Could the Louisiana Credit Union League organize as an LLC even though LLCs could not be formed for banking?

Plain-English summary

A legislator asked whether the Louisiana Credit Union League could organize as a limited liability company. In 2000, the attorney general's office said yes, provided the league was not formed for the purpose of banking. Louisiana's LLC statute barred forming an LLC for banking, and the opinion looked to banking definitions and powers to assess the league's described activities.

The requester said the league was a service organization made up of state-chartered credit unions, not a bank. It did not receive deposits, make loans, or distribute profits to depositors. The office's answer relied on that description and the condition that the LLC would not be formed to conduct banking.

Currency note

This opinion was issued in 2000. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Credit union league officers at the time

The opinion allowed the league to choose LLC form on the facts given, subject to the statutory bar on forming an LLC for banking.

Trade associations at the time

The office did not say that members' status as credit unions automatically made the league itself a bank. It considered the league's described activity as a service organization.

Banking regulators at the time

The opinion listed banking characteristics such as accepting deposits and lending money, and compared them with the league's description. Its conclusion was conditional on the league's actual purpose.

Common questions

Q: Did credit union membership make the league a bank?
A: The opinion said the league itself was described as a service organization, not a bank, and noted that it took no deposits and made no loans.

Q: Could the league form a Louisiana LLC?
A: Yes, provided it was not formed for the purpose of banking.

Q: What LLC restriction controlled the answer?
A: The opinion cited La. R.S. 12:1302, which barred formation of an LLC for banking under the law then in effect.

Background and statutory framework

The office read the LLC formation provisions with La. R.S. 12:1302's banking restriction and the banking definitions and powers in La. R.S. 6:333 and La. R.S. 6:242. It applied those rules to the league as described in the legislative request.

Citations and references

• La. R.S. 12:1302 (LLC banking restriction)
• La. R.S. 6:333 (bank definition)
• La. R.S. 6:242 (banking powers)
• La. R.S. 12:1301, et seq. (LLC organization law)

Source

• Landing page: https://www.ag.state.la.us/Opinions
• Original PDF: https://www.ag.state.la.us/Opinion/Download/00-0434

Original opinion text

December 5, 2000
OPINION NUMBER 00-434

13 A CORPORATIONS
Representative Michael Jackson 6 BANKS & BANKING
La. R.S. 6:333
State Representative, District #61 La. R.S. 12:1301, et seq 4551 Gus Young Avenue
Baton Rouge, Louisiana 70802
Louisiana Credit Union League may organize itself
as a limited liability company provided it is not formed for the purpose of banking.
Dear Representative Jackson:

We received your request for an opinion regarding the Louisiana Credit Union League. You specifically inquire if the Louisiana Credit Union League may organize itself as a limited liability company pursuant to La. R.S. 12:1301, et seq.

A limited liability company is an unincorporated entity organized under La. R.S. 12:1301, et seq. Pursuant to La. R.S. 12:1302, a limited liability company shall not be formed for the purpose of banking.

A bank, as defined in La. R.S. 6:333, is any state bank, national bank or entity organized to engage in the business of banking and includes a savings bank, a savings and loan association, a company issuing credit cards or any other business offering credit. Banking powers are outlined in La. R.S. 6:242 and include receiving and paying deposits, with or without interest; paying checks; lending money at interest on a secured or unsecured basis; issuing letters of credit; discounting, buying and selling promissory notes, bills of exchange of other evidences of indebtness, gold and silver bonds of the United States, of this state and of the several levee districts, parishes, etc.

You indicate in your request that the Louisiana Credit Union League, an unincorporated entity, is made up of member, state-chartered credit unions. It is not a bank but rather a credit union service organization. It receives no deposits and does not make loans or distribute profits to depositors.

Therefore, it is our opinion that provided the Louisiana Credit Union League is not formed for the purpose of banking, it may organize itself as a limited liability company pursuant to the provisions of La. R. S. 12:1301, et seq.

Page 2

Representative Michael Jackson
Opinion No. 00-434
Page 2

If you have any questions or comments, please do not hesitate to call our office.

With kindest regards,

Very truly yours,

RICHARD P. IEYOUB
ATTORNEY GENERAL

BY: ____
TINA VICARI GRANT
ASSISTANT ATTORNEY GENERAL

RPI/TVG/crt

Page 3

OPINION NUMBER 00-434

SYLLABUS

13 A CORPORATIONS
6 BANKS & BANKING

La. R.S. 6:333
La. R.S. 12:1301, et seq

Louisiana Credit Union League may organize itself as a limited liability company provided it is not formed for the purpose of banking.

Representative Michael Jackson
State Representative, District #61
4551 Gus Young Avenue
Baton Rouge, Louisiana 70802

DATE RECEIVED: 10/26/00

DATE RELEASED: December 5, 2000

AUTHOR: TINA VICARI GRANT
ASSISTANT ATTORNEY GENERAL