority of the commissioner provided in Section 14208.

Any director, officer, or employee of a credit union who asks for, receives, or agrees to receive any money, property, or thing of value for his personal benefit or advantage for (a) procuring or attempting to procure for any person any loan from that credit union, (b) for the purchase or discount of any note, draft, check, bill of exchange, or other obligation by that credit union, or (c) for permitting any person to overdraw any account with that credit union, is guilty of a felony.

Any director, officer, or employee of a credit union who knowingly overdraws his or her account with that credit union, except for any overdraft pursuant to an agreement which is approved in advance as provided in Section 14603 and which is in conformity with Section 15050, is guilty of a felony.

Any director, officer, agent, or employee of any credit union who knowingly receives or possesses the credit union's property otherwise than in payment of a just demand with intent to defraud, omits to make or omits to cause to be made a full and true entry thereof in the credit union's books and accounts, or concurs in omitting to make any material entry thereof, is guilty of a felony.

Any director, officer, agent, or employee of a credit union who (1) knowingly concurs in making or publishing any written report, exhibit, or statement of the credit union's affairs or financial condition containing any material statement which is false, or (2) having the custody of the credit union's books, willfully refuses or neglects to make any proper entry in those books as required by law, or (3) refuses to allow the books to be inspected or extracts to be taken therefrom by the commissioner or the commissioner's deputies or examiners, is guilty of a felony.

Any director, officer, or employee of a credit union who makes or maintains, or attempts to make or maintain, a deposit of the credit union's funds with any other person on the condition or with the understanding, whether express or implied, that the person receiving that deposit will make a loan or advance, directly or indirectly, to any director, officer, or employee of the credit union is guilty of a felony.

Any officer, director, employee, or agent of any credit union who willfully makes a false or untrue entry in any book, record, report, statement concerning the business or affairs of the credit union, or statement of condition or in connection with any transaction of the credit union with intent to deceive any officer or director thereof, or with intent to deceive any agent or examiner, whether private or public, employed or lawfully appointed to examine into the credit union's condition or to examine into any of the credit union's affairs or transactions, or with intent to deceive any public officer, office, or board to which the credit union is required by law to report or which has authority by law to examine into the credit union's affairs or transactions or to examine into any of the credit union's affairs or transactions or who, with like intent, willfully omits to make a new entry of any matter particularly pertaining to the business, property, condition, affairs, transactions, assets, or accounts of the credit union in any book, record, report, or statement of the credit union, or who with like intent alters, abstracts, conceals, or destroys any book, record, report, or statement of the credit union made, written, or kept, or required to be made, written, or kept by him or her or under his or her direction, is guilty of a felony.

(a) Every director of a credit union is guilty of a misdemeanor who:
  (1) In case of the fraudulent insolvency of that credit union, has participated in the fraud; or
  (2) Willfully does any act in his or her capacity as director which is expressly forbidden by law or willfully omits to perform any duty imposed upon him or her as such a director by law.
  (b) The insolvency of a credit union is deemed fraudulent for the purposes of this section, unless its affairs appear upon investigation to have been administered lawfully and with the same care and diligence that agents receiving a compensation for their services are bound to observe.

Any officer or agent of any credit union who makes or delivers any guaranty or endorsement on behalf of the credit union whereby the credit union may become liable upon any of the credit union's discounted notes, bills, or obligations in a sum beyond the amount of loans and discounts which the credit union may lawfully make, is guilty of a misdemeanor.

A director of a credit union who concurs in any vote or act of the directors of the credit union by which it is intended to make a loan or discount to any director of the credit union exceeding the amount allowed by law, is guilty of a misdemeanor.

Any officer or employee of any credit union who intentionally conceals from the directors of the credit union any discounts or loans made by the credit union between the regular meetings of its board of directors, or intentionally conceals the purchase of any securities or the sale of the credit union's securities during that period, or who knowingly fails to report to the board of directors when required to do so by law all discounts or loans made by the credit union and all securities purchased or sold by the credit union between the regular meetings of its board of directors, is guilty of a misdemeanor.

No credit union shall purchase any real or personal property or any interest in real or personal property, including, but not limited to, a leasehold, or any contract arising from the sale of real or personal property or any note or bond in which any officer, director, or employee of the credit union is personally or financially interested, directly or indirectly, for that person's own account or as the partner or agent of others, without first obtaining the written consent of the commissioner.

No officer, director, or employee of a credit union shall purchase, directly or indirectly, or be interested in the purchase of, any of the credit union's assets for an amount less than the then current market value thereof. Every person violating this section shall be liable to the people of this state for each offense in the amount of twice the market value of the assets so purchased.

No officer, director, or employee of a credit union, directly or indirectly, shall purchase or be interested in the purchase of, any of the credit union's obligations or assets for an amount less than the book value thereof, unless all the directors of the credit union previously approve the purchase by resolution and a copy of the resolution is delivered to the commissioner immediately after adoption. Every person violating this section shall be liable to the people of this state for each offense in the amount of twice the book value of the assets so purchased.

It is unlawful for any person willfully to make any untrue statement of a material fact in any document filed with the commissioner under this division, or willfully to omit to state in any document any material fact which is required to be stated therein.

Any officer, director, employee, or agent of any credit union who abstracts or willfully misapplies any of the money, funds, or property of the credit union, or willfully misapplies its credit, is guilty of a felony. Upon conviction, the court shall, in addition to any other punishment imposed, order the person to make full restitution to the credit union. Nothing in this section shall be deemed or construed to repeal, amend, or impair any existing provision of law prescribing a punishment for such an offense.