§ 280.9

Use of funds. Federal and grantee project funds may be used for.

(a) Salaries, cost of travel, and related expenses of personnel necessary for the project;

(b) Necessary supplies, equipment, and related expenses;

(c) Administrative costs directly related to the project, and indirect costs at a rate prescribed by the Department of Health, Education, and Welfare. Expenditures under the project shall be in connection with the conduct of the project as approved;

(d) Minor improvements to existing facilities of undergraduate or graduate programs in social work.

If for any reason the grantee discontinues an approved project, the grantee shall notify the Administrator in writing, giving the reasons for termination, an accounting of funds granted for the project, and other pertinent information. The grant may be terminated, in whole or in part, at any time at the discretion of the Administrator. The grantee will be given prompt notice of the termination, including the reasons therefor. Such termination shall not affect obligations incurred prior to the termination of the grant. Upon termination of a project, the proportion of unexpended funds attributable to the Federal grant shall be refunded.

§ 280.11 Publications and copyright.

Grantees may publish results of any activity assisted by the grant without

prior review by the Service. Any such publication must acknowledge the assistance received under the grant, and copies must be furnished to the Service. Where an approved project results in a book or other copyrightable material, the author is free to copyright the work, but the Service reserves a royalty-free, nonexclusive, and irrevocable license to reproduce, publish, or otherwise use, and to authorize others to use, all copyrightable or copyrighted material resulting from the grant-supported activity. § 280.12 Records and reports.

(a) The grantee shall establish and follow such accounting, budgetary, and other fiscal procedures as are necessary for the proper and efficient administration of the project, and shall maintain fiscal records. Such records shall show for each grant period the amount and disposition by the grantee of Federal funds and the grantee's share, the total cost for the grant period, and such other records as will facilitate an effective audit.

(b) The grantee shall account for all expenditures of project funds by presenting or otherwise making available vouchers or other evidence, satisfactory to the Service, of such expenditures.

(c) The granteee shall provide a progress report with each submission of an application for continuation support. A final report shall be submitted not later than 3 months after the termination of the project.

(d) The grantee shall maintain such other records and make such other reports, in such form and containing such information, as the Service may require.

301.28 301.29

Joint operations and activities.

Purchase of notes of a liquidating credit union.

301.30 Safe deposit box service.

AUTHORITY: The provisions of this Part 301 issued under sec. 21, 73 Stat. 635, 12 U.S.C. 1766; § 301.21 issued under sec. 8(5), 73 Stat. 630; 12 U.S.C. 1757(5); §§ 301.22 and 301.23 issued under sec. 8(12), 73 Stat. 631; 12 U.S.C. 1757(12); § 301.24 issued under secs. 14, 21, 73 Stat. 632, 635; 12 U.S.C. 1761b, 1766; 301.25 issued under secs. 434, 16, 79 Stat. 1247, 1048; 20 U.S.C. 1084, 994.

SOURCE: The provisions of this Part 301 appear at 25 F.R. 5286, June 14, 1960, unless otherwise noted.

§ 301.1 Organization of Federal credit unions.

(a) Persons desiring to form a Federal credit union shall submit, in duplicate, on forms prescribed by the Bureau, a proposed organization certificate (Form FCU 503B). The certificate shall be subscribed to before an officer competent to administer oaths by not less than 7 natural persons who have a common bond of occupation, or association, or are within a well-defined neighborhood, community, or rural district, and shall specifically state:

(1) The proposed name of the association.

(2) The location of the proposed Federal credit union and the territory in which it will operate.

(3) The names and addresses of the subscribers to the certificate and the number of shares subscribed by each.

(4) The par value of the shares, which shall be $5 each.

(5) The proposed field of membership, specified in detail.

(6) The term of the existence of the corporation, which may be perpetual.

(7) The fact that the certificate is made to enable such persons to avail themselves of the advantages of the Federal Credit Union Act, as amended.

Copies of the form of organization certificate may be obtained from the Washington Office of the Bureau or from any Regional Office.

(b) The proposed organization certificates shall be submitted to the Regional Representative together with a check or money order payable to the Bureau of Federal Credit Unions in the amount of $25.00 in payment of the investigation fee of $20.00 and charter fee of $5.00. The Regional Representative will investigate and make recommendations as to whether the proposed organization certificate conforms to the Act; as to the general character and fitness of the subscribers thereto; and as to the economic advisability of establishing the proposed Federal credit union. The report and recommendation of the Regional Representative shall be forwarded to the Bureau in Washington, D.C. The Director shall consider the proposed organization certificate and the recommendations of the Regional Representative and shall approve or disapprove the proposed organization certificate. The organization certificate, if approved, shall be the charter of the Federal credit union. If the organization certificate is disapproved, the incorporators shall be notified of the basis for such action and the charter fee of $5.00 shall be returned to them. Under no circumstances shall the investigation fee of $20.00 be returned.

§ 301.4 Amendment of bylaws and charters.

Amendments to the bylaws of a Federal credit union may be adopted and amendments to the charter requested as provided in the bylaws. No amendment of the bylaws or of the charter shall become effective, however, until approved in writing by the Director.

§ 301.5 Other applications.

(a) Except as otherwise provided by rule or regulation of the Bureau all applications, requests, and submittals regarding Federal credit unions, for which no form of application has been prescribed by the Bureau, shall be in writing, signed by the applicant or his duly authorized agent, and shall contain a statement of the action requested, the reasons and facts relied upon as the basis for such requested action, and the applicant's interest in the matter. The application, request, or submittal shall be addressed to the Regional Representative or to the Bureau of Federal Credit Unions in Washington, D.C. The applicant shall furnish such other pertinent information as may be required by the Director.

(b) Unless otherwise provided in these

regulations, all applications regarding Federal credit union matters shall be investigated and reviewed by the Regional Representative. The report and recommendations of the Regional Representative as to the application shall be transmitted to the Bureau in Washington, D.C. Notice of the action of the Director shall be promptly transmitted to the applicant together with a statement as to the basis for the action.

§ 301.6 Fee for supervision.

(a) Extent of fee. (1) Not later than January 31 of each calendar year, each Federal credit union shall pay to the Bureau, for the preceding calendar year, a supervision fee in accordance with the graduated scale set forth in subparagraph (2) of this paragraph on the basis of assets as of December 31 of such preceding year, but such fee shall in no event be less than $10.00: Provided, however, That no such annual fee shall be payable by such an organization with respect to the year in which its charter is issued or the year in which final distribution is made in liquidation of the credit union or the charter is otherwise canceled.

(2) Scale of supervision fees:

Total assets

Maximum fee

$500,000 or less--

Over $5,000,000‒‒‒‒

Provided, however, That no fee shall be payable with respect to the last fractional part of $1,000 of total assets.

(3) Definition of assets:

(i) The term, "assets," as used in this section shall mean all items properly coming within the classification of asset accounts as stated in the Accounting Manual for Federal Credit Unions, FCU544, as revised.

(li) The term, "total assets," as used in this section shall mean the sum of all assets.

(b) Supervision fee certificate. The treasurer of each Federal credit union shall certify as to the correctness of the Supervision Fee Certificate, Form FCU511 Rev. He shall send, not later than January 31 of each year, the original

Supervision Fee Certificate and as many copies as the Bureau may request, together with a check in payment of the supervision fee stated on the Supervision Fee Certificate to be due, to the Bureau of Federal Credit Unions in Washington, D.C. Copies of the Supervision Fee Certificate form may be obtained from any Regional Office.

(c) Checks in payment of supervision fees. All checks in payment of supervision fees shall be made payable to the Bureau of Federal Credit Unions.

(d) Audit of supervision fee computation and payment. Whenever the Bureau makes a regular or special examination of a Federal credit union, the employee of the Bureau making the examination will audit the computation

and payment of annual supervision fee(s) for the years which have elapsed since the last previous audit. Such employee shall adjust any errors in computation and the Federal credit union shall deliver to such employee a check payable to the Bureau of Federal Credit Unions to cover the amount of any underpayment of the supervision fee(s). The decision of the employee of the Bureau as to the amount due shall be final and conclusive: Provided, That the Federal credit union may make the supplementary payment subject to the results of an appeal from the employee's decision to the Regional Representative: Provided further, That the Federal credit union shall file such appeal within 30 days from the date of the employee's decision. If the audit discloses that an overpayment has been made, the employee of the Bureau is authorized to advise and assist the Federal credit. union to prepare and file a request for a refund of the amount of overpayment. Such request should be addressed to the Regional Representative.

§ 301.7 Fee for examination.

(a) Each Federal credit union shall pay the Bureau a fee for each examination in accordance with the schedule of fees fixed from time to time by the Director.

(b) In establishing such fees, the Director shall consider the anticipated aggregate cost of the examination program including supervision, salaries, travel and all other items which affect the cost of the examination program.

(c) The fee for examinations of Federal credit unions with assets of less than $25,000 shall not exceed 50 cents per hundred dollars of assets as of the effective date of the examination. The Director may establish a minimum fee for examination which shall not exceed $25.00. The Director may waive the fee for an examination within twelve months after the date a charter is approved if the payment would, in the opinion of the Director, cause a hardship.

(d) Each Federal credit union shall be notified at least 30 days prior to the effective date of any schedule of fees fixed pursuant to this section. Upon receipt of such notification interested persons may submit written data, views, or arguments for consideration by the Director, and the Director may, after con

sideration, make such revisions in the proposed schedule or such change in the effective date as he deems appropriate. Each Federal credit union shall be notified of such revision or change not less than 15 days prior to the final effective date.

§ 301.8 Fee for examination of Federal credit unions in liquidation.

Federal credit unions in liquidation may be examined prior to or following completion of liquidation. A fee assessed in accordance with the most recent schedule of examination fees prescribed by the Director as provided in § 301.7 shall be paid for each such examination. § 301.9 Loans by Federal credit unions to other credit unions.

(a) Upon authorization of its board of directors, or a duly authorized and appointed executive committee, a Federal credit union may invest its funds in loans to other credit unions in the total amount not exceeding 25 percent of its paid-in and unimpaired capital and surplus. The terms of the loans shall not exceed 1 year.

(b) Prior to making such loans, the Federal credit union shall require the borrowing credit union to furnish the following:

(1) A current financial and statistical report;

(2) A certified copy of the resolution of the board of directors or the executive committee authorizing such borrowing; and

(3) A certificate from the secretary of the credit union that the persons negotiating the loan and executing the note are officers of the credit union and are authorized to act in its behalf, and that such borrowing does not exceed the maximum borrowing power of the borrowing credit union.

[34 F.R. 1398, Jan. 29, 1969]

§ 301.10 Establishment of a cash fund.

The board of directors of a Federal credit union may authorize the establishment of or changes in a cash fund for making change, cashing checks, or other purposes. Before such authorization is given, the directors will consider whether a need for the fund exists and will insure that adequate safeguards and accountability will exist to protect the fund. [34 F.R. 1398, Jan. 29, 1969]