Every credit union must have a supervisory committee with at least three members, and the total number must be odd. Each member of this committee should already be part of the credit union and be elected by its members. Alternatively, the board of directors can set up an audit committee, which must follow the rules in Section 14556.

The supervisory committee of a credit union has several important responsibilities. They can suspend members of the credit committee, credit manager, board of directors, or any officer if they unanimously decide to do so in a specially called meeting. They can also call a meeting of the members to address violations or unsafe practices by a majority vote. Additionally, they have the authority to inspect the financial accounts and securities of the credit union.

The committee can temporarily fill any vacancies until the next annual member meeting. If a committee member misses three consecutive meetings without an excuse or is inactive for 12 months, the committee can declare that member's office vacant.

The supervisory committee of a credit union has the job of checking the credit union's rules and processes to prevent fraud and conflicts of interest. This committee must take any necessary actions to fulfill these responsibilities as outlined in related sections.

If the supervisory committee suspends any members of the credit committee, board of directors, or other officers, they must notify the members within seven days to hold a special meeting. This meeting allows members to decide on any further actions concerning the suspension.

The supervisory committee of a credit union is required to audit the credit union's books and records at least once a year. This audit includes a thorough review of the credit union's business operations and financial status.

They must report their findings, which detail the credit union's assets and liabilities, incoming and outgoing funds, to the board of directors. These reports are shared at the annual members' meeting and kept in the credit union's records.

Additionally, the committee is allowed to conduct extra inspections of the credit union's securities, cash, and accounts whenever it feels necessary. Any findings from these additional audits should also be reported to the board of directors.

This law states that a member of the supervisory committee in a credit union cannot hold any other position in the credit union, such as being on the credit committee, acting as the credit manager, being on the board of directors, or working as an employee.

If the commissioner finds that a credit union's supervisory committee is not doing its job properly, they can remove all of its members from office. Afterward, they will instruct the credit union's board of directors to hold a special meeting for members to elect a new supervisory committee, who will serve until the next annual meeting.

This section allows the board of directors to create an audit committee instead of a supervisory committee, provided they follow specific guidelines. The decision must be approved by a majority vote of the members. Once the audit committee is formed, the supervisory committee is dissolved and the credit union's bylaws are updated accordingly.

The audit committee must include at least three credit union members, and the majority must be directors. Members cannot hold certain other roles within the credit union simultaneously. The board has the power to appoint or remove audit committee members. If the audit committee fails to meet its responsibilities, a commissioner can demand changes in its composition.

The audit committee is tasked with ensuring compliance with certain sections, maintaining an effective internal audit program, and ensuring adequate training and review of the credit union’s operations. The board can dissolve the audit committee and restore the supervisory committee by another membership vote.