KRS 286.6-296: Suspension and removal of officers -- Review of such actions --

Injunction.

(1) The supervisory committee by a unanimous vote may suspend any member of the

credit committee and shall report such action to the board of directors for

appropriate action.

(2) The supervisory committee by a unanimous vote may suspend any officer or

member of the board of directors until the next members' meeting, which shall be

held not less than seven (7) nor more than twenty -one (21) days after such

suspension. At such meeting the suspension shall be acted upon by the members.

(3) Any member of the supervisory committee may be removed by the board of

directors for failure to perform his duties in accordance with this subtitle, the

articles of incorporation, or the bylaws.

(4) If the commissioner shall determine that any officer or director of a credit union has

committed any violation of law, administrative regulation, or of a cease and desist

order which has become final, or has engaged in or participated in any unsafe o r

unsound practice in connection with the credit union, or has committed or engaged

in any act, omission, or practice which constitutes a breach of his fiduciary duty as

such officer or director, and the commissioner determines that the credit union has

suffered or will probably suffer substantial financial loss or other damages or that

the interests of its members could be seriously prejudiced by reason of such

violation or practice or breach of fiduciary duty, or that the director or officer has

received financial gain by reason of the violation or practice or breach of fiduciary

duty, the commissioner may serve upon such director or officer a written notice of

intention to remove him or her from office. The violation, practice, or breach must

be one invol ving personal dishonesty on the part of such director or officer, or one

which demonstrates a willful or continuing disregard for the safety or soundness of

the credit union. The written notice shall serve to suspend the officer or director

from office. Su ch suspension shall become effective upon service of such notice

and, unless stayed by a court in proceedings authorized by subsection (6) of this

section, shall remain in effect pending the completion of the administrative

proceedings under subsection (5) of this section and until such time as the

commissioner shall dismiss the charges specified in such notice or, if an order of

removal is issued against the officer or director, the effective date of any such order.

(5) A notice of intention to remove an o fficer or director from office shall contain a

statement of the facts constituting grounds therefor, and shall fix a time and place at

which a hearing will be held thereon. Such hearing shall be fixed for a date not

earlier than thirty (30) days nor later than sixty (60) days after the date of service of

such notice, unless an earlier date is set by the commissioner at the request of such

officer or director and for good cause shown. Unless such officer or director shall

appear at the hearing in person or b y duly authorized representative, he or she shall

be deemed to have consented to the issuance of an order of removal. In the event of

such consent, or if upon the record made at any such hearing the commissioner shall

find that any of the grounds specified in such notice have been established, the

commissioner may issue such orders of suspension or removal from office as he or

she deems appropriate.

(6) Within ten (10) days after an officer or director has been suspended from office,

such officer or directo r may apply to the Circuit Court of the residence of the

individual or of the principal office of the credit union for a stay of such suspension

pending the completion of the administrative proceedings pursuant to the notice

served upon such officer or dir ector, and such court shall have jurisdiction to grant

such stay.

(7) Any person aggrieved by a final order of the commissioner under subsection (5) of

this section may obtain a review of the order by filing in the Circuit Court of the

residence of the individual or of the principal office of the credit union a petition of

appeal within ten (10) days after the rendition of a final order. A copy of the petition

shall be served upon the commissioner and thereupon the commissioner or the

commissioner's agent s hall certify and file in court a copy of the record or other

evidence upon which the order is entered. No objection to the order may be

considered by the court unless it was argued before the commissioner or there were

reasonable grounds for failure to do so.

(8) The commissioner may apply to the Circuit Court of the residence of the individual

or of the principal office of the credit union for an injunction to enforce any order

under subsection (5) of this section and it shall be the duty of the court to i ssue such

injunction.