P.R. Laws tit. 7, § 1334b
(a) The corporate entity denominated “Shares and Deposits Insurance Corporation for Cooperative Savings and Credit Unions” created by virtue of Act No. 5 of January 15, 1990, as amended, is hereby redesignated as the “Public Corporation for the Supervision and Insurance of Cooperatives of Puerto Rico”. The juridical, operational and financial continuity of said corporate entity is hereby provided, subject to the provisions of this act as of its approval.
(b) The Corporation shall have the primary responsibility of:
(1) Inspecting and supervising in a comprehensive and consolidated manner the cooperative savings and credit unions that operate or do business in the Commonwealth of Puerto Rico, exclusively watching for the faithful compliance by said cooperative savings and credit unions of all present and future laws regarding their operations, businesses, products and/or services.
(2) Providing shares and deposits insurance to all cooperative savings and credit unions, as required by this chapter; Provided, That the application of said insurance to the Cooperative Bank shall be optional and not compulsory.
(3) Seeing to the economic solvency of cooperatives, particularly those of savings and credit unions.
(4) Seeing to the rights and prerogatives of the partners of every cooperative, protecting their financial interests, their right to be informed and preventing deceitful and fraudulent practices in the offer, sale, purchase and any other transaction for or with respect to the shares of cooperatives.
(c) In order to empower the Corporation with full power and authority to perform the comprehensive and consolidated function of monitoring and supervising the savings and credit unions cooperatives, all the functions, powers and duties of the Office of the Commissioner of Financial Institutions, the Office of the Inspector of Cooperatives, the Secretary of the Treasury and of any other agency, body or government entity related to the supervision, monitoring and implementation of the following provisions of law as applied to the savings and credit union cooperatives, their affiliates, and their businesses and operations, are hereby transferred to the Corporation:
(1) Act No. 6 of January 15, 1990, known as the “Savings and Credit Cooperatives Partnership Act of 1989”; Act No. 50 of August 4, 1994, known as “General Cooperatives Association Act of Puerto Rico”; §§ 941 et seq. of Title 10, known as “Small Personal Loans Act”; §§ 1051 et seq. of this title, known as “Mortgage Loans Act”; §§ 996 et seq. of Title 10, known as “Personal Property Lease Act”; §§ 2401 et seq. of Title 10, known as “Act to Regulate Personal Property Lease Contracts”; §§ 2551 et seq. of Title 10, known as “Act to Regulate the Monetary Transaction Business”; §§ 1401 et seq. of this title, known as “Act on Transfers of Funds Abroad”; §§ 851 et seq. of Title 10, known as “Uniform Securities Act”; §§ 661 et seq. of Title 10, known as “Investment Companies Act”; §§ 206—209 of this title; § 215 of this title; §§ 731 et seq. of Title 10, known as “Retail Installments Sales and Finance Companies Act”; §§ 1071 of this title, known as “Act to Regulate the Financial Intermediation Business”; §§ 8569 and 8572 of Title 13, known as “Internal Revenue Code of 1994”; §§ 251 et seq. of this title, known as “Act to Regulate the Deposit of Public Funds and Provide for their Security”.
(2) The faculties and powers of the Corporation to grant licenses, permits and authorizations pursuant to the above cited acts are limited to the exercise of such faculties in their application to cooperative savings and credit unions, their affiliates and their businesses and operations thereof.
(3) With the exception of the Office of the Inspector of Cooperatives, all property, documents, sums unspent or unencumbered funds from the appropriations, items, and other funds on hand and under the custody of the agencies devoted to the administration of the laws referred to in clause (1) of this subsection, specifically with regard to cooperatives, are hereby transferred to the Corporation. The transfer of functions, property, assets and funds contemplated in this chapter do not imply the transfer of personnel of any of the agencies concerned. Provided, however, That the Corporation and the transferring agencies may, by mutual accord, coordinate and agree on the assignment or transfer of specialized personnel.
(4) Every formal adjudicative procedure, whether administrative or judicial, that on the effective date of this act has been initiated, shall conclude in, or under the control of the agency that initiated it. Any other matter for which, on the abovementioned date, a formal adjudicative procedure, whether administrative or judicial, has not been initiated, shall be remitted to the Corporation with a status report and recommendations for its subsequent processing and attention by the Corporation. The remitting of said matters must conclude on, or before ninety (90) days after the approval of this act, unless the Executive Director and the head of the corresponding agency agree to postpone the transfer, which postponement shall not exceed one hundred and eighty (180) days.
(5) All those laws, regulations, orders, permits, memoranda of understanding, circular letters and administrative decisions applicable to cooperatives in effect on August 17, 2001, issued by transferring agencies, shall remain in effect until they are modified or rendered ineffective by the Corporation.
(d) In order to discharge its functions and responsibilities, the Corporation may exercise all the powers, privileges and immunities required therefor, including the following:
(1) Execute all those acts and contracts that are necessary to implement this chapter and to exercise the powers conferred to it hereby.
(2) Adopt, alter and use an official seal, which shall be judicially recognized.
(3) To sue and be sued.
(4) Acquire, hold, encumber, transfer or otherwise administer, use, and dispose of real and personal property.
(5) Control and decide on the nature and need of all its expenses and the manner that they shall be incurred, authorized and paid.
(6) Accept any type of financial aid, including subsidies, grants, advances and other transfers from the Government of the Commonwealth of Puerto Rico and of the government of the United States of America and its agencies, departments, instrumentalities, public corporations and political subdivisions.
(7) Grant reinsurance contracts for the total amount or part of the assumed risk, retaining the maximum risk commensurable with its resources.
(8) Issue short and long term obligations to execute its corporate purposes, offering its assets as security, if necessary.
(9) Act as receiver or trustee of any insured cooperative that is subject to a receivership or liquidation procedure.
(10)
(A) Operate as supervisory body of cooperatives. Provided, That, with respect to the Cooperative Bank, the Office of the Commissioner of Financial Institutions is the supervisory agency; with respect to insurance cooperatives, the Insurance Commissioner is the supervisory agency; and further Provided, That with respect to cooperatives that are not savings and credit unions, all supervisory functions carried out by the Corporation shall be performed observing the difference in the scope and bounds of oversight for non-financial cooperative entities.
(B) Seeing as the Cooperative League is the highest-ranking federative institution within the Cooperative Movement in Puerto Rico, in the exercise of its complementary functions together with the Commonwealth of Puerto Rico, such Cooperative League shall lie outside the jurisdictional bounds and the oversight powers of the Corporation. The League shall be overseen by its respective members and internal bodies within its structure. Provided, That it shall render a yearly balance sheet report to the Department of State, which shall contain its financial statements as audited by a certified public accountant. In addition to the rights to inspection provided in §§ 4381 et seq. of Title 5, known as the “General Cooperative Associations Act of 2004”, all cooperatives shall be entitled to examine, during regular business hours, the books, records, and minutes of the Cooperative League, and may also make copies or excerpts thereof; Provided, That no cooperative shall be entitled to access any information that by provision of any applicable law or regulation is confidential or privileged, including any information that constitutes a trade secret or strategy. Should any controversy arise as to the confidentiality or privilege that protects any information requested, the controversy shall be adjudicated by the representation of the Cooperative Movement at the Governing Board of the Cooperative Development Commission, except for the representative of the League proper. Any petition to examine the books and documents of the League shall be duly authorized by the Board of Directors of the requestor cooperative.
(11) Through a decision of its board of directors:
(A) Adopt rules regarding its own procedures and working standards.
(B) Implement through regulations, any provision; define, with the approval of the Board, any term not defined by this or other laws under its responsibility to administrate; adopt, approve, amend or revoke those rules and regulations, orders, resolutions and determinations needed for compliance of this chapter.
(C) Establish through regulations, those fees deemed reasonable to handle consultations, issuing of opinions or administrative determinations, granting of permits authorized by law or regulations, regular or special examinations, or for the rendering of other similar services related to any of the laws and regulations that it administers or that are under its jurisdiction, pursuant to guides established in §§ 284—284e of Title 3. Provided, That except in the case of examination fees, in no case shall the fees exceed the sum of five hundred dollars ($500).
(D) Establish through regulations, the standards under which the Corporation shall require the savings and credit unions cooperative to:
(i) Keep their accounts, records and registers.
(ii) Maintain methods and norms to determine the worth of assets and liabilities.
(iii) Fix the market value of an asset.
(iv) Obtain insurance for damages or other risks on its property or properties.
(v) Maintain adequate insurance against all those risks deemed necessary and appropriate for the protection of partners, depositors or the public.
(vi) Charge against its undistributed benefits, reserve funds or capital accounts, any loan, or part thereof, any asset, or part thereof, which constitutes a possible loss for the entity subject to examination.
(vii) Segregate any portion of future benefits that are necessary or convenient until said capital accounts and reserve funds have been fully restored.
(viii) Create the appraised assets reserves that are necessary or convenient.
(ix) Require every person covered by the provisions of this chapter to keep and preserve those records and other documents needed to execute the same.
(12) Deal with, investigate and resolve complaints filed before the Corporation.
(13) File any legal remedies, actions or procedures found necessary or convenient to enforce the purposes of this, or any other act or regulation, whose compliance or supervision has been assigned to it, whether through its legal counsel, or by the Secretary of Justice, upon prior request to such effect.
(14) Enter into contracts or agreements with public or private persons or institutions to carry out investigations, studies or any other analysis to comply with the purposes of this chapter.
(15) Acting through the Executive President, appoint all personnel deemed necessary to carry out its functions.
(16) Impose administrative fines for violations of the laws it administers, or to the rules, regulations or orders approved or issued by the Corporation as set forth in this chapter.
(17)
(A) Issue, upon prior notice and hearing, orders to cease and desist and prescribe the terms it determines are convenient and beneficial to the public interest. When according to the Corporation, there is a situation which deserves immediate corrective action, due to its noxious nature or to the grave damage that it could cause to any cooperative, to its partners, to depositors, to the cooperative movement or to specific persons, it may issue a summary order, without the requirement of prior notice and holding of the hearing, until any procedure instituted pursuant to this section is finally provided. Upon issuing the order, the Corporation shall notify it immediately to the concerned parties, stating the specific grounds for it. The party affected by said order may request the holding of a hearing within a term of ten (10) days from the receipt thereof. If the hearing is not requested, and the Corporation does not order it, the order shall remain in effect until it is modified or rendered ineffective by the Corporation. If the holding of a hearing is requested or ordered, the Corporation, after notifying and holding said hearing and permitting every person an opportunity to be heard and to present evidence in his/her favor, as specified below, it may modify, extend or render the order in question ineffective, until the matter is ultimately disposed of.
(B) The Corporation may render ineffective or modify an order if it determines that the conditions that induced it to render the same have changed or that for some other reason it would be convenient for the public interest to do so.
(18) Resort to the Court of First Instance of Puerto Rico to request that any order to cease and desist issued by the Corporation be put into effect.
(19)
(A) To carry out, on its own and by entrustment of the Cooperative Development Commissioner, studies and research of any kind on issues that affect any branch of the Cooperative Movement, for which the Corporation may require any information as necessary, pertinent or essential to accomplish such purposes. The Corporation may require or allow any person to present a written statement, under oath or otherwise, as the Corporation may determine, in connection with the facts and circumstances appertaining to the issue to be studied or researched.
(B) Acting through the Executive President and other officials designated by him/her to such ends, take oaths and affirmations, summon witnesses, compel their appearance, compile evidence and require the presentation of books, papers, correspondence, notes, agreements or other documents or registries deemed relevant or substantial to the investigation.
(C) In cases of non-appearance or refusal to obey a summons served to any person, the Court of First Instance, by petition of the Corporation, may issue an order requiring said person to appear before the Corporation or the official designated by it, to produce the documentary evidence requested, or to furnish evidence with respect to the matter in question, under investigation or study. Failure to comply with the judicial order issued to such effects may be sanctioned as contempt. The Court of First Instance shall give priority to the course and dispatch of the petition of the Corporation.
(D) When a person claims that compliance with a summons, or responding to any controversy, investigation or study, or alleges that the evidence required could expose him/her to an administrative procedure, or to be dismissed or suspended from his/her employment, profession or occupation, the Corporation may guarantee, upon prior consultation with the Secretary of Justice, that the information to be furnished shall compliance not be used against said person in any administrative procedure that could entail dismissal or suspension from his/her employment, profession or occupation. When it is claimed that the information to be furnished exposes the person to a criminal or civil procedure, the Corporation may obtain, from the Court of First Instance, with the approval of the Secretary of Justice, an order through which the person is compelled to testify or furnish the required information. Once the order is issued, the person shall not refuse to collaborate, in the investigation, but his/her participation in it shall be protected according to the terms of §§ 591 et seq. of Title 1, known as the “Act for the Proceedings and Granting of Immunity to Witnesses”.
(E) Except in the cases of summary orders contemplated in clause (17)(A) of this subsection, an order shall not be rendered unless: (i) adequate prior notice is given to the corresponding persons in their place of business, or where they are personally located, or by certified mail to their last known address; (ii) the interested parties are given the opportunity to be heard; and (iii) determinations of fact and conclusions of law are formulated in writing.
(20) Provide direct financial and managerial support to the cooperatives, for which it may create, sponsor, structure, manage and/or administer funds and investment, liquidity and education programs.
(21) Perform all those acts needed to effectively achieve the purposes of this chapter.
History —Aug. 17, 2001, No. 114, § 4; Aug. 10, 2002, No. 163, § 3; Aug. 10, 2008, No. 247, § 19, eff. Feb. 1, 2009.