CREDIT UNIONS ACT
Wholly Amended by Act No. 5506, Jan. 13, 1998
Amended by Act No. 5739, Feb. 1, 1999
Act No. 5982, May 24, 1999
Act No. 6018, Sep. 7, 1999
Act No. 6187, Jan. 21, 2000
Act No. 6204, Jan. 28, 2000
Act No. 6256, Jan. 28, 2000
Act No. 6957, Jul. 30, 2003
Act No. 7428, Mar. 31, 2005
Act No. 8145, Dec. 30, 2006
Act No. 8635, Aug. 3, 2007
Act No. 8840, Jan. 17, 2008
Act No. 8852, Feb. 29, 2008
Act No. 8863, Feb. 29, 2008
Act No. 10303, May 17, 2010
Act No. 10522, Mar. 31, 2011
Act No. 10682, May 19, 2011
Act No. 10866, Jul. 21, 2011
Act No. 11039, Aug. 4, 2011
Act No. 11545, Dec. 11, 2012
Act No. 12382, Jan. 28, 2014
Act No. 13067, Jan. 20, 2015
Act No. 14457, Dec. 20, 2016
Act No. 14824, Apr. 18, 2017
Act No. 16292, Jan. 15, 2019
Act No. 16652, Nov. 26, 2019
Act No. 17112, Mar. 24, 2020
Act No. 17803, Dec. 29, 2020
CHAPTER I GENERAL PROVISIONS
The purpose of this Act is to contribute to the development of local communities’ economy by improving the economic and social status of the members of credit unions through sound fosterage thereof on the basis of their common bonds, and also providing the residents of local communities with financial convenience.
[This Article Wholly Amended on Jan. 20, 2015]
The terms used in this Act are defined as follows:
| 1. | The term "credit union (hereinafter referred to as "union")" means a non-profit corporation established pursuant to this Act to achieve the purpose specified in Article 1; |
| 2. | The term "National Credit Union Federation of Korea (hereinafter referred to as the "National Federation")" means a non-profit corporation established pursuant to this Act with an objective of pursuing the common interest of unions; |
| 3. | The term "common bond" means a unit on the basis of which the establishment of a union and the qualifications for members thereof are determined; |
| 4. | The term "union member" means a person qualified for the member as provided in Article 11 (1) and (2), who has been admitted to a union, as prescribed in its articles of association; |
| 5. | The term "illegal or non-performing loan" means a loan or bill discount (hereinafter referred to as a "loan, etc."), and the provisionally paid amount (hereinafter referred to as "provisional payments"), falling under either of the following: |
| (a) | A loan, etc. granted in violation of Article 42; |
| (b) | A loan, etc. or provisional payments deemed difficult or impossible to collect and falling under the criteria prescribed by the Financial Services Commission (hereinafter referred to as a "non-performing loan"); |
| 6. | The term "standard articles of association" means the articles of association established by the National Federation to provide in detail matters necessary for the establishment and management of unions and apply them to all unions in a uniform manner; |
| 7. | The term "standard regulations" means the regulations established by the National Federation to provide in detail matters necessary for the management of unions and apply them to all unions in a uniform manner; |
| 8. | The term "local union" means a union established on the basis of a common bond of the same administrative district, economic sphere, or life boundary; |
| 9. | The term "equity capital" means the aggregate of capital stock, reserves, surplus etc., the amount of which is prescribed by Presidential Decree. |
[This Article Wholly Amended on Jan. 20, 2015]
| (1) | Each union shall use the word "credit union" or "sin-hyeob" as part of its name. |
| (2) | No one else but unions and the National Federation may use the words "credit union" or any similar word in its name. |
[This Article Wholly Amended on Jan. 20, 2015]
| (1) | Unions and the National Federation shall be established at the time they register such establishment at the locations of their principal offices, respectively. |
| (2) | The registration office shall keep the "credit union register" separately. |
| (3) | Except as prescribed by this Act, other matters necessary for the registration of unions and the National Federation shall be prescribed by Presidential Decree. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 5 (Cooperation with other Cooperatives) |
| (1) | The National Federation shall endeavor to promote mutual cooperation, interest enhancement, and joint projects development with cooperatives under other Acts. |
| (2) | The National Federation may compose and operate a consultative council jointly with cooperatives under other Acts if necessary for achieving objectives specified in paragraph (1). |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 6 (Relationship to Other Statutes) |
| (1) | The provisions of the Insurance Business Act shall not apply to the mutual aid business of a union and the National Federation. |
| (4) | A union shall be deemed to be a person subject to Article 45-2 of the Act on the Establishment of Korea Asset Management Corporation in applying the same Article. <Amended on Nov. 26, 2019> |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 7 (Establishment) |
| (1) | In order to establish a union, at least 30 promoters who belong to the common bond of the union shall prepare the articles of association with resolution of its inaugural general meeting, and shall obtain authorization by the Financial Services Commission via the Chairperson of the National Federation (hereinafter referred to as the "Chairperson of the National Federation"), as prescribed by Presidential Decree. |
| (2) | A resolution of the inaugural general meeting shall require the presence of a majority of the persons who have submitted to the representative of the promoters their written consent to the establishment of the union until the day immediately before the meeting is held, and the concurring vote of at least than 2/3 of those present. |
| (3) | A person who intends to obtain authorization under paragraph (1) shall submit an application to the Financial Services Commission, as prescribed by Presidential Decree. |
| (4) | The Financial Services Commission may impose any condition on the authorization under paragraph (1). |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 8 (Requirements for Authorization) |
| (1) | A person who intends to obtain authorization for establishment of a union under Article 7 (1) shall meet the following requirements: |
| 1. | He or she shall meet the requirements referred to in Article 14 (4); |
| 2. | He or she shall be equipped with professional human resources and physical facilities, including electronic and computer facilities, sufficient to protect the union members and conduct the union’s business; |
| 3. | The person shall have a feasible and sound business plan; |
| 4. | The promoters shall be equipped with sufficient ability to make investments, sound financial status, and high social trust. |
| (2) | The Financial Services Commission shall, upon receipt of an application for establishment of a union, notify the applicant of whether to grant authorization within a period of time prescribed by Presidential Decree. In such cases, the ground for rejection shall be clearly stated if the application is rejected. |
| (3) | Where the Financial Services Commission fails to notify an applicant of whether to grant authorization within a period determined by paragraph (2) or whether to extend the period of processing civil affairs in any related statute or regulation, it shall be deemed that the authorization is granted on the day following the day of expiration of the such period (where the processing period is extended or re-extended under any statute or regulation related to the processing of civil affairs, referring to the processing period). <Newly Inserted on Jan. 15, 2019> |
| (4) | Matters necessary for the detailed requirements for the authorization under paragraph (1) shall be prescribed by Presidential Decree. <Amended on Jan. 15, 2019> |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 8-2 (Public Announcement of Authorization) |
When the Financial Services Commission grants authorization in accordance with Article 7 (1) or revokes authorization in accordance with Article 85, it shall publicly announce the details of such authorization or revocation in the official gazette without delay, and publicly announce them to the general public through computer telecommunications system, etc. [This Article Wholly Amended on Jan. 20, 2015]
| Article 9 (Common Bond and Office) |
| (1) | The common bond of a union shall be prescribed by the articles of association mainly based on its administrative district, economic sphere, life boundary, workplace, organization, etc. In such cases, matters concerning the scope, type, and change of common bond shall be prescribed by Presidential Decree. |
| (2) | A union’s principal office shall be prescribed by its articles of association. |
| (3) | A union may establish branch offices with approval from the Chairperson of the National Federation. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 10 (Matters to Be Stated in the Articles of Incorporation) |
The articles of association of a union shall contain the following matters:
| 3. | The location of the principal office; |
| 4. | Matters concerning the common bond; |
| 5. | Matters concerning membership, admission, withdrawal, expulsion of union members; |
| 6. | Value per share of investment, and the payment method and term thereof; |
| 7. | Matters concerning the rights and duties of union members; |
| 8. | Matters regarding the scope of business and accounting; |
| 9. | Matters concerning the organs and executive officers; |
| 10. | Matters regarding dissolution; |
| 11. | The methods of public announcement; |
| 12. | Matters regarding the transfer of contributions; |
| 13. | Other matters necessary for operation of general meetings, etc. |
[This Article Wholly Amended on Jan. 20, 2015]
SECTION 2 UNION MEMBER AND INVESTMENT
| Article 11 (Qualification for Membership) |
| (1) | A union member shall be a person who belongs to any common bond of a union and has paid the first installment of his or her investment money. |
| (2) | Notwithstanding paragraph (1), a union may include in the scope of union members those persons prescribed by Presidential Decree from among those who do not belong to any common bond of the union within the limit not impairing the purpose of the establishment of that union and the efficient operation thereof. |
| (3) | The number of members of a union shall be not less than 100. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 12 Deleted. <Feb. 1, 1999> |
The capital of a union shall be the aggregate amount of the investments paid by its members.
[This Article Wholly Amended on Jan. 20, 2015]
| Article 14 (Investment Money) |
| (1) | Each union member shall own at least one share of investment. |
| (2) | Value per share of investment shall be prescribed by the articles of association. |
| (3) | The number of shares of investment held by one union member may not exceed 10/100 of the total number of shares of investment. |
| (4) | The minimum amount of the aggregate of all the investment money of union members shall be as follows: |
| 1. | In case of a local union, the amount set forth in one of the following, depending upon the location of its principal office: |
| (a) | The Special Metropolitan City or a Metropolitan City: 300 million won; |
| 2. | In case of a workplace union: 40 million won; |
| 3. | In case of an organization union, the amount referred to in any of the following, which depends upon the location of its principal office: |
| (a) | The Special Metropolitan City or a Metropolitan City: 100 million won; |
| (b) | The Special Self-Governing City or Si: 80 million won; |
| (5) | Investment money to be paid to a union shall be paid in cash, and may not be set off with a claim to the union. |
| (6) | Investment money paid by a union member may not be the object of a pledge right. |
[This Article Wholly Amended on Jan. 20, 2015]
| (1) | A union member may transfer his, her or its investment money to other members as prescribed by the articles of association. |
| (2) | A transferee of investment money shall succeed to the rights and duties of the transferor. |
| (3) | No union member may co-own investment money with other members. |
[This Article Wholly Amended on Jan. 20, 2015]
| (1) | A union member may, with prior notice, withdraw from a union as provided in the articles of association. |
| (2) | A union member shall be deemed to withdraw from the union in any of the following cases: |
| 1. | Forfeiture of qualification for member; |
| 2. | Where the relevant person died; |
| 3. | When companies went bankrupt; |
| 4. | Becoming an incompetent person under the adult guardianship; |
| 5. | If an incorporated member is dissolved; |
| (3) | Matters concerning the forfeiture of qualification for member under paragraph (2) 1 shall be prescribed by the articles of association. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 17 (Refund of Investment Money of Union Member Withdrawn or Expelled) |
| (1) | A union shall refund the member his, her or its investment money, deposit money, and installment savings without delay when any of its members has withdrawn or has been expelled therefrom. In such cases, the dividend deriving from the investment money may be paid to that member at the time dividends are paid to other union members. |
| (2) | Where a union is unable to reimburse debts with its properties, the union may pay a refund after deducting the loss amount to be borne by the union member withdrawn or expelled, as provided by its articles of association, when refunding the investment money under paragraph (1). |
[This Article Wholly Amended on Jan. 20, 2015]
| (1) | A union may expel a union member by a resolution of a general meeting of the union if he, she or it falls under any of the following subparagraphs: |
| 1. | Where he, she or it fails to pay his, her or its investment money or perform his, her or its obligation to the union; |
| 2. | Where he, she or it has violated this Act, an order under this Act, or the articles of association of the union; |
| 3. | Where he, she or it has not used the service referred to in Article 39 (1) 1 (a), (b), or (f) for two years or longer; |
| 4. | Where at least six months have elapsed since the value of the investment held by the union member was less than one share of investment. |
| (2) | A union shall, where intending to expel any member pursuant to paragraph (1), notify the member of the ground for expulsion at least 10 days before a general meeting is held, and shall give the said member an opportunity to make a statement at a general meeting. |
| (3) | A resolution adopted by a general meeting to expel a union member may not be asserted against the member, unless an opportunity to make a statement under paragraph (2) is given the member. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 19 (Right to Resolution and Voting Right) |
| (1) | All union members shall equally have a right to resolution and a right to vote regardless of their numbers of shares of investment: Provided, That any restriction may, as prescribed by the articles of association, be imposed on the right to resolution and the right to vote of a union member who is a minor or whose membership period is less than three months. |
| (2) | A union member may have his, her or its agent exercise a right to resolution and a right to vote: Provided, That a member of any union the common bond of which is the district or organization may not have his, her or its agent exercise a right to resolution and a right to vote. |
| (3) | The number of union members whom one union member may act on behalf of pursuant to paragraph (2) shall be provided for by the articles of association. |
| (4) | The agent under paragraph (2) shall present a document certifying his or her agency authority to the union. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 20 (Union Member’s Liability) |
The liability of a union member shall be limited to his, her or its investment amount.
[This Article Wholly Amended on Jan. 20, 2015]
| Article 21 Deleted. <Feb. 1, 1999> |
| Article 22 (Request for Revocation of Resolution) |
| (1) | Any union member who has an objection to the effect of a resolution by a general meeting or an election of an executive may request the Chairperson of the National Federation to revoke such resolution or election result, with the consent from at least 1/10 of the union members, within one month from the date of resolution or election. |
| (2) | Upon receipt of the request under paragraph (1), the Chairperson of the National Federation shall notify the requesting union member of the treatment results thereof within three months. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 23 (General Meetings) |
| (1) | There shall be established a general meeting in a union. |
| (2) | A general meeting of a union shall be composed of all union members, and shall be convened by the president of the union once every business year, while a special general meeting may be convened as provided in the articles of association where the president of the union deems necessary or where a request is made by a union member or auditor pursuant to Article 26. |
| (3) | The president of the union shall preside over a general meeting. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 24 (Matters subject to Resolution of General Meeting) |
| (1) | The following matters shall be subject to resolution by a general meeting: |
| 1. | Amendments to the articles of incorporation; |
| 2. | Final decision on the business plan and budget; |
| 3. | Selection and appointment, and dismissal of executive officers; |
| 4. | Approval of the report on the settlement of accounts (including a business report, a balance sheet, a statement of profit and loss, and a surplus appropriation plan, or a deficit disposition plan; hereinafter the same shall apply); |
| 5. | Approval of audit reports; |
| 6. | Dissolution, merger, division, or suspension of operations of the union; |
| 8. | Establishment, amendment, or repeal of bylaws; |
| 9. | Other necessary matters as specified by the articles of association. |
| (2) | Where the articles of association has been amended pursuant to paragraph (1) 1, the amended matter shall be registered after obtaining approval of the Chairperson of the National Federation: Provided, That where amending it in compliance with the standard articles of association under Article 75 (1) 1, the approval of the Chairperson of the National Chairperson shall not be required. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 25 (Holding and Resolution of General Meeting) |
| (1) | Except as otherwise provided in this Act, a majority of all the members of a union shall constitute a quorum and any resolution thereof shall require the concurring vote of a majority of the members present: Provided, That where the number of all the members exceeds 500, at least 251 members shall constitute a quorum and any resolution thereof shall require the concurrent vote of a majority of the members present. |
| (2) | Matters referred to in Article 24 (1) 1 and 6 shall require the concurring vote of at least 2/3 of the union members present. |
| (3) | Where any agenda item with respect to which a conflict of interest exists between the union and any member thereof, that member shall not participate in a resolution on the agenda item. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 26 (Request for Convocation of General Meeting) |
| (1) | A union member may request the president of the union to convene a general meeting by filing a written request with him or her specifying the purpose of the meeting and the reason for convocation thereof with the consent of at least 1/5 of the union members. |
| (2) | An auditor may request the president of the union to convene a general meeting by filing a written request with him or her specifying the purpose of the meeting and the reason for convocation thereof where as a result of audit and inspection under Article 37, he or she finds out any unjustifiable fact and deems it necessary to promptly report the content thereof to a general meeting. |
| (3) | The president of a union shall hold a general meeting within 15 days, upon receiving a request under paragraph (1) or (2). |
| (4) | Where there is no person who is able to convene a general meeting, or the president of the union fails to hold a general meeting within the period prescribed in paragraph (3) without good cause, the auditor shall convene a general meeting without delay. In such cases, the auditor shall take the chair of the general meeting on behalf of the president of the union. |
| (5) | Where the auditor fails to convene a general meeting pursuant to paragraph (4) even though any union members have requested the convocation of a general meeting pursuant to paragraph (1), the representative of such union members who have requested the convocation of a general meeting pursuant to paragraph (1) shall convene a general meeting. In such cases, the representative of such union members shall take the chair over the general meeting on behalf of the president of the union. |
| (6) | Where a general meeting is convened pursuant to paragraph (4) or (5), it shall be reported to the Chairperson of the National Federation in advance. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 26-2 (Special Cases concerning Resolution of General Assembly) |
| (1) | With respect to the following matters, notwithstanding Article 24 (1), a vote of union members may take place in lieu of a resolution of a general meeting. In such cases, notification and methods of voting by union members, and other matters necessary for voting shall be prescribed by the articles of association or the relevant union: |
| 1. | Dissolution, merger, or split-off of the cooperative; |
| 2. | Election of executive officers of a union (limited to executive officers under Article 27 (3). |
| (2) | Votes by union members for a matter falling under each subparagraph of paragraph (1) shall be treated on the basis of the following classification: |
| 1. | A matter falling under paragraph (1) 1: A majority vote of all union members (referring to at least 251 persons where the number of all union members exceeds 500) and the concurrent vote of 2/3 of union members present, shall be required for a resolution; |
| 2. | A matter falling under paragraph (2) 2: Where electing the president and vice-president of a union, the candidate for such office who has obtained the largest number of votes by a majority vote of electors (referring to persons who have a right to vote as prescribed by the articles of association: hereinafter the same shall apply) shall be determined to be an electee, while for election of an executive officer required to be a union member pursuant to Article 27 (2) from among executive officers other than the president or the vice-president, the electee is determined in the order of the candidates who have obtained larger number of votes than others by a majority vote of electors. In such cases, the proviso to Article 25 (1) shall apply mutatis mutandis. |
[This Article Newly Inserted on Jan. 20, 2015]
| Article 27 (Executive officers) |
| (1) | There shall be in a union at least five, but up to nine directors, including one president and one vice-president, and two or three auditors, as its executive officers. |
| (2) | The executive officers shall be elected by a general meeting as prescribed by the articles of association (a by-election to fill a vacancy of an executive officer shall be conducted as separately prescribed by the articles of association), and at least 2/3 of the executive officers, including the president of the union, shall be the members of the union. |
| (3) | Where electing the president and vice-president of a union pursuant to Article 24 (1) 3, the candidate for such office who has obtained the largest votes by a majority vote of electors shall be determined to be an electee, while for election of an executive officer required to be a union member pursuant to paragraph (2) from among executive officers other than the president or the vice-president, the electee shall be determined in the order of the candidates who have obtained a larger number of votes than others by a majority vote of electors. In such cases, the proviso to Article 25 (1) shall apply mutatis mutandis. |
| (4) | The president of a union shall have general control over the business affairs of the union, and shall represent the union. |
| (5) | Where the president of a union is unable to perform his or her duties due to any unavoidable cause, the vice-president and thereinafter any of directors in the order provided in the articles of associations shall act on behalf of the president. |
| (6) | In cases of a union prescribed by Presidential Decree in consideration of its asset size, financial structure, etc., its president or at least one of its directors other than the president (hereinafter referred to as “full-time director”) shall be full-time: Provided, That in cases of a union whose president is part-time as prescribed by Presidential Decree, it shall appoint a full-time director. <Amended on Apr. 18, 2017> |
| (7) | A full-time director shall be in exclusive charge of treating business under subparagraphs 1 and 3 of Article 39 (1) and other business incidental thereto. In such cases, the president of the union shall take appropriate measures, such as delegation of his or her authority, so that the relevant full-time director may conduct any business under his or her charge independently. <Amended on Apr. 18, 2017> |
| (8) | A union prescribed by Presidential Decree, in consideration of its asset size, etc., shall appoint one full-time auditor from among auditors under paragraph (1). In such cases, the full-time auditor shall not be a member of the union. <Newly Inserted on Apr. 18, 2017> |
| (9) | Full-time directors and a full-time auditor (hereinafter referred to as “full-time executive officers”) shall be elected at a general meeting via a resolution of the board of directors, from among persons with abundant expertise and experience in affairs regarding unions. <Amended on Apr. 18, 2017> |
| (10) | Matters necessary for the standards and requirements for appointing full-time executive officers shall be prescribed by Presidential Decree. <Amended on Apr. 18, 2017> |
| (11) | Where a full-time executive officer is unable to perform any of his or her duties due to any unavoidable cause, any of the officers under Article 30 shall act on his or her behalf in the order determined by the board of directors. <Amended on Apr. 18, 2017> |
| (12) | The remuneration of the president and full-time executive officers of a union shall be determined at its general meeting in accordance with the standards determined by the Chairperson of the National Federation. <Amended on Apr. 18, 2017> |
| (13) | The office of executive officers other than full-time executive officers under paragraphs (6) and (8) shall be honorary and such executive officers may be reimbursed actual expenses as prescribed by the articles of association of the union. <Amended on Apr. 18, 2017> |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 27-2 (Restriction on Election Campaign for Executive Officers) |
| (1) | No one shall commit any of the following acts with intent to being elected to be an executive officer of a union, or making other person elected or making other person not elected to be such an executive officer: |
| 1. | An act of offering, expressing his or her will to offer, or promising to offer, money, goods, entertainment or proprietary interests, or a public or private position, to a union member (including a person who belongs to the same common bond and is able to be an elector; hereafter the same shall apply in this Article) or his or her family member (referring to the spouse of a union member; a lineal ascendant or descendant, or brother or sister of a union member or his or her spouse; or the spouse of a lineal ascendant or descendant, or brother or sister of a union member; hereinafter the same shall apply), or an institution, organization or facility established and operated by a union member or a family member thereof; |
| 2. | An act of committing any act set forth in subparagraph 1 toward a person who is willing to come forward as a candidate or has already come forward as a candidate with intent to prevent him or her from coming forward as candidate or pressing him or her to resign from the candidacy; |
| 3. | An act of accepting any interests or position set forth in subparagraph 1 or 2, or accepting an offer for such interests or position. |
| (2) | With respect to an election of an executive officer, no one shall conduct an election campaign in a manner not falling under any of the following subparagraphs: Provided, That a simple statement of his or her opinion or expression of his or her will, any acts of preparing candidacy and election campaign, or ordinary activities for his or her duties shall not be deemed an election campaign: |
| 1. | Posting propaganda posters; |
| 2. | Distribution of election campaign bulletins; |
| 3. | Holding joint speeches or public forums; |
| 4. | Appeals for support by utilizing telephone calls (including text messages) and computer communications (including electronic mails); |
| 5. | Handing out name cards and appealing for support at any open places where the multitudes pass or gather, such as roads and markets, which are determined and publicly notified by the Financial Services Commission. |
| (3) | An election campaign shall be conducted from the day immediately after the closing date for candidate registration to the day immediately preceding the election date: Provided, That the same shall not apply to cases where a candidate presents his or her opinions on the election day for an election of the president of the union. <Amended on Dec. 29, 2020> |
| (4) | Details of election campaign methods and the like under paragraph (2) shall be prescribed by Ordinance of the Prime Minister. <Amended on Dec. 29, 2020> |
[This Article Wholly Amended on Jan. 20, 2015]
[Article 27-2 (2) through (4) of the Credit Unions Act (amended by Act No. 13067, Jan. 20, 2015) have been found to be simply unconstitutional according to the Constitutional Court Decision 2017 Heonba 278 dated June 25, 2020]
| Article 27-3 (Organization and Operation of Union Election Commission) |
| (1) | The union shall organize and operate a union election commission as prescribed by Presidential Decree to manage elections for executive officers in a fairly manner. |
| (2) | The union may entrust managing elections of executive officers to be elected under Article 27 (2), (3), and (9) to any election commission under Si/Gun/Gu under the Election Commission Act having jurisdiction over the principal office of the union prescribed by its articles of association. |
[This Article Newly Inserted on Jan. 15, 2019]
| Article 28 (Restriction on Qualifications for Executive Officers) |
| (1) | Persons who fall under any of the following subparagraphs shall not be qualified for an executive officer or promoter of a union: |
| 1. | A person under the adult guardianship, or under the limited guardianship, or a person who has been declared bankrupt and has not be reinstated; |
| 2. | A person in whose case three years have not passed since imprisonment without labor or greater punishment declared by a court was completely executed (including where the execution of such sentence is deemed completed) or since he or she was exempted from such sentence; |
| 3. | A person who is under the suspension of the execution of a sentence declared by a court; |
| 4. | A person for whom the sentence of imprisonment without labor or heavier punishment was suspended and who is still in the period of suspension of the sentence; |
| 5. | A person in whose case five years have not passed since a sentence of a fine or any heavier punishment declared by a court for violation of this Act or any finance-related statutes and regulations prescribed by Presidential Decree (hereafter referred to as "finance-related statutes and regulations" in this Article) was completely executed (including where it is deemed that such sentence was completely executed) or discharged; |
| 6. | A person whose qualifications for executive officer, etc. is forfeited or suspended by a decision of a court or in accordance with any other Act; |
| 7. | A person in whose case five years have not passed since he or she was dismissed from office (including a case where an executive officer is replaced by another person under Article 84 (1) 1; hereafter the same shall apply in this Article) or was punished by disciplinary dismissal pursuant to this Act or any finance-related statutes and regulations; |
| 8. | A person who had worked as an executive officer or employee of a company or corporation (limited to an executive officer or employee prescribed by Presidential Decree as a person directly or substantially responsible for the occurrence of the cause of revocation below), and five years have not passed from the date on which the permission, authorization, or registration for business of such corporation or company was revoked pursuant to this Act or any finance-related statutes and regulations; |
| 9. | A person in whose case the period prescribed by Presidential Decree has not passed yet since he or she was punished by any such disciplinary action not lighter than suspension from office or suspension of business performance as prescribed by Presidential Decree pursuant to this Act or any finance-related statutes and regulations; |
| 10. | A person who is a retired or resigned executive officer or employee and in whose case five years have not passed from the date of notification that he or she would have been punished by an action of demand for dismissal or an action of disciplinary dismissal pursuant to this Act or any finance-related statutes and regulations if he or she had been an incumbent executive officer or employee (or seven years have not passed from the date of retirement or resignation, where the date on which the five years will have passed from the date of the notification is later than the date when seven years will have passed from the date of retirement or resignation); |
| 11. | A person who is a retired or resigned executive officer or employee and in whose case the period specified by Presidential Decree has not passed from the date of notification that he or she would have been punished by any such disciplinary action not lighter than suspension from office or action of suspension of business performance as prescribed by Presidential Decree pursuant to this Act or any finance-related statutes and regulations if he or she had been an incumbent executive officer or employee (or six years have not passed from the date of retirement where the date on which the period specified by Presidential Decree will have passed from the date of the notification is later than the date when six years will have passed from the date of retirement or resignation); |
| 12. | A person who falls under any such cause of restriction on qualifications as prescribed by the articles of association. |
| (2) | An executive officer shall be dismissed immediately where a cause set forth in paragraph (1) (excluding subparagraph 9) is discovered or occurs. |
| (3) | An act in which an executive officer dismissed under paragraph (2) was involved before his or her dismissal shall not become invalid or ineffective. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 29 Deleted. <Feb. 1, 1999> |
| (1) | A union may appoint a senior managing director or a managing director as an officer. |
| (2) | The criteria for unions that may appoint a senior managing director or a managing director as an officer and criteria for the appointment and dismissal of such an officer shall be determined by the Chairperson of the National Federation. |
| (3) | A senior managing director or a managing director shall deal with affairs concerning finance and accounting of the union upon the order of the president of the union (referring to a full-time director in cases of any business which a full-time director is in exclusive charge of dealing with pursuant to Article 27 (7)), and shall be responsible for the preservation of evidential documents regarding finance and accounting, the receipts and disbursements, and custody of money. <Amended on Apr. 18, 2017> |
| (4) | A senior managing director or a managing director shall be appointed and dismissed by the president of the union via resolution by the board of directors from among the persons who have qualifications recognized the Chairperson of the National Federation. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 30-2 (Prohibition of Bribery) |
No executive officer or employee of a union may demand, receive, or promise a gift or any bribery regardless of whether it is directly or indirectly related to his or her job.
[This Article Wholly Amended on Jan. 20, 2015]
| Article 31 (Term of Office) |
| (1) | An executive officer shall hold office for a term of four years and may be appointed consecutively for further terms: Provided, That the president of a union may be re-elected only for two consecutive terms. |
| (2) | The term of office of executive officers elected at a by-election shall be the remaining term of his or her predecessor. |
| (3) | Notwithstanding paragraph (1), the term of office of executive officers at the time of the establishment of a union shall be prescribed by the articles of association within the period not exceeding four years. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 32 (Sanction against Executive Officer who Fails to Fulfill Obligation) |
The board of directors may, where an executive officer fails to fulfill his or her obligation to the union within three months, suspend the exercise of his or her functions.
[This Article Wholly Amended on Jan. 20, 2015]
| Article 33 (Responsibilities of Executive Officers) |
| (1) | Each executive officer shall comply with this Act, an order issued under this Act, the articles of association and by-laws of the union, and the resolution by a general meeting or the board of directors of the union, and shall faithfully perform his or her duties in the interest of the union. |
| (2) | Each executive officer shall be jointly and severally liable for the damages caused to the union or a third party by intention or gross negligence (by intention or negligence in case of a full-time executive officer) in the course of performing his or her duty. |
| (3) | Paragraph (2) shall also apply where an executive officer causes damage to the union or a third party by falsity or misrepresentation in his or her report on the settlement of accounts, the registration, or public announcement. |
| (4) | If the board of directors causes damage to the union or a third party by intention or gross negligence, the executive officers who attended the board of directors involved in the intention or gross negligence shall be jointly and severally liable for the damage: Provided, That the same shall not apply to the executive officers who expressed a dissenting opinion at the meeting. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 34 (Board of Directors) |
| (1) | A union shall have the board of directors consisting of directors. |
| (2) | The president of a union shall take the chair of the meetings of the board of directors. |
| (3) | A director may not participate in the proceedings of the board of directors for the issue on which a conflict exists between the union’s interest and his or her personal interest. |
| (4) | The board of directors shall supervise business affairs executed by the president of the union (referring to a full-time director in case of any business which the full-time director is in exclusive charge of dealing with pursuant to Article 27 (7)) and officers in connection with the matters resolved pursuant to Article 36 (1), and may request them to report any necessary matters to the board of directors. <Amended on Apr. 18, 2017> |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 35 (Convocation of Meetings of Board of Directors) |
| (1) | The meetings of the board of directors shall be convened by the president of a union as prescribed by the articles of association. |
| (2) | The president of a union shall, upon the request by two or more directors or auditors, convene a meeting of the board of directors without delay. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 36 (Matters subject to Resolution by Board of Directors) |
| (1) | The following matters shall undergo resolution by the board of directors: |
| 1. | Establishment, amendment, or repeal of regulations; |
| 2. | Acquisition and disposition of fundamental properties; |
| 3. | Decision-making on the basic direction-setting for the execution of business; |
| 4. | Borrowing of funds as required (or maximum limit where borrowing such funds from the National Federation); |
| 5. | Disposition of various reserves; |
| 6. | Matters to be referred to a general meeting for deliberation; |
| 7. | Important matters not belonging to the competence of a general meeting. |
| (2) | A majority of the members of the board of directors shall constitute a quorum, and resolution thereof shall require the concurring vote of a majority of those present. |
| (3) | The management, convocation methods, etc. of the board of directors shall be prescribed by the articles of association. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 37 (Auditors' Duties) |
| (1) | The auditors shall audit and inspect the business affairs, property status, and books and documents of the union after giving notice on the conduct of audit and inspection at least once every quarter of a year and shall submit quarterly reports on audit and inspection to the board of directors, and the annual report summing up the quarterly reports to a general meeting, respectively. |
| (2) | The auditors shall contrast for verification of the deposit passbooks and other deeds of substantial number of union members with the accounting books or records of the union without giving an advance notice at least once every half of a year. |
| (3) | The notice on the conduct of audit and inspection and the submission of reports of audit and inspection under paragraph (1) shall be jointly given and conducted by two or more auditors: Provided, That if the auditors differ in opinion on any matter, each auditor may present his or her own opinion thereon. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 38 (Auditors' Authority to Represent) |
An auditor shall represent the union in conducting legal acts, such as the performance of a litigation against and the conclusion of a contract with the president of the union.
[This Article Wholly Amended on Jan. 20, 2015]
| Article 39 (Categories of Business) |
| (1) | A union shall engage in the following business activities in order to accomplish its purpose: |
| (a) | Reception of deposits and installment savings of its members; |
| (b) | Lending loans to its members; |
| (d) | Providing service commissioned by the State, a public organization, the National Federation or a financial institution; |
| (e) | Custody, etc. of securities, precious metals, and valuable goods for its members; |
| (g) | Issuance and management of electronic means for direct debit payment and the settlement of such payments as prescribed by the Electronic Financial Transactions Act (limited to where it jointly engages in the business of the National Federation under Article 78 (1) 5 (g)); |
| (h) | Issuance, management, and sale of electronic prepayment means and the settlement of such payments as prescribed by the Electronic Financial Transactions Act (limited to cases where a union jointly engages in the business of the National Federation under Article 78 (1) 5 (h)); |
| 3. | Mutual aid business for its members; |
| 4. | Education for enhancing economic and social status of its members; |
| 5. | Business entrusted by the Federation; |
| 6. | Business which is entrusted by the State or a public organization, or is prescribed by other statutes and regulations to be a business of a union; |
| 7. | Businesses incidental to the businesses under subparagraph 1 through 6. |
| (2) | Necessary matters concerning the scope and conduct of the welfare service under paragraph (1) 2 shall be prescribed by Presidential Decree. |
| (3) | The Financial Services Commission may publicly notify methods for treating affairs regarding deposits, installment savings, loans, etc. in connection with the credit business provided by unions under paragraph (1) 1. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 40 (Non-Union Members’ Use of Business) |
| (1) | A union may permit non-union members to use its business under Article 39 (1) within the extent not interfering with its members’ use thereof, as prescribed by Presidential Decree. In such cases, the term "union member" shall be construed as "non-union member". |
| (2) | The use of the business under paragraph (1) by a person who belongs to the same household as any union member, another union, or a member of another union shall be deemed as if it were the use thereof by a union member |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 41 (Borrowing Funds) |
| (1) | A union may borrow funds within the limit of the amount equivalent to 5/100 of its total assets or the amount of its equity capital, whichever is greater, to conduct any business under Article 39 as prescribed by Presidential Decree. |
| (2) | Notwithstanding paragraph (1), a union may borrow funds exceeding the limit of the amount equivalent to 5/100 of its total assets or the amount of its equity capital, whichever is greater, where obtaining approval from the Chairperson of the National Federation in conformity with the criteria determined by the Financial Services Commission, |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 42 (Limit of Loans Granted to Same Person) |
Except as approved by the Chairperson of the National Federation in compliance with the criteria determined by the Financial Services Commission, a union shall not grant the same person a loan, etc. exceeding the ceiling prescribed by Presidential Decree within the limit of the amount equivalent to 20/100 of its equity capital or 1/100 of its total assets, whichever is greater. In such cases, a loan, etc. granted on the principal’s account but in other person’s name shall be deemed to be a loan, etc. granted to the principal.
[This Article Wholly Amended on Jan. 20, 2015]
| Article 43 (Reserve for Repayment) |
| (1) | A union shall, as a reserve for repayment, reserve at least 10/100 of the balance of its deposits and installment savings as of the end of the preceding month, as prescribed by Presidential Decree, and shall deposit part of the reserve for repayment with the National Federation in accordance with the percentage and methods prescribed by Presidential Decree. |
| (2) | Matters necessary for the operation of the reserve for repayment deposited with the National Federation under paragraph (1), the disposition of profits accruing from the operation thereof, and other similar matters shall be prescribed by Presidential Decree. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 44 (Operation of Surplus Money) |
A union shall invest and operate its surplus funds in any of the following manners:
| 1. | Deposit with the National Federation; |
| 2. | Deposit with a financial institution specified by Presidential Decree; |
| 3. | Purchase of national bonds, public bonds, or securities of such types and within such limits as prescribed by Presidential Decree. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 45 (Restriction on Possession of Real Estate) |
A union may not possess any real estate, except as necessary for the conduct of its business or inevitable for the recovery of its claims.
[This Article Wholly Amended on Jan. 20, 2015]
| Article 45-2 (Obligations to Take Measures to Protect Customer Service Employees) |
| (1) | A union shall take the following measures to protect the staff members conducting direct customer reception service from verbal abuse, sexual harassment, assault, etc. committed by customers: |
| 1. | Separation of any such staff member from a customer at issue and replacement of him or her with other persons for the service, where the staff member requests to do so; |
| 2. | Supporting medical treatment of and counseling with the relevant employee; |
| 4. | Other measures prescribed by Presidential Decree, such as legal measures necessary for the protection of such staff members. |
| (2) | A staff member conducting direct customer reception service may request a union to take measures referred to in the subparagraphs of paragraph (1). |
| (3) | A union shall not impose any disadvantage on a staff member conducting direct customer reception service on the ground that he or she makes a request under paragraph (2). |
[This Article Newly Inserted on Apr. 18, 2017]
| Article 46 (Business Year) |
The business year of a union shall be prescribed by its articles of association.
[This Article Wholly Amended on Jan. 20, 2015]
| Article 47 (Accounting and Settlement of Accounts) |
| (1) | The accounts of a union shall be classified into general accounts and special accounts, and the business sectors to which the respective accounts above apply shall be prescribed by the articles of association. <Amended on Jan. 20, 2015> |
| (2) | Matters necessary for the accounting standards and the settlement of accounts of a union shall be prescribed by the Financial Services Commission: Provided, That detailed matters therefor, including the titles of accounts and the forms of accounting books may be separately determined by the Chairperson of the National Federation. <Amended on Jan. 20, 2015> |
| (3) | Deleted. <Feb. 1, 1999> |
| (4) | If a union obtains approval for a report on the settlement of accounts at the general meeting after each business year ends, it shall submit such report to the Chairperson of the National Federation within 30 days from the date of approval. <Amended on Jan. 20, 2015> |
| (5) | Where the gross assets amount of a union as of the end of the immediately preceding year is at least the reference amount prescribed by Presidential Decree and the Financial Services Commission deems it necessary to conduct an external audit and inspection for the protection of members of such union and then requests such an audit and inspection, that union shall be subject to audit and inspection by auditors under Article 3 of the Act on External Audit of Stock Companies every year. <Amended on Jan. 20, 2015> |
| (6) | Where a union subject to audit and inspection under paragraph (5) falls under any of the causes prescribed by Presidential Decree, the Chairperson of the National Federation may require the union to replace its auditor with a person nominated by him or her or appoint such a person as its auditor. <Amended on Jan. 20, 2015> |
| (7) | With respect to unions and auditors, the provisions of the former sentence of Article 4 (1), Articles 4 (4) and (5), 4-4, 4-5, 6, 7, 8 (1), 9 through 11, 14, 15-2, 16-2, and 17 through 17-4 of the Act on External Audit of Stock Companies shall apply mutatis mutandis. In such cases, “the Securities and Futures Commission” in Articles 4-4, 4-5, 8 (1), 14, 15-2 and 16-2 of the same Act shall be construed as “the Governor of Financial Supervisory Service,” and “general meeting of shareholders” in Articles 10 and 11 of the same Act shall be construed as “general meeting.” <Amended on Jan. 20, 2015> |
[Title Amended on Jan. 20, 2015]
| Article 48 (Business Plans and Budget) |
A union shall formulate its business plan and budget bill (including cases of compiling a supplementary revised budget) every business year in compliance with the guidelines for business planning and budget compilation established by the Chairperson of the National Federation, and shall pass a resolution thereof by a general meeting: Provided, That the same shall not apply in cases of revision of the business plan or budget due to any unavoidable cause, such as an increase in the amount of interest to be paid.
[This Article Wholly Amended on Jan. 20, 2015]
| Article 49 (Legal Reserve) |
| (1) | A union shall set aside for legal reserve at least 10/100 of its profits of every business year until the amount reaches twice as much as the total amount of its paid-in capital. |
| (2) | A union shall neither use the reserve under paragraph (1) nor appropriate it for the payment of dividends except where the union becomes divided or dissolved. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 50 (Voluntary Reserve) |
A union may set aside for business reserve a portion of its profits as a voluntary reserve every business year.
[This Article Wholly Amended on Jan. 20, 2015]
| Article 51 (Special Reserve) |
A union may accumulate a special reserve every business year as a reserve for the coverage of deficits and the appropriation for damage caused by a force majeure event, such as theft, robbery, and fire, as prescribed by its articles of association.
[This Article Wholly Amended on Jan. 20, 2015]
| Article 52 (Disposal of Losses) |
| (1) | Losses incurred during any business year of a union shall be indemnified by using undivided profits, the special reserve, and the voluntary reserve in the enumerated order, and the amount of any loss remaining after such indemnification, if any, shall be carried forward to the following business year. |
| (2) | Where losses have continued to occur in any union for several business years and there is no amount left in any reserve for covering such losses, the union may reduce its capital after a resolution is passed by the concurring vote of at least 2/3 of its members present at a general meeting, and then with an approval from the Chairperson of the National Federation, resulting in the decrease of paid-in investment money of each union member. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 53 (Disposal of Profits) |
| (1) | A union may not dispose of its profits until its loss has been compensated. |
| (2) | Profits remaining after the reserves under Articles 49 through 51 have been deducted shall be distributed to union members in proportion to their shares in the paid-in capital after resolution by a general meeting. In such cases, the dividends may be distributed simultaneously with the dividends proportionate to respective union members’ actual results of the use of the business of the union, as prescribed by the articles of association. |
[This Article Wholly Amended on Jan. 20, 2015]
SECTION 6 DISSOLUTION, DIVISION, AND MERGER
| (1) | A union shall be dissolve upon the occurrence of any of the following: |
| 1. | Occurrence of grounds for dissolution determined by the articles of incorporation; |
| 2. | Where a resolution for its dissolution is adopted at its general meeting. |
| 3. | Merger or bankruptcy of it; |
| 4. | Revocation of authorization for incorporation. |
| (2) | In cases falling under paragraph (1) 2, a union shall make a report on the cause for dissolution to the National Federation without delay after resolution thereon by a general meeting. |
| (3) | Where a union has dissolved pursuant to paragraph (1), the union shall make a registration of dissolution within fourteen days: Provided, That where a union is merged with any other union, the union surviving the merger shall file for registration of change. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 55 (Merger and Division) |
| (1) | A union may be merged or divided by a resolution of the general meeting. In such cases, Articles 7, 8, 8-2, 9 and 10 and the proviso of Article 25 (1) shall apply mutatis mutandis. |
| (2) | The Government or the National Federation may provide a financial aid, etc. within the budget if deemed necessary to promote a merger of unions. |
| (3) | The union who survives or is newly established after merger or division shall succeed to the common bond, rights, and obligations of the union which ceases to exist after merger or division. |
| (4) | The name of the union ceased to exist after merger stated in the union register or other public register shall be construed as the name of the union which survives or is newly established after merger. <Newly Inserted on Jan. 15, 2019> |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 56 (Supervision over Liquidation Affairs) |
The Chairperson of the National Union shall supervise affairs regarding the liquidation of a union.
[This Article Wholly Amended on Jan. 20, 2015]
| (1) | Where a union is dissolved, the president of the union shall become the liquidator except for bankruptcy: Provided, That the foregoing shall not apply where the Chairperson of the National Federation appoints other liquidator, as prescribed by Presidential Decree. |
| (2) | The liquidator shall, except for cases of bankruptcy, register the following matters at the locations of the principal office and branch offices of the union, respectively, within 14 days from the date he or she takes office. The same shall apply where there occurred a change in any registered matters: |
| 1. | Grounds for dissolution; |
| 2. | The date of dissolution; |
| 3. | The name and address of the liquidator; |
| 4. | The content of restriction, if any, on the liquidators’ power of representation. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 58 (Residual Property after Dissolution) |
A dissolved union shall, where there are any residual liquidation properties after completely discharging its obligations, dispose of them as prescribed by the articles of association.
[This Article Wholly Amended on Jan. 20, 2015]
| Article 59 (Liquidator’s Duties) |
| (1) | The liquidator shall investigate the status of the properties owned by the union without delay after taking his or her office, and shall prepare a list of properties and the statement of financial position for approval of a general meeting. The same shall apply to the report on the settlement of accounts required at the time the affairs relating to the liquidation are completed. |
| (2) | In cases falling under paragraph (1), when a general meeting is not duly formed even after having convened a general meeting twice or more, the approval of the Chairperson of the National Federation shall be deemed as if it were approval of a general meeting. |
| (3) | The liquidator shall not distribute the union’s properties unless and until the union’s obligations are discharged completely or properties equivalent to the amount of such obligations are deposited. |
| (4) | Upon the completing the liquidation affairs, the liquidator shall file for registration of such completion to the location of the office without delay, and shall report it to the Chairperson of the National Federation in detail. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 60 (Application Mutatis Mutandis of the Civil Act) |
[This Article Wholly Amended on Jan. 20, 2015]
CHAPTER III THE FEDERATION
SECTION 1 ESTABLISHMENT AND INVESTMENT
| Article 61 (Establishment) |
| (1) | The National Federation composed of unions shall be established to guide and supervise the business of the unions and promote the enhancement of their common interest and healthy growth. |
| (2) | Articles 7 and 8 shall apply mutatis mutandis to the National Federation. |
[This Article Wholly Amended on Jan. 20, 2015]
All unions shall become members of the National Federation.
[This Article Wholly Amended on Jan. 20, 2015]
| Article 63 (Capital and Investment) |
| (1) | The capital of the National Federation shall amount to the paid-in capital of unions. |
| (2) | Each union shall invest at least one unit of investment. |
| (3) | The amount of one unit of investment and the standard for the payment shall be prescribed by the articles of association of the National Federation, and the liability of a union shall be limited to its paid-in investment money. |
| (4) | The investment money of a union to be paid to the National Federation shall be paid in cash, and shall not be offset against the union’s claims to the National Federation. |
| (5) | A union’s investment equities in the National Federation may be transferred to other union with the approval from the Chairperson of the National Federation. In such cases, the transferee shall succeed to the rights and obligations of the transferor. |
| (6) | Where a union is dissolved, the Chairperson of the National Federation shall refund the investment to the union to reduce the capital by the amount equivalent to the investment equities in the union or permit the dissolving union to transfer its investment equities to another union. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 64 (Matters to Be Stated in the Articles of Incorporation) |
The articles of association of the National Federation shall contain the following descriptions:
| 3. | The location of the principal office; |
| 4. | Matters concerning its businesses and accounting; |
| 5. | Amount of one unit of investment, and methods and time for the payment for the investment; |
| 6. | Matters concerning imposition and collection of membership fee; |
| 7. | Matters concerning the organs and executive officers; |
| 8. | The methods of public announcement; |
| 9. | Other necessary matters. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 65 (Business Area and Office) |
| (1) | The National Federation composed of credit unions shall be only one throughout the country, and it shall cover the whole territory of the nation as its business district. |
| (2) | The National Federation shall establish the principal office as prescribed by the articles of association, and may establish branch offices as necessary. |
| (3) | There may be established councils in branch offices under paragraph (2) to exchange information for the purpose of developing unions and assist the efficient conduct of unions’ business affairs. |
| (4) | Matters concerning the organization and operation of the councils under paragraph (3) and other necessary matters shall be prescribed by the articles of association. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 66 (Membership Fees) |
The National Federation may collect membership fees from unions by a resolution of a general meeting thereof.
[This Article Wholly Amended on Jan. 20, 2015]
Matters concerning the dissolution of the National Federation shall be prescribed by Act.
[This Article Wholly Amended on Jan. 20, 2015]
| Article 68 (General Meetings) |
| (1) | The National Federation shall have the general meeting. |
| (2) | The general meeting shall be composed of the Chairperson of the National Federation and the representatives from the unions, and shall be classified into an annual general meeting and a special general meeting. |
| (3) | An annual general meeting shall be convened by the Chairperson of the National Federation once every year, while a special general meeting shall be convened when the Chairperson of the National Federation considers it necessary or receives a request from the representative of the unions under Article 26 which applies mutatis mutandis pursuant to paragraph (4), as prescribed by the articles of association of the National Federation, and the Chairperson of the National Federation shall take the chair of the meeting. |
| (4) | The main clause of Article 19 (1), the main clause of Article 25 (1), Article 26 (1) through (5), and Article 26-2 shall apply mutatis mutandis to general meetings of the National Federation. In such cases, the term "auditor" in Article 26 shall be construed as the "representative of the Audit Committee under Article 76 (3)". |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 69 (Resolutions by General Meeting) |
| (1) | The following matters shall be subject to resolution of a general meeting, except as otherwise provided in this Act: |
| 1. | Amendments to the articles of incorporation; |
| 2. | Establishment, amendment, and repeal of the bylaws; |
| 3. | Method for imposing the membership fee and determination on the amount thereof; |
| 4. | Approval of the business plans, budgets, and reports on the settlement of accounts; |
| 5. | Approval of audit reports; |
| 6. | Matters concerning the appointment and dismissal of executive officers; |
| 7. | Other matters brought up to a general meeting by a resolution of the board of directors or with the consent of at least 1/5 of all the unions. |
| (2) | An amendment to the articles of association under paragraph (1) 1 shall be registered without delay after obtaining approval from the Financial Services Commission. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 70 (Board of Representatives) |
| (1) | The National Federation shall have the board of delegates, which may substitute a general meeting. |
| (2) | Matters subject to resolution of a general meeting may be resolved by the board of delegates. In such cases, such resolution shall be deemed to substitute the resolution of a general meeting. |
| (3) | The board of delegates shall be composed of the Chairperson of the National Federation and delegates. |
| (4) | The full number of delegates shall be no more than 200 persons, and they shall be elected from among the representatives of unions, as prescribed by the articles of association. |
| (5) | The term of office of delegates shall be four years, and the term of office of a delegate who is elected by a by-election shall be the remainder of his or her predecessor’s term of office. |
| (6) | The provisions concerning the general meeting shall apply mutatis mutandis to the board of delegates, but the right to resolution or right to vote of a delegate shall not be exercised by proxy. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 71 (Full Number of Executive Officers) |
| (1) | The National Federation shall have at least 15, but up to 25 directors as executive officers, including one Chairperson, one representative director for credit and mutual aid business, and one director for inspection and supervision. |
| (2) | From among directors under paragraph (1), the Chairperson, the representative director for credit and mutual aid services, and the director for inspection and supervision shall be full-time executive officers. |
| (3) | Executive officers other than full-time executive officers under paragraph (2) shall be part-time, but may be entitled to reimbursement for actual expenses as prescribed by the articles of association. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 71-2 (Appointment of and Qualification Requirements for Executive Officers) |
| (1) | The executive officers shall be elected at a general meeting as prescribed by the articles of association, and at least 1/3 of the executive officers, including the representative director for credit and mutual aid business and the director for inspection and supervision shall be elected from among the persons who are neither an executive officer nor an officer of a union. <Amended on Jan. 20, 2015> |
| (2) | The Chairperson of the National Federation shall be a member of a union. |
| (3) | The representative director for credit and mutual aid business, the director for inspection and supervision, and the directors who are neither executive officers nor officers of unions (hereinafter referred to as "professional directors") shall be elected from among persons who have expertise and experience in the area of finance and meet the requirements prescribed by Presidential Decree. <Amended on Jan. 20, 2015> |
| (4) | A president of any union shall, where being elected to the Chairperson of the National Federation, shall resign from the current office of president before taking the office of Chairperson. |
| (5) | Matters concerning the method, etc. for electing executive officers shall, be prescribed by the articles of association unless there exists any relevant provision in this Act. |
| (6) | The provision of Article 28 shall apply mutatis mutandis to the executive officers of the National Federation. |
[This Article Newly Inserted on Jul. 30, 2003]
| Article 71-3 (Personnel Recommendation Committee) |
| (1) | The Personnel Recommendation Committee shall be established under the National Federation to recommend professional directors under Article 71-2 (3). |
| (2) | The Personnel Recommendation Committee shall be comprised as follows, and the Chairperson shall be elected by and from among members thereof: |
| 1. | Two professional directors (excluding persons registered as applicants for candidates for a professional director position), and two union presidents, who are members of the unions commissioned by the board of directors; |
| 2. | Three persons commissioned by the board of directors from among external experts (excluding public officials) who have extensive knowledge on and experience in finance or law. |
| (3) | Other matters necessary for the composition and operation of the Personnel Recommendation Committee shall be prescribed by the articles of association. |
[This Article Newly Inserted on Jan. 20, 2015]
| Article 72 (Executive Officers' Duties and Terms) |
| (1) | The Chairperson of the National Federation shall represent the National Federation, and shall have overall control over the affairs thereof: Provided, That the same shall not apply to the affairs under the exclusive control of the representative director for credit and mutual aid business under paragraph (2). |
| (2) | The representative director for credit and mutual aid business shall be in exclusive charge of dealing with the following matters, and shall represent the National Federation with respect to such affairs: |
| 1. | Business activities relating to the credit and mutual aid business and business activities incidental thereto, among businesses specified in Article 78 (1) 5 and 6 and businesses specified in subparagraph 7 through 9 of said paragraph; |
| 2. | The establishment of business goals, business plan, and financing plan for business affairs under his or her charge referred to in subparagraph 1. |
| (3) | The representative director for credit and mutual aid business shall perform his or her duties relating to the business affairs under his or her charge faithfully with fidelity as a professional business-person, and shall report to the board of directors and the general meeting the results of such management evaluations conducted as prescribed by the articles of association. |
| (4) | The director for inspection and supervision shall be in exclusive charge of dealing with the affairs relating to inspection and supervision over the unions under Article 78 (1) 3, while the Chairperson of the National Federation shall take appropriate measures, such as delegation of authority, so that the director for inspection and supervision may conduct the business affairs under his or her charge independently. |
| (5) | The Chairperson of the National Federation may request a general meeting to dismiss the representative director for credit and mutual aid business, where it is deemed as a result of the management evaluation under paragraph (3) that it is impracticable for the representative director for credit and mutual aid business to perform his or her duties due to the poor management performance, or where the representative director has committed an act of violating this Act or the Act on the Protection of Financial Consumers (hereinafter referred to as "this Act, etc."), an order issued under this Act, etc., the articles of association or bylaw of the National Federation. <Amended on Mar. 24, 2020> |
| (6) | Where the Chairperson of the National Federation is unable to perform his or her duty due to any unavoidable reason, one of executive officers shall act on his or her behalf in the order provided in the articles of association. |
| (7) | The term of office of executive officers shall be four years but may be renewed consecutively: Provided, That the Chairperson of the National Federation may serve only one consecutive term. |
| (8) | Articles 27-2, 27-3, 31 (2), and 33 shall apply mutatis mutandis to executive officers of the National Federation. <Amended on Jan. 15, 2019> |
[This Article Wholly Amended on Jan. 20, 2015]
The Employees shall be appointed and dismissed by the Chairperson of the National Federation: Provided, That in cases of the employees who are engaged in the business affairs under the jurisdiction the representative director for credit and mutual aid business under Article 72 (2), the Chairperson of the National Federation shall appoint and dismiss them after consultation with the representative director for credit and mutual aid business. [This Article Wholly Amended on Jan. 20, 2015]
| Article 74 (Board of Directors) |
| (1) | There shall be established the board of directors in the National Federation. |
| (2) | The board of directors shall be composed of directors and the meetings thereof shall be convened by the Chairperson of the National Federation as prescribed by the articles of association, and the Chairperson of the National Federation shall take the chair of the meeting of the board of directors. |
| (3) | The Chairperson of the National Federation shall, upon the request of at least five directors, convene a meeting of the board of directors without delay. |
| (4) | The National Federation may establish a committee composed of at least three directors under the board of directors for deliberation on specialized matters, such as credit business, as prescribed by the articles of association. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 75 (Matters subject to Resolution of the Board of Directors) |
| (1) | The following matters shall undergo resolution by the board of directors: |
| 1. | Establishment, amendment, and repeal of the standard articles of association of unions; |
| 2. | Establishment, amendment, and repeal of the standard by-laws of unions; |
| 3. | Establishment, amendment, and repeal of by-laws; |
| 4. | Acquisition and disposition of fundamental properties; |
| 5. | Maximum limit of loans; |
| 6. | Matters delegated by the general meeting and matters to be brought up before the general meeting; |
| 7. | Matters deemed necessary by the Chairperson of the National Federation or at least 1/3 of directors; |
| 8. | Important matters which do not belong to such authority of the general meeting as provided in statutes and regulations or in the articles of association. |
| (2) | Where it is deemed that any provision of the standard articles of association or the standard by-laws is unlawful or hinders the sound management of unions, the Financial Services Commission may demand the board of directors to revise the standard articles of association or the standard by-laws. In such cases, the board of directors shall comply with such demand. |
| (3) | Article 34 (3) and Article 36 (2) and (3) shall apply mutatis mutandis to the board of directors of the National Federation. |
| (4) | The board of directors shall supervise the execution by the full-time executive officers of business affairs regarding those matters resolved pursuant to paragraph (1), and may demand the full-time executive officers to report necessary matters to it. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 76 (Audit Committee) |
| (1) | The National Federation shall establish a committee within the board of directors to audit and inspect the business execution, accounting, etc. of the National Federation (hereinafter referred to as the "Audit Committee"). |
| (2) | The Audit Committee shall be composed of at least three directors, while at least 2/3 of its all members shall be professional directors. |
| (3) | The Audit Committee shall, by a resolution, select the person who represents the Audit Committee. |
| (4) | Where the composition of the Audit Committee fails to meet the requirements under paragraph (2) due to resignation or death of any member thereof, or any other cause, the general meeting which is initially convened after the occurrence of such cause shall make the composition of the Audit Committee meet the requirements under paragraph (2). |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 76-2 (Audit Committee's Mission) |
| (1) | The Audit Committee shall audit and inspect the business affairs, the status of assets, accounting books and documents of the National Federation at least once every quarter of a year after giving notice of the audit and inspection, and shall submit a quarterly audit and inspection report to the board of directors and an annual audit and inspection report, in which the quarterly reports are integrated, to the regular general meeting or the regular board of delegates. |
| (2) | The provisions of Article 26 (2) through (5) and Article 38 of this Act and Articles 391-2 (2), 402, 412, 412-2, 413, 413-2, 414, 447-3, 447-4, and 450 of the Commercial Act shall apply mutatis mutandis to the Audit Committee. In such cases, the term "auditor" in Article 26 (2) through (5) shall be construed as the "representative of the Audit Committee," the term "auditor" in Articles 413-2, 414, and 450 of the Commercial Act" as the "member of the Audit Committee," and the term "auditor" in other provisions as the "Audit Committee". |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 76-3 (Internal Control Standards) |
| (1) | The National Federation shall observe statutes and regulations, and establish basic procedures and standards (hereinafter referred to as "internal control standards") to be followed by its executive officers and employees when they perform their duties. |
| (2) | The National Federation shall inspect whether its internal control standards are observed, and appoint at least one person (hereinafter referred to as the “compliance officer”) assigned to investigate any violation of the internal control standards and report the results of such investigation to the Audit Committee. |
| (3) | The Chairperson of the National Federation shall, where intending to appoint or dismiss the compliance officer, refer it to the board of directors for resolution. |
| (4) | The compliance officer shall meet the following requirements for qualification: |
| 1. | He or she shall be a person who has any of the following career experiences: |
| (a) | A person who has a career of at least 10 years working for the Bank of Korea or an institution subject to inspection pursuant to Article 38 of the Act on the Establishment of Financial Services Commission (including any foreign financial institution equivalent thereto); |
| (b) | A person who holds a master's or higher degree in finance-related fields and has a career of at least five years working as a researcher at a research institute or in a position equal to or higher than an assistant professor at a university or college; |
| (c) | A person who holds qualification as an attorney-at-law or certified public accountant and has a career of engaging in business related to such qualification for at least five years; |
| (d) | A person who worked at the Ministry of Economy and Finance, the Financial Services Commission, the Securities and Futures Commission, or the Financial Supervisory Service for at least five years, and five years have elapsed since his or her resignation or retirement therefrom; |
| 2. | A person who does not fall under any subparagraph of Article 28 (1); |
| 3. | A person who has no record of receiving a disposition equivalent to a demand for caution or warning from the Financial Services Commission or the Governor of the Financial Supervisory Service for violating finance-related statutes and regulations in recent five years. |
| (5) | Matters necessary for the internal control standards and the compliance officer shall be prescribed by Presidential Decree. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 76-4 (Appointment of Agent) |
The Chairperson of the National Federation or the representative director for credit and mutual aid business may appoint from among the director for inspection and supervision or employees an agent who has competence to conduct all judicial or extrajudicial acts on behalf of him or her in connection with the business affairs of the National Federation, as prescribed by the articles of association.
[This Article Wholly Amended on Jan. 20, 2015]
| Article 77 (Training Center) |
| (1) | The National Federation may establish a training center. |
| (2) | Matters necessary for the establishment and organization of the training center shall be prescribed by the articles of association. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 78 (Categories of Business) |
| (1) | The National Federation shall conduct the following business in order to achieve its purpose: |
| 1. | Guidance, coordination, survey and research, and publicity relating to the business of unions; |
| 2. | Educational projects for the union members and the executive officers and employees of unions; |
| 3. | Inspection and supervision over unions; |
| 4. | Supports to the business of unions; |
| (a) | Receipt and management of surplus funds, reserve for repayment, etc. deposited by unions; |
| (b) | Lending funds to unions; |
| (c) | Domestic and foreign exchange affairs for unions and their members; |
| (d) | Execution by proxy of the affairs of the State, a public organization or a financial institution; |
| (e) | Payment guarantee and bill discount for unions; |
| 6. | Mutual aid business for unions and the members thereof; |
| 7. | Business entrusted or subsidized by the State or a public organization; |
| 8. | Businesses incidental to the businesses under subparagraph 1 through 7; |
| 9. | Other businesses necessary for the achievement of its purpose. |
| (2) | The National Federation may borrow funds for conducting its business under paragraph (1). |
| (3) | The National Federation may invest in any other corporation if necessary for conducting the businesses under paragraph (1). |
| (4) | Where a member of any union use the business of the National Federation, it shall be deemed that such business is used by that union. |
| (5) | Where the National Federation intends to borrow funds under paragraph (2) or (3) (excluding the cases prescribed by Presidential Decree, considering the purpose, size, etc. of loan) or invest funds (excluding the cases prescribed by Presidential Decree, considering the purpose, size, etc. of investment), it shall obtain approval from the Financial Services Commission in advance. |
| (6) | With respect to the surplus funds deposited by any union, which is managed by the National Federation pursuant to paragraph (1) 5 (a), the National Federation may pay interest thereon to the union or distribute profits on the basis of the earnings accruing from such fund management. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 78-2 (Use of Business Service of Person Other Than Unions) |
| (1) | The National Federation may permit a person who is not a union to use the business service under Article 78 (1) 5 (b) or subparagraph 6 of the said paragraph. In such cases, the terms "unions" in Article 78 (1) 5 (b) and "unions and the members thereof" shall be construed as "persons other than unions". |
| (2) | Where the National Federation lends a loan under paragraph (1), the scope and size of the loan, the loan limit to the same person, and other matters shall be prescribed by Presidential Decree. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 79 (Operation of Funds) |
| (1) | The National Federation shall operate, in any of the following manners, such funds as surplus funds or reserve for repayment deposited by unions under Article 78 (1) 5 (a): |
| 1. | Lending loans to unions; |
| 2. | Purchase of national bonds, public bonds, corporate bonds, and other securities; |
| 3. | Deposit with a financial institution specified by Presidential Decree; |
| 4. | Other ways prescribed by Presidential Decree. |
| (2) | The classes and limit of securities that the National Federation may purchase under paragraph (1) 2 shall be prescribed by Presidential Decree. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 80 (Establishment of Personnel Management Committee) |
| (1) | The National Federation may establish the Personnel Management Committee for personnel exchange, etc. among unions. |
| (2) | Matters concerning the organization and management of the Personnel Management Committee shall be prescribed by the by-law of the National Federation. |
[This Article Wholly Amended on Jan. 20, 2015]
SECTION 4 CREDIT UNION DEPOSITORS PROTECTION FUND
| Article 80-2 (Establishment of Credit Union Depositors Protection Fund) |
| (1) | The National Federation shall establish and manage the Credit Union Depositors Protection Fund (hereinafter referred to as the "Fund") at the National Federation in order to guarantee the refund of deposits and installment savings paid by union members (including non-union members under Article 40; hereafter referred to as “the members, etc. of the union” in this Section), and special deposits, etc. to clear cashier’s checks of the National Federation (hereinafter referred to “deposits, etc.”) up to the amount prescribed by Presidential Decree and promote the healthy growth of unions. |
| (2) | Unions and the National Federation shall join the Fund under paragraph (1). |
| (3) | The National Federation shall establish the Fund Management Committee for deliberation and decision-making on important matters concerning the management of the Fund. |
| (4) | The National Federation shall pay deposits, etc. under paragraph (1) in subrogation of a union or other accounts of the National Federation upon request by members, etc. of the union as prescribed by Presidential Decree if the union or other such accounts is unable to pay such deposits, etc. to the members, etc. of the union. <Amended on Jan. 15, 2019> |
| (5) | Matters necessary for the organization, management, etc. of the Fund Management Committee under paragraph (3) shall be prescribed by Presidential Decree. |
| (6) | A claim for repayment by the union, etc. in paragraph (4) shall be extinguished upon completion of prescription unless it is exercised within five years from the commencement date to pay the repayment. <Newly Inserted on Jan. 15, 2019> |
| (7) | No notice or notification, etc. sent by unions and the National Federation to any depositor, etc. to demand the exercise of the claim for repayment has the effect of interrupting extinctive prescription, notwithstanding paragraph (6) of this Act and subparagraph 3 of Article 168 of the Civil Act. <Newly Inserted on Jan. 15, 2019> |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 80-3 (Raising and Management of the Fund) |
| (1) | The Fund shall be raised from the following sources: <Amended on Jan. 15, 2019> |
| 1. | Contributions paid by unions; |
| 2. | Funds contributed, transferred, and borrowed from other accounts of the National Federation; |
| 3. | Loans borrowed from the Government, Bank of Korea defined in the Bank of Korea Act, or financial institution; |
| 4. | Gains accrued from management of the Fund; |
| (2) | Matters necessary for the raising and management of the Fund under each subparagraph of paragraph (1) shall be prescribed by Presidential Decree. |
| (3) | Any union and other accounts of the National Federation may not claim the refund of the contributions paid in accordance with paragraph (1) 1 and 2. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 80-4 (Acquisition of Claims) |
| (1) | The National Federation shall, if it pays by subrogation under Article 80-2 (4), acquire the rights held by the members, etc. of the union within the extent of the amount paid. |
| (2) | The National Federation may, on behalf of the members, etc. of the union, set off the claims held by such members, etc. for deposits, installment savings, etc. (excluding the claims put as security for the members themselves or others) against their obligations (excluding obligations of surety), as of the public announcement date of the payment. |
| (3) | The National Federation may withhold the payment for the amount prescribed by Presidential Decree for obligations of surety owed by the members, etc. to the union, notwithstanding Article 80-2 (4). |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 80-5 (Exercise of Right to Claim Compensation for Damage) |
| (1) | In any of the following cases, the National Federation may demand the relevant union (including its corporation in liquidation, bankruptcy estate, or union which survives after merger; hereafter the same shall apply in paragraphs (3) through (6)) to claim compensation for damage against any such executive officer or employee, former or incumbent, of the union, any such person who falls under any of subparagraphs of Article 401-2 (1) of the Commercial Act, or any such third party, as are deemed responsible for the insolvency of the union (hereinafter referred to as a “person involved in insolvency”): |
| 1. | Where having provided a financial aid to facilitate a merger of unions (limited to a merger for normalizing management of any relevant union) pursuant to Article 55 (2); |
| 2. | Where having made a payment by subrogation pursuant to Article 80-2 (4); |
| 3. | Where having provided a financial aid to the acquiring union pursuant to Article 86-4 (3); |
| 4. | Where having provided a financial aid for normalizing the management of a union, based on a determination of the Fund Management Committee under Article 80-2 (3). |
| (2) | The demand of the National Federation under paragraph (1) shall be made in writing, specifying the grounds for claim, claim methods, and a period of claim for compensation. |
| (3) | If the union fails to comply with the demand of the National Federation under paragraph (1), it may claim compensation for damage in subrogation of the union immediately. |
| (4) | Where the union has filed a lawsuit for claiming compensation for damage under paragraph (1), the National Federation may participate in the action to assist the said union while the lawsuit is pending at a court. In such cases, Articles 71 through 77 of the Civil Procedure Act shall apply mutatis mutandis. |
| (5) | The National Federation may conduct an investigation into the status of the affairs and assets of the relevant union, if necessary for making a demand for compensation for damage, exercising the right of subrogation to claim compensation for damage, or participating in a lawsuit pursuant to paragraphs (1) through (4). |
| (6) | Where the National Federation wins a lawsuit by exercising the right of subrogation to claim compensation for damage pursuant to paragraph (3) or participates in a lawsuit pursuant to paragraph (4) at the request of the union, any expenses accruing therefrom shall be borne by that union. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 80-6 (Requests for Provision of Materials) |
| (1) | If necessary for the National Federation to either claim compensation for damage against a person involved in insolvency or participate in a lawsuit against such person, the Financial Services Commission may request the head of, a relevant central administrative agency, a local government, or any other public institution prescribed by Presidential Decree (hereafter referred to as a “public institution” in this Article) to provide materials or information concerning property of the person involved in insolvency. In such cases, the head of a public institution shall comply with such request unless there exists any special cause not to do so. |
| (2) | The Financial Services Commission may provide the National Federation with information prescribed by the head of a public institution pursuant to paragraph (1), so the National Federation may make full use of such information in claiming compensation for damage or participating in a lawsuit. |
[This Article Newly Inserted on Jan. 20, 2015]
| Article 80-7 (Setting Target Amount of Reserves) |
| (1) | The National Federation shall set the target amount of reserves of the fund (hereafter in this Article referred to as “target amount of reserves”) of the fund to allow the reserve of the fund to keep an appropriate level. |
| (2) | The target amount of reserves shall be set upon resolution of the Fund Management Committee taking into account the union's management and financial conditions, etc. to the extent not to hinder the effective operation of the fund. In such cases, the target amount of reserves may be set by designating the upper and lowest limits of reserves. |
| (3) | The National Federation shall regularly examine the appropriateness of the size of the target amount of reserves in consideration of the business environment for the union and stability of the fund; and if necessary, it may reset the target amount of reserves upon resolution of the Fund Management Committee. |
| (4) | If the reserves of the fund reach the target amount, the National Federation shall reduce or exempt the contributions made by the union as prescribed by Presidential Decree in consideration of the amount of the revenues and expenditures of the fund. |
[This Article Newly Inserted on Jan. 15, 2019]
| Article 81 (Business Budget and Settlement of Accounts) |
| (1) | The National Federation shall formulate a business plan and a budget statement every business year to obtain approval by a resolution of a general meeting. |
| (3) | The National Federation shall submit a report on the settlement of accounts for each business year, an audit and inspection report of the Audit Committee, and an audit and inspection report of an external auditor to a regular general meeting for approval within three months after the end of the corresponding business year. |
| (4) | The National Federation shall submit the report on the settlement of accounts and audit and inspection reports for which approvals under paragraph (3) are granted to the Financial Services Commission within two weeks after the closing of its regular general meeting. |
| (5) | The provisions of Articles 46, 47 (1) and (2), 49 through 51, 52 (1), and 53 shall apply mutatis mutandis to the National Federation. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 82 (Reduction of Amount of Investment) |
The National Federation may reduce the amount of its capital by a resolution of a general meeting where it continuously suffers deficits during several business years and there is no reserve available for compensating such deficits.
[This Article Wholly Amended on Jan. 20, 2015]
| Article 83 (Supervision by the Financial Services Commission) |
| (1) | The Financial Services Commission shall supervise the business affairs of unions and the National Federation and may issue an order necessary for supervision. |
| (2) | The Governor of the Financial Supervisory Service may assign an employee belonging thereto to conduct an inspection of the business affairs or properties of unions or the National Federation. |
| (3) | If deemed necessary for the inspection under paragraph (2), the Governor of the Financial Supervisory Service may demand a union or the National Federation to make a report relating to its business affairs or properties and to require any relevant person to appear before the Service to present his or her opinions. |
| (4) | Any person who conducts the inspection under paragraph (2) shall present a certificate indicating his or her authority to relevant persons. |
| (5) | A union or the National Federation which receives the inspection of the Financial Supervisory Service shall reimburse the charge allotted to appropriate expenses incurred for such inspection to the Financial Supervisory Service. |
| (6) | Necessary matters concerning the rate and limit of the allotted charge, and the reimbursement therefor under paragraph (5) shall be prescribed by Presidential Decree. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 83-2 (Public Notice of Business Management) |
A union shall publicly notify the important information and data concerning its business management status as prescribed by the Financial Services Commission.
[This Article Wholly Amended on Jan. 20, 2015]
| Article 83-3 (Standards for Management Soundness) |
| (1) | Each union and the National Federation shall comply with such standards for management soundness concerning the following matters as established by the Financial Services Commission pursuant to the provisions of Presidential Decree to maintain the soundness of management and prevent financial accidents: |
| 1. | Matters concerning the soundness of financial structure; |
| 2. | Matters relating to the soundness of assets; |
| 3. | Matters concerning the accounting and settlement of accounts; |
| 4. | Matters concerning risk management; |
| 5. | Other matters necessary for securing management soundness. |
| (2) | Where the Financial Services Commission deems that the management soundness of the National Federation is likely to be severely impaired because of its failure in meeting the standards for management soundness under paragraph (1) or any other cause, it may order the National Federation to take measures, such as increase of capital and reduction in held assets, for improving its business conditions. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 83-4 (Submission of Business Report) |
| (1) | Each union shall submit a report specifying the details of business affairs in each month in the form prescribed by the Governor of the Financial Supervisory Service to the Chairperson of the National Federation by the end of next month. |
| (2) | The report under paragraph (1) shall be signed and sealed by the representative and the officer in charge thereof or its agent. |
| (3) | Paragraphs (1) and (2) shall apply mutatis mutandis to the National Federation. In such cases, the term the "Chairperson of the National Federation" in paragraph (1) shall be construed as the "Governor of the Financial Supervisory Service". |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 83-5 (Openness in Management) |
| (1) | The president of a union shall keep the articles of association, minutes of general meetings, minutes of the board of directors, a list of union members, and reports on the settlement of accounts at the principal office: Provided, That a report on settlement of accounts shall be made available by no later than one week before a regular general meeting is held. |
| (2) | Any union member or creditor of a union may inspect minutes of the board of directors (limited to a union member) and other documents specified in paragraph (1) or may request to deliver copies of such documents at any time during business hours. In such cases, he, she or it shall pay fees prescribed by the union therefor. |
| (3) | Union members may, with consent from at least 100 members or at least 3/100 of all the members, make a request for an inspection of or a request for delivery of a copy of any accounting books or documents of the union. |
| (4) | A union shall not reject a request made pursuant to paragraph (3) unless there exists any special reason not to do so, and shall, where intending to reject it, notify the requesting union members of the reasons therefor in writing. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 84 (Administrative Dispositions against Executive Officers and Employees) |
| (1) | Where an executive officer or employee of a union or the National Federation fails to comply with procedures or duties provided by this Act, an order issued under this Act, or the articles of association or by-law referred to in this Act, the Financial Services Commission may require the union or the National Federation to take any of the following measures against the said executive officer or employee: |
| 1. | Replacement, suspension of performance of duties, or reprimand, in case of an executive officer; |
| 2. | Disciplinary dismissal, suspension from office, salary reduction, or reprimand, in case of an employee; |
| 3. | Caution or warning, in case of an executive officer or an employee. |
| (2) | Where a union or the National Federation is required to take a measure of replacement or disciplinary dismissal against an executive officer or employee pursuant to paragraph (1) and Article 89 (7) 1, the executive officer or employee concerned shall be subject to the suspension from office from the date such request is made until the measure against him or her is determined. |
| (3) | Where there is no executive officer who can execute the business affairs of a union or the National Federation, the Financial Services Commission may appoint an ad hoc executive officer. |
| (4) | Where an ad hoc executive officer is appointed pursuant to paragraph (3), the union or the National Federation shall register the appointment without delay: Provided, That the Financial Services Commission may request the registration office having jurisdiction over the location of the principal office of the union or the National Federation to register it where the union or the National Federation neglects to register the appointment. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 84-2 (Notice of Measures Taken against Retired Executive Officers) |
| (1) | Where it is deemed that any executive officer or employee retired or resigned from a union or the National Federation would been subject to a measure falling under any of the subparagraphs of Article 84 (1) if he or she were in office, the Financial Services Commission (including the Governor of the Financial Supervisory Service and the Chairperson of the National Federation, who are entrusted with the authority to take any measure falling under any or the subparagraphs of Article 84 (1) pursuant to Article 96), shall notify the union or the National Federation of the details of such measure. |
| (2) | Upon receipt of the notice given under paragraph (1), a union or the National Federation shall notify the executive officer or employee concerned thereof and shall keep the records of the fact. |
[This Article Newly Inserted on Dec. 11, 2012]
| Article 85 (Administrative Dispositions against Union) |
| (1) | Where it is deemed that the sound operation of a union or the National Federation is likely to be impaired because of its failure to comply with this Act or an order under this Act or where a union or the National Federation falls under cases prescribed by Presidential Decree (limited to measures falling under subparagraph 3) from among the cases stipulated in Article 51 (1) 4 or 5 or paragraph (2), with the exception of the subparagraphs, of the same Article, the Financial Services Commission may take any of the following measures: <Amended on Mar. 24, 2020> |
| 1. | Caution or warning to the union or the National Federation; |
| 2. | Issuing an order to correct such a violation; |
| 3. | Suspending its business partially for a prescribed period of not more than six months. |
| (2) | The Financial Services Commission may order to fully suspend the business of a union within a fixed period not exceeding six months or revoke the authorization of its establishment where the union falls under any of the following: <Amended on Mar. 24, 2020> |
| 1. | Where it is discovered that the social cooperative has obtained authorization for establishment by fraud or other improper means; |
| 2. | Where it has violated the content or condition of the authorization; |
| 3. | Where it has continued to conduct its business during the period of suspension of business; |
| 4. | Where it fails to comply with a corrective order under paragraph (1) 2; |
| 5. | Where the number of its members fails to reach 100 persons continuously for one year or longer; |
| 6. | Where the aggregate amount of investments in the union fails to reach the amount prescribed by category under the subparagraphs of Article 14 (4) continuously for one year or longer; |
| 7. | Where it fails to conduct its business continuously for one year or longer without good cause; |
| 8. | Where it fails to file for registration of its establishment pursuant to Article 4 within six months after the authorization of establishment is given; |
| (3) | Where intending to either order the suspension of the entire business of a union or revoke the authorization of establishment of a union pursuant to paragraph (2), the Financial Services Commission shall hear the opinion of the Chairperson of the National Federation. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 86 (Management under Administratorship) |
| (1) | The Financial Services Commission may appoint an administrator to administer the business of a union if the union falls under any of the following subparagraphs and is likely to cause serious damage to its members' interest: <Amended on Jan. 20, 2015> |
| 1. | Where it is deemed, as a result of the inspection conducted under Article 83 (2), that the equity capital of the union is likely to be impaired completely because it has illegal or non-performing loans as prescribed by Presidential Decree, but it is difficult for it to recover them within a short period in a normal way; |
| 2. | Where it is deemed difficult for the union to promote to normalize its business by its own efforts due to a loss of its assets caused by an illegal or unjust conduct of its executive officers or employees; |
| 3. | Where there is a rush of demands for withdrawal of the deposits and installment savings in the union, or where the union is in a condition of insolvency because of a significant danger of bankruptcy or the illegal or unjust conduct of its executive officers or employees; |
| 4. | Where, as a result of the inspection under Article 83 (2), the union falls within the criteria as prescribed by Presidential Decree in consideration of the appropriateness of capital, the soundness of sets, etc. even though it does not falls under any of subparagraphs 1 through 3; |
| 5. | Where, as a result of the analysis and evaluation of business performance of the union or the inspection conducted under Article 89 (3) and (6), the Chairperson of the National Federation deems that it is necessary to administer the business of the union, and recommends such administration; in such cases, the Financial Services Commission shall verify whether it falls under any of subparagraphs 1 through 4. |
| (2) | When the administration of business under paragraph (1) commences, the Financial Services Commission shall suspend the payment for obligations or suspend the performance of executive officers' duties for a period not exceeding six months, and shall require the administrator to inspect the current status of assets of the union (hereinafter referred to as "asset inspection") without delay. <Amended on Jan. 20, 2015> |
| (3) | Deleted. <Jan. 28, 2000> |
| (4) | The Financial Services Commission may request the head of a central administrative agency to provide the data necessary for the measures under Article 86-2. In such cases, the head of the central administrative agency who receives such request shall comply with such request unless there is any special reason not to do so. <Amended on Jan. 20, 2015> |
| (5) | The Financial Services Commission may revoke the suspension under paragraph (2) in whole or in part where there is any ground as prescribed by Presidential Decree, including where the normalization of its management is possible. <Amended on Jan. 20, 2015> |
| (6) | Where a union becomes subject to the administration of its business pursuant to paragraph (1), it shall publicly announce the substance of the outline of such administration without delay as prescribed by Presidential Decree. <Amended on Jan. 20, 2015> |
| (7) | Matters necessary for the administration of business; the methods, period and procedures of the suspension of payments for obligations; the suspension of performance of executive officers' duties, etc. under paragraphs (1) and (2), shall be prescribed by Presidential Decree. <Amended on Jan. 20, 2015> |
[Title Amended on Jan. 20, 2015]
| Article 86-2 (Qualification and Authority of Administrator) |
| (1) | No person who has any such interest in a union or any such special relationship therewith as prescribed by Presidential Decree shall be appointed as the administrator of the union under Article 86 (1) or 86-4 (5) (hereafter in this Article referred to as the "administrator"). |
| (2) | The administrator shall, in accordance with the purpose of the appointment, have authority to execute the business affairs of the union subject to the administration of management and to manage and dispose of its assets, liabilities, etc. within the scope of the business affairs relating to the management and disposal of its assets or a decision on the transfer of its contract. In such cases, the administrator may not assert his or her authority against a third party in conducting a legal act, such as disposal of assets of the union unless he or she completes the registration under Article 86-3 or 86-4 (6). |
| (3) | The administrator shall investigate the assets of executive officers or employees (including former executive officers or employees) who are deemed liable for illegal or non-performing loans or debtors, and shall, if necessary for securing the claims for the illegal or non-performing loan, take necessary measures, including an application for provisional seizure. |
| (4) | The Financial Services Commission may dismiss an administrator if deemed necessary. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 86-3 (Notification and Registration of Administration of Business) |
| (1) | Where the administration of management commences pursuant to Article 86, the Financial Services Commission shall, without delay, notify the district court having jurisdiction over the location of the principal office of the union subject to the administration of management of its purport, and shall request the registration office having jurisdiction over the location of the principal office of the union and those having jurisdiction over the branch office thereof to register the administration of management, respectively. |
| (2) | Upon receiving such request under paragraph (1), the relevant registration office shall register the administration of management without delay. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 86-4 (Decision on Transfer of Contracts) |
| (1) | Where a union falls under any of the subparagraphs of Article 86 (1), the Financial Services Commission may decide to transfer the contracts (hereinafter referred to as the "transfer of contracts") relating to the business of the union concerned (hereinafter referred to as the "insolvent union") after hearing the opinion of the Fund Management Committee under Article 80-2 (3). |
| (2) | In making a decision on the transfer of contracts under paragraph (1), the Financial Services Commission shall, within the necessary extent, determine the scope, terms, and conditions of contracts to be transferred, and the union to whom the contracts is transferred (hereinafter referred to as the "transferee-union"). In such cases, the Commission shall obtain the consent of the transferee-union in advance. |
| (3) | The National Federation may propose to the transferee-union the amount, conditions, etc. of its financial aid on the premise that the transfer of contracts will be realized. |
| (4) | Where the transferee-union convenes a general meeting to give a consent under the latter part of paragraph (2), the National Federation shall notify the members of the transferee-union in advance of the matters relating to the relevant resolution of the general meeting, such as the degree of insolvency of the insolvent union and the measures to be taken in relation to the transfer of contracts. |
| (5) | The Financial Services Commission shall appoint an administrator for the insolvent union which has made a decision on the transfer of contracts pursuant to paragraph (1). |
| (6) | Where the Financial Services Commission appoints an administrator under paragraph (5), it shall notify the district court having jurisdiction over the location of the principal office of the insolvent union of the purport of its appointment without delay, and shall request the registration office having jurisdiction over the location of the principal office of the union or a branch office thereof to register the appointment. |
| (7) | The transfer of contracts on the basis of the decision to that effect under paragraph (1) does not require a resolution of the board of directors or the general meeting of the insolvent union. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 86-5 (Effect of the Decision on Transfer of Contracts) |
| (1) | Where a decision is made to transfer contracts to another union under Article 86-4 (1), the transferee-union shall succeed to the rights, obligations, and common bond of the insolvent union, as included in the content of the decision, when the decision is made. |
| (2) | Where a decision is made to transfer contracts to other union under Article 86-4 (1), the insolvent union and the transferee-union shall jointly make a public announcement of the outline of the decision and the fact of the transfer of contracts in at least two daily newspapers without delay. |
| (3) | When a public announcement is made under paragraph (2), the transferee-union shall succeed to the insolvent union’s legal relations with the creditors, debtors, and guarantors who have pledged their property and other interested parties who have interests in the transfer of contracts (hereinafter referred to as "creditors, etc.") on the same terms and conditions as before: Provided, That the creditors, etc. may assert their rights and claims against the transferee-union on the ground of an event or cause that has occurred between the insolvent union and them before the public announcement. |
| (4) | When a public announcement is made under paragraph (2), it shall be deemed that such public announcement satisfies the requirements for asserting the transfer of nominative claims against the obligor under Article 450 of the Civil Act: Provided, That creditors, etc. may assert their rights and claims against the transferee-union on the ground of an event or cause that has occurred between the insolvent union and them before the public announcement. |
| (5) | Where a decision is made to transfer contracts under Article 86-4 (1), the transferee-union shall acquire the rights relating to real properties, the transfer of which requires registration when a public announcement is made under paragraph (2). |
| (6) | Up on decision on transfer of contract under Article 86-4 (1), the Financial Services Commission shall require the insolvent union and the transferee-union to preserve and keep safe the materials relating to the transfer of contracts and make them available to creditors, etc. for inspection. In such cases, the standards and procedures necessary for preserving, safekeeping, and making such materials available for inspection shall be prescribed by the Financial Services Commission. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 87 Deleted. <Jan. 28, 2000> |
| Article 88 (Application for Bankruptcy) |
The Financial Services Commission may file an application for bankruptcy of a union with the district court having jurisdiction over the location of the principal office of the union, in cases falling under either of the following subparagraphs, in which it is revealed that the union is unable to perform its obligations fully with its own assets as a result of the actual inspection of the assets of a union subject to the administration of business under Article 86, or in cases where the contracts of the insolvent union are completely transferred pursuant to the decision on the transfer of such contracts in accordance with Article 86-4 (1): | 1. | If it is difficult to protect members of the union because there is no union that desires to acquire the union by merger; |
| 2. | If it is deemed difficult for the union to normalize its business within three years even if the National Federation grants a loan to the union. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 88-2 (Bankruptcy Trustee) |
Notwithstanding Article 355 of the Debtor Rehabilitation and Bankruptcy Act, the Chairperson of the National Federation may recommend a bankruptcy trustee from among executive officers or employees of the National Federation upon resolution of the Fund Management Committee to the court when a union is declared bankrupt. <Amended on Jan. 15, 2019> [This Article Wholly Amended on Jan. 20, 2015]
| Article 89 (Instruction and Supervision by the National Federation) |
| (1) | The Chairperson of the National Federation may instruct and supervise unions to conduct the business under Article 78 (1). In such cases, the Chairperson of the National Federation may prepare and distribute guidelines, etc. on the business of the unions, and also may, if necessary, request the unions to submit materials, or to have relevant persons of such unions appear or make statements before the National Federation. <Amended on Dec. 20, 2016> |
| (2) | Upon the receipt of the demand for submission of data, appearance of persons concerned, or a statement under paragraph (1), a union shall comply with the request without delay. |
| (3) | The Chairperson of the National Federation may analyze and evaluate the data submitted by a union pursuant to paragraph (1) in a manner determined by the Financial Services Commission, and may require the union to publicly notify the results thereof. |
| (4) | Where as a result of the analysis and evaluation conducted pursuant to paragraph (3), it is deemed difficult for the union to conduct sound management because the union falls under the criteria which are determined by the Financial Services Commission as prescribed by Presidential Decree, the Chairperson of the National Federation shall recommend a union to merge with other union or take a measure to improve its financial state through disposition of its own assets, downsizing of its organization, or any other way. |
| (5) | Where a union fails to take the measures to improve its financial state earnestly under paragraph (4), the Financial Services Commission shall conduct an inspection pursuant to Article 83 (2) to determine whether the union falls under the requirements for the administration of business under Article 86 (1). |
| (6) | The Chairperson of the National Federation may assign an employee thereof to conduct an inspection of the business affairs of a union if deemed necessary. |
| (7) | The Chairperson of the National Federation may order a union to take a necessary measure, including correction, or take any of the following measures him or herself on the basis of the results of the inspection under paragraph (6): |
| 1. | Demand to take a measure against an executive officer or employee involved under Article 84 (1); |
| 2. | Appointment of an ad hoc executive officer under Article 84 (3); |
| 3. | Request for the registration of an ad hoc executive officer under the proviso to Article 84 (4); |
| 5. | Suspension of the entire business under Article 85 (2). |
| (8) | Where the Chairperson of the National Federation discovers an act subject to imposition of an administrative fine under any of Article 101 (1) as a result of the inspection conducted to a union under paragraph (6), he or she shall report to the Financial Services Commission the matters necessary for imposition of the administrative fine. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 89-2 (Request for Inspection from Union Members or Unions) |
| (1) | Where a union member suspects that the execution of any business affairs by the union to which he, she or it belongs is in violation of the procedures or duties prescribed by this Act, etc., an order issued under this Act, etc., or the articles of association or by-law referred to in this Act, he, she or it may request the National Federation to conduct an inspection of the union if obtaining consent of at least 1/100 of all union members, and may request the Governor of the Financial Supervisory Service to do so if obtaining the consent of at least 3/100 of all union members. <Amended on Mar. 24, 2020> |
| (2) | Where a union suspects that the execution of any business affairs by the National Federation is in violation of the procedures or duties prescribed by this Act, etc., an order issued under this Act, etc., or the articles of association or by-law referred to in this Act, it may request the Governor of the Financial Supervisory Service to inspect the National Federation with the consent of at least 3/100 of all member unions. <Amended on Mar. 24, 2020> |
| (3) | The Governor of the Financial Supervisory Service or the Chairperson of the National Federation shall, upon the receipt of the request for inspection under paragraph (1) or (2), conduct an inspection without delay. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 90 Deleted. <Jul. 30, 2003> |
CHAPTER V SUPPLEMENTARY PROVISIONS
| Article 91 Deleted. <Feb. 1, 1999> |
| Article 92 (Government’s Cooperation) |
| (1) | The Government shall provide supports necessary for the business of unions and the National Federation in order to promote the growth of unions, and shall provide the facilities of the State or public organizations preferentially for the use by unions and the National Federation. |
| (2) | The Government or a local government may grant a subsidy necessary for the business of unions and the National Federation within the budget. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 93 (Prohibition of Involvement in Politics) |
Neither a union nor the National Federation may conduct any act to involve in politics.
[This Article Wholly Amended on Jan. 20, 2015]
| Article 94 (Contracts with Foreign Institutions) |
The National Federation may enter into insurance agreements, etc. with international organizations in connection with its business to manage its funds safely.
[This Article Wholly Amended on Jan. 20, 2015]
| Article 95 (Special Cases concerning Agricultural Cooperatives) |
| (1) | Any of the following legal entities shall be deemed to be a credit union under this Act when engaging in the business activities referred to in Article 39 (1) 1 and 6: |
| 1. | A local agricultural cooperative and a local livestock cooperative (including a commodity cooperative that provides credit service) established under the Agricultural Cooperatives Act; |
| (2) | In cases falling under paragraph (1), the business of the National Federation (in cases of the National Federation of the Agricultural Cooperatives, the business prescribed in Article 78 (1) 6 shall be excluded) shall be conducted by each National Federation established under each relevant Act under the subparagraphs of paragraph (1). |
| (3) | Where cooperatives and their National Federations under paragraphs (1) and (2) engage in credit union business, they shall separate such credit union business from their other business. |
| (4) | This Act, excluding Article 6 (3) and (4), Article 39 (1) 1 and 6, Articles 42, 43, 45, 78 (1) 3 (limited to inspection and supervision over the credit business of a union) and 5, 78 (6), 83, 83-2, 83-3, 84, 89 (3), and 96, shall not apply to the business of the cooperatives and their National Federations under paragraphs (1) and (2). |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 96 (Delegation of Authority) |
| (1) | The authority of the Financial Services Commission vested under this Act may be delegated fully or partially to the Governor of the Financial Supervisory Service or the Chairperson of the National Federation as prescribed by Presidential Decree. |
| (2) | The Governor of the Financial Supervisory Service may partially delegate to the Chairperson of the National Federation his or her authority vested under this Act, or the authority delegated by the Financial Services Commission pursuant to paragraph (1), as prescribed by Presidential Decree, if deemed necessary. |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 97 (Mutual Aid Business) |
| (1) | Unions and the National Federations shall establish a by-law on mutual aid business to obtain authorization from the Financial Services Commission where conducting mutual aid business. |
| (2) | The by-law on mutual aid business under paragraph (1) shall prescribe the methods for conducting such business, the mutual aid agreement, the mutual aid fee, etc. |
| (3) | Where amending or repealing the by-law on mutual aid business under paragraph (1), authorization of the Financial Services Commission shall be required: Provided, That if the content to be amended meeting the standards determined and publicly notified by the Financial Services Commission, such content shall be reported to the Commission. |
| (4) | The Financial Services Commission shall notify an applicant of whether the report is accepted within a period from the date such report is received pursuant to the proviso to paragraph (3) to the date publicly notified by the Financial Services Commission. <Newly Inserted on Jan. 15, 2019> |
| (5) | Where the Financial Services Commission fails to notify an applicant of whether the report is accepted or whether to extend the period of processing civil affairs in any related statutes and regulations under paragraph (4), it shall be deemed that the report is accepted one day following the day of expiration of the such period (where the processing period is extended or re-extended under any statutes and regulations related to the processing of civil affairs, referring to the processing period). <Newly Inserted on Jan. 15, 2019> |
[This Article Wholly Amended on Jan. 20, 2015]
The Financial Services Commission shall hold a hearing when it intends to revoke an authorization for establishment under Article 85 (2). [This Article Wholly Amended on Jan. 20, 2015]
CHAPTER VI PENALTY PROVISIONS
| Article 99 (Penalty Provisions) |
| (1) | Where any executive officer, employee, or liquidator of a union or the National Federation commits any of the following acts, he, she or it shall be punished by imprisonment with labor for not more than three years or by a fine not exceeding 30 million won. In such cases, imprisonment with labor and a fine may be imposed concurrently: |
| 1. | Act of using funds for any purpose other than that of business of the union or the National Federation, or act of inflicting damage upon the union or the Federation by disposing of or misappropriating any of its assets; |
| 2. | Act of obtaining authorization for establishment in violation of Article 7. |
| (2) | Where any executive officer, employee or liquidator of a union or the National Federation commits any of the following acts, he or she shall be punished by imprisonment with labor for not more than two years or by a fine not exceeding 20 million won: <Amended on Apr. 18, 2017> |
| 1. | Act of making a registration in a false manner; |
| 2. | Act of granting loans, etc. to a person exceeding the loan limit for the same person, in violation of Article 42; |
| 4. | Act of preparing a false financial statement to obtain approval from a general meeting, in violation of the standards for accounting or the standards for the settlement of accounts determined by the Financial Services Commission pursuant to Article 47 (2); |
| 5. | Where he or she violates Article 81 (3) or (4). |
| 6. | Act of not accepting the administration of business under Article 86 (1); |
| 7. | Act of refusing to submit data, appear, make a statement, in violation of Article 89 (2) or act of submitting false data or making a misrepresentation; |
| 8. | Deleted. <Apr. 18, 2017> |
| (3) | Any person who violates Articles 3 (2), 27-2 (including the cases to which the said provision shall apply mutatis mutandis pursuant to Article 72 (8)), or 93 shall be punished by imprisonment with labor for not more than one year or by a fine not exceeding 10 million won. |
| (4) | Deleted. <Apr. 18, 2017> |
[This Article Wholly Amended on Jan. 20, 2015]
| Article 100 (Joint Penalty Provisions) |
Where the representative of a union or the National Federation, or any agent, employee, or other employed person thereof has committed an offense referred to in Article 99 (1) or (2) in connection with the business of the union or the National Federation, not only shall the offender be punished accordingly, but the union or the National Federation also shall be punished by a fine under the same paragraph of the said Article: Provided, That the same shall not apply where such union or the National Federation has not been negligent in giving due diligence and supervision over the relevant affairs to prevent such violation. [This Article Wholly Amended on Aug. 4, 2011]
| Article 101 (Administrative Fine) |
| (1) | Where a union or the National Federation falls under any of the following subparagraphs, it shall be punished by an administrative fine not exceeding 20 million won: <Amended on Apr. 18, 2017> |
| 1. | When it amends the articles of association, in violation of Article 24 (2); |
| 1-2. | When it fails to either hold a reserve for repayment or deposit such reserve with the National Federation, in violation of Article 43 (1); |
| 2. | When it fails to submit a report on the settlement of accounts to the Chairperson of the National Federation in violation of Article 47 (4); |
| 3. | When it fails to undergo the accounting audit by an auditor under Article 47 (5) or 81 (2) without good cause; |
| 3-2. | When it fails to give public notice, in violation of Article 83-2, or gives false public notice; |
| 4. | When it fails to submit a report under Article 83-4 or submits a false report; |
| 4-2. | When it fails to comply with a corrective order, in violation of Article 85 (1) 2; |
| 5. | When it fails to make a public announcement in violation of Article 86-5 (2); |
| 6. | When it fails to preserve or manage the materials relating to the transfer contracts or make such materials available to creditors, etc. for inspection in violation of Article 86-5 (6); |
| 7. | When it refuses, obstructs, or avoids the inspection conducted by a supervisory institution. |
| (2) | A union which fails to take the measures to protect a staff member, or imposes disadvantage to a staff member, in violation of Article 45-2, shall be subject to a fine not exceeding 10 million won. <Newly Inserted on Apr. 18, 2017> |
| (3) | Administrative fines under paragraphs (1) and (2) shall be imposed and collected by the Financial Services Commission as prescribed by Presidential Decree. <Amended on Apr. 18, 2017> |
[This Article Wholly Amended on Jan. 20, 2015]
ADDENDA <Act No. 5506, Jan. 13, 1998>
Article 1 (Enforcement Date)
This Act shall enter into force on April 1, 1998: Provided, That the preparatory actions necessary for the abolition of the National Association may be done before this Act enters into force.
Article 2 (Transitional Measures concerning Transfer of Security Fund)
| (1) | The authorizations, permissions, and other acts done by the National Federation in connection with the security fund under the previous provisions as the time this Act enters into force shall be deemed the acts done by the Korea Deposit Insurance Corporation pursuant to this Act. |
| (2) | The reports, payments, and other acts done by unions to the National Federation in connection with the security fund under the previous provisions as at the time this Act enters into force shall be deemed to be the acts done to the Korea Deposit Insurance Corporation pursuant to this Act. |
| (3) | The security fund as of the time this Act enters into force shall be transferred to the Korea Deposit Insurance Corporation. |
| (4) | The Korea Deposit Insurance Corporation shall succeed to all the rights and obligations of the National Federation in connection with the security fund as at the time this Act enters into force. |
| (5) | The titles of the National Federation recorded in the registers and indicated in various kinds of certificates, etc. in connection with the security fund as of the time this Act enters into force shall be deemed to be those of the Korea Deposit Insurance Corporation. |
| (6) | The National Federation and the Korea Deposit Insurance Corporation shall prepare the list of assets, accounting books, data, etc. relating to the security fund before this Act enters into force to obtain approval from the Minister of Economy and finance, and shall prepare for transferring them to the Korea Deposit Insurance Corporation. |
Article 3 (Transitional Measures concerning Establishment and Management of Security Fund)
The legal entities specified in each subparagraph of Article 95 (1) may establish and manage the security fund in accordance with the previous provision of Article 83-18 (10), notwithstanding the amendment of this Act. Article 4 (Transitional Measures Following Abolition of the National Association)
| (1) | The member unions of the National Credit Union Association under previous provisions as at the time this Act enters into force shall be deemed to be the members of the National Federation. |
| (2) | The National Credit Union Association under previous provisions as of the time this Act enters into force shall be deemed to be dissolved as of the enforcement date of this Act, notwithstanding previous provisions concerning dissolution and liquidation, and the National Federation shall succeed to all rights and obligations of the National Credit Union Association and the employment relations with its employee comprehensively. |
| (3) | The titles of the National Credit Union Association to the property and rights recorded in the registers or indicated in various kinds of certificates shall be deemed to be those of the National Federation. |
| (4) | The value of the assets to which the National Federation shall succeed under paragraph (2) shall be the book value as of the day before the enforcement date of this Act. |
| (5) | The assets to which the National Federation shall succeed under paragraph (2) shall be deemed to be the investments by the unions in the National Federation. |
Article 5 (Transitional Measures Following Establishment of General Meeting)
A resolution adopted by the representatives’ meeting of the National Federation before the enforcement date of this Act shall be deemed to be the resolution by the general meeting of the National Federation.
Article 6 (Amendment to Articles of Incorporation)
The unions and the National Federation shall amend their articles of association respectively in accordance with this Act within three months of the enforcement date of this Act.
Article 7 (Transitional Measures concerning Terms of Executive Officers and Representatives)
| (1) | The terms of the executive officers of the unions and the National Federation already elected under the previous provisions at the time this Act enters into force shall be governed by the previous provisions: Provided, That the term of the executive officers of the unions and the National Federation elected during the period from January 1, 1998 through March 31, 1998 shall be governed by this Act. |
| (2) | The terms of the representatives elected during the period from January 1, 1998 through March 31, 1998 shall end on the opening date of the general meeting held first after the enforcement date of this Act. |
| (3) | The term of the representatives elected first after the enforcement date of this Act shall end on the opening date of the general meeting held in 2002. |
Article 8 (Relationship to Other Statutes and Regulations)
A citation of the "National Credit Union Association" in any other statute enforceable at the time this Act enters into force shall be deemed to be the citation of the "National Credit Union Federation".
Article 9 Omitted.
ADDENDUM <Act No. 5739, Feb. 1, 1999>
This Act shall enter into force on the date of its promulgation.
ADDENDA <Act No. 5982, May 24, 1999>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 6 Omitted.
ADDENDA <Act No. 6018, Sep. 7, 1999>
Article 1 (Enforcement Date)
This Act shall enter into force on July 1, 2000. (Proviso Omitted.)
Articles 2 through 21 Omitted.
ADDENDA <Act No. 6187, Jan. 21, 2000>
Article 1 (Enforcement Date)
This Act shall enter into force on May 1, 2000. (Proviso Omitted.)
Articles 2 through 14 Omitted.
ADDENDA <Act No. 6204, Jan. 28, 2000>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation: Provided, That the provisions of Article 95 as amended shall enter into force on July 1, 2000, but preparatory works for the enforcement of this Act including the preparation and amendment of the articles of association necessary for the enforcement of this Act and the appointment and dismissal of the executive officers of unions and the National Federation may be processed before this Act enters into force. Article 2 (Applicability to and Transitional Measures concerning Standing Presidents of Unions)
| (1) | The proviso to Article 27 (6) as amended shall be applicable to the standing union presidents elected first after this Act enters into force and afterwards. |
| (2) | A union that shall have a standing president under the proviso to Article 27 (6) as amended, but whose incumbent president still has the remaining term of two or more years as at the time this Act enters into force shall elect the standing president under the amended provision within one year after this Act enters into force. In such cases, the term of the president under the previous provision shall be deemed to have expired. |
| (3) | The term of the union president elected to the standing president under paragraph (2) shall be the remaining term of his or her predecessor, and a person who serves as the union president incumbent as at the time this Act enters into force and then is newly elected again shall not be deemed to be elected for another term consecutively under Article 31. |
Article 3 (Transitional Measures concerning Grounds for Disqualification of Executive Officers)
If an executive officer, etc. of a union becomes disqualified under Article 28 (1) (including the cases to which said provision shall apply mutatis mutandis pursuant to Article 72 (5)), as amended, due to a cause that occurred before this Act enters into force, the previous provision shall apply notwithstanding the amended provision. Article 4 (Transitional Measures concerning Standing Executive Officers of National Federation)
| (1) | The Chairperson of the National Federation shall appoint the standing directors under Article 71 as amended within three months after this Act enters into force; |
| (2) | Matters concerning the Chairperson of the National Federation under the amended provision of Article 72 shall be applicable to the Chairperson of the National Federation elected first after this Act enters into force and afterwards. |
Article 5 (Transitional Measures concerning Union subject to Management under Administratorship)
As to the unions subject to the management under administratorship in accordance with previous provisions as at the time this Act enters into force, the previous provisions shall apply notwithstanding the amended provisions of Article 86.
ADDENDA <Act No. 6256, Jan. 28, 2000>
Article 1 (Enforcement Date)
| (1) | This Act shall enter into force on July 1, 2000. (Proviso Omitted) |
Articles 2 through 14 Omitted.
ADDENDA <Act No. 6957, Jul. 30, 2003>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation: Provided, That the provisions of Section 4 of Chapter III, Article 86-2 (5), and Article 90 as amended shall enter into force on January 1, 2004. Article 2 (Applicability to Prohibition against Putting Investments in Pledge)
The provision of Article 14 (6) as amended shall not be applicable, for the period of time of three years after this Act enters into force, to the pledge rights already established in investments before this Act enters into force. Article 3 (Applicability to Term of Executive Officers)
The provision of Article 31 (3) as amended shall be applicable to the executive officers elected first after this Act enters into force and afterwards. Article 4 (Transitional Measures concerning Appointment of Executive Officers of National Federation)
| (1) | The National Federation shall elect the President for credit and mutual aid services, the Director for inspection and supervision, and professional directors under the provisions of Article 71-2 as amended at the general meeting held first after this Act enters into force. |
| (2) | The Chairperson of the National Federation and the persons who serve as the executive officers of the National Federation under previous provisions at the time this Act enters into force shall be deemed to be the Chairperson of the National Federation and directors elected at the general meeting under the provisions of Article 71-2 as amended: Provided, That the term of the Chairperson of the National Federation and the directors shall end on the expiry of the term under the previous provisions. |
Article 5 (Transitional Measures concerning Establishment of Audit Committee)
The National Federation shall establish the Audit Committee under the provisions of Article 76 as amended at the general meeting convened first after this Act enters into force. Article 6 (Transitional Measures concerning Establishment of Guidelines for Internal Control and Appointment of Compliance Officers)
The National Federation shall establish guidelines for internal control under Article 76-3 within three months after this Act enters into force, and shall appoint a compliance officer. Article 7 (Transitional Measures concerning Qualifications of Executive Officers)
If a person who has served as an incumbent executive officer of a union or the National Federation at the time this Act enters into force becomes disqualified under Article 28 (1), as amended, (including a case to which the said provision shall apply pursuant to Article 71-2 (6)) due to a cause that occurred before this Act enters into force, the previous provisions shall apply notwithstanding the amended provision. Article 8 (Transitional Measures concerning Borrowings and Investment of the National Federation)
The funds borrowed and invested in other legal entities by the National Federation before this Act enters into force shall be deemed to have obtained approval from the Financial Supervisory Commission under Article 78 (5) as amended. Article 9 (Transitional Measures concerning Appointment of Administrators)
The administrators appointed for the management under administratorship before this Act enters into force shall be governed by the previous provisions notwithstanding Article 86-2 (5) as amended. Article 10 (Transitional Measures concerning Penalty Provisions)
The conducts committed before this Act enters into force shall be governed by the previous provisions.
ADDENDA <Act No. 7428, Mar. 31, 2005>
Article 1 (Enforcement Date)
This Act shall enter into one year after the date of its promulgation.
Articles 2 through 6 Omitted.
ADDENDUM <Act No. 8145, Dec. 30, 2006>
This Act shall enter into force on the date of its promulgation.
ADDENDA <Act No. 8635, Aug. 3, 2007>
Article 1 (Enforcement Date)
This Act shall enter into force one and half years after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 44 Omitted.
ADDENDUM <Act No. 8840, Jan. 17, 2008>
This Act shall enter into force on the date of its promulgation.
ADDENDA <Act No. 8852, Feb. 29, 2008>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 7 Omitted.
ADDENDA <Act No. 8863, Feb. 29, 2008>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Articles 2 through 5 Omitted.
ADDENDA <Act No. 10303, May 17, 2010>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 10 Omitted.
ADDENDA <Act No. 10522, Mar. 31, 2011>
Article 1 (Enforcement Date)
This Act shall enter into force on March 2, 2012. (Proviso Omitted.)
Articles 2 through 28 Omitted.
ADDENDA <Act No. 10682, May 19, 2011>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Articles 2 through 3 Omitted.
ADDENDA <Act No. 10866, Jul. 21, 2011>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation: Provided, That ... Article 3 of Addenda shall enter into force one year after the date of its promulgation.
Articles 2 through 4 Omitted.
ADDENDUM <Act No. 11039, Aug. 4, 2011>
This Act shall enter into force on the date of its promulgation.
ADDENDA <Act No. 11545, Dec. 11, 2012>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation: Provided, That the amended provisions of Article 31 (1) shall enter into force on the date of its promulgation. Article 2 (Applicability to Appointment of Standing Executive Officers of Unions)
A union which shall elect a standing executive officer, not as union president, pursuant to the amended provision of Article 27 (7) shall elect such a standing executive officer, not as union president, by no later than the date of the general meeting initially convened for the appointment of executive officers after this Act enters into force. Article 3 (Applicability to Restrictions on Qualification of Executive Officer)
The amended provision of Article 28 (1) (including cases to which the aforesaid paragraph shall apply mutatis mutandis pursuant to Articles 71-2 (6) and 76-3 (4)) shall apply to a person whose qualification as an executive officer or promoter of a union or as an executive officer or compliance officer of the National Federation shall be restricted due to a cause or event that first occurs after this Act enters into force.
ADDENDUM <Act No. 12382, Jan. 28, 2014>
This Act shall enter into force on the date of its promulgation.
ADDENDA <Act No. 13067, Jan. 20, 2015>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Article 2 (Applicability to Refund of Investment)
The amended provisions of Article 17 (2) shall apply begin to apply to cases where capital money paid in after this act enter into force is refunded. Article 3 (Applicability to President of National Federation)
The amended provisions of Article 71 (3) shall apply beginning with the President of the National Federation who is first elected after this Act enters into force due to the expiration of the term of the office of the President of the National Federation who holds his or her office at the time this Act enters into force or any other cause. Article 4 (Applicability to Surplus Funds)
The amended provisions of Article 78 (6) shall apply beginning with the case where the surplus funds deposited by unions after this Act enters into force. Article 5 (Applicability to Demand for Claiming Damage)
The amended provisions of Article 80-5 (1) shall apply beginning with the case where the fund is provided pursuant to the amended provisions of subparagraph 1, 3, or 4 of the same paragraph after this Act enters into force. Article 6 (Transitional Measures concerning Incompetent)
An incompetent under the adult guardianship or a quasi-incompetent under the limited guardianship referred to in the amended provisions of Article 16 (2) 4 and Article 28 (1) 1 shall be deemed to include a person for whom the effect of declaration of the incompetency or quasi-incompetency is maintained pursuant to Article 2 of the Addenda to the partially amended Civil Act (No. 10429). Article 7 (Transitional Measures concerning Election of Full-time Executive Officers of Unions)
Notwithstanding the amended provisions of Article 27 (6), full-time presidents and standing executive officers of unions who were elected pursuant the previous Article 27 and hold their office at the time this Act enters into force shall maintain their status of full-time presidents or full-time executive officers until their term of office expires. Article 8 (Transitional Measures concerning Unions which Have Gone through Financial Supervisory Service)
Notwithstanding the amended provisions of Article 47 (5), the previous provisions of Article 47 (5) shall apply to the unions which fall under any of the following subparagraphs: | 1. | Unions which have gone through the inspection conducted by the Financial Supervisory Service under the proviso to the previous Article 47 (5) before this Act enters into force in the year in which this Act enters into force; |
| 2. | Unions which are going through the inspection conducted by the Financial Supervisory Service under the proviso to the previous Article 47 (5) at the time this Act enters into force. |
ADDENDUM <Act No. 14457, Dec. 20, 2016>
This Act shall enter into force on the date of its promulgation.
ADDENDA <Act No. 14824, Apr. 18, 2017>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation: Provided, That the amended provisions of Articles 27, 30 (3), and 34 (4) shall enter into force one year after the date of its promulgation. Article 2 (Applicability concerning Election of Full-Time Auditor)
The amended provisions of Article 27 (8) and (9) shall apply beginning with the first case of electing an auditor after such amended provisions enter into force. Article 3 (Transitional Measures concerning Penalty Provisions)
Notwithstanding the amended provisions of Article 99 (2) and (4), the former provisions shall govern in applying penalty provisions to violations committed before this Act enters into force.
ADDENDA <Act No. 16292, Jan. 15, 2019>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Article 2 (Applicability to Authorization for Establishment of Union)
The amended provisions of Article 8 (3) (including where the latter part of Article 55 (1) and Article 61 (2) apply mutatis mutandis) shall begin to apply from the cases where an application is received first after this Act enter into force. Article 3 (Applicability to Election of Executives)
The amended provisions of Article 27-3 (including where Article 72 apply mutatis mutandis) shall begin to apply from the cases where an executive office of the union and the National Federation is elected first after this Act enter into force. Article 4 (Applicability to Prescription)
The amended provisions of Article 80-2 (6) and (7) shall begin to apply from the cases where the National Federation decides to repay the deposits, etc. in subrogation of a union after this Act enter into force. Article 5 (Applicability to Report to Amend by-law on mutual aid business Authorized)
The amended provisions of Article 97 (4) and (5) shall also apply to cases where a report for amendment is made pursuant to the proviso to Article 97 (3) and the acceptance of such report is under way as at the time this Act enters into force.
ADDENDA <Act No. 16652, Nov. 26, 2019>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Articles 2 through 3 Omitted.
ADDENDA <Act No. 17112, Mar. 24, 2020>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 13 Omitted.
ADDENDUM <Act No. 17803, Dec. 29, 2020>
This Act shall enter into force six months after the date of its promulgation.