(1) (a) If it appears that
any credit union is insolvent, that it has willfully violated any provision of this article
30, or that it is operating in an unsafe or unsound manner, the commissioner may
order the credit union to show cause why its operations should not be suspended
until the insolvency, violation, or manner of operation is rectified and afford the
credit union an opportunity for a hearing not less than ten days nor more than
twenty days after the date the order is issued. The order must be in writing and
delivered by registered or certified mail. If the credit union fails to answer the order,
or if any officer or director of or attorney for the credit union fails to appear at the
time set for the hearing, the commissioner may either revoke the certificate of
incorporation of the credit union or order the immediate suspension of operations of
the credit union, except for the collection of payments on outstanding loans or
other obligations due to the credit union, or both, and may enforce the order by an
action filed in the district court of the judicial district where the principal office of
the credit union is located, seeking to enjoin further operations or to appoint a
receiver for the credit union.
(b) Any credit union to which an order to show cause has been issued
pursuant to paragraph (a) of this subsection (1) may include with any answer or may
present at any hearing resulting from such order its proposed plan to continue
operations and rectify the insolvency, violation, or manner of operation specified in
said order; or the credit union may request that it be dissolved and liquidated and a
liquidating agent be appointed by the commissioner. Any credit union may request a
stay of execution of any order of the commissioner revoking its certificate of
incorporation or suspending its operations by filing an action in the district court for
the judicial district in which the principal office of the credit union is located, within
ten days after the issuance of such order.
(c) If the commissioner revokes the charter of the credit union, the
commissioner shall appoint a liquidating agent to liquidate the assets of the credit
union pursuant to subsection (3) of this section.
(d) If in the opinion of the board an emergency exists which may result in
serious losses to the members, the board may revoke the charter of a credit union
and immediately appoint a liquidating agent without notice or a hearing. Notice of
the board's emergency determination shall be posted on the premises of the credit
union that is the subject of the determination. Within ten days after an emergency
determination by the board, the credit union or the directors of the credit union may
file an application with the board to rescind such determination. The filing of an
application to rescind a determination shall not act as a stay of the board's action
pursuant to this subsection (1). The board shall grant the application if it finds that
its action was unauthorized and upon granting an application shall rescind its action
and restore the credit union to its board of directors. If no application is filed within
ten days after the board's emergency determination, all action taken by the board
shall be final.
(1.5) (a) The commissioner may appoint himself or herself or a third party as
conservator of any credit union and immediately take possession and control of the
business and assets of the credit union if the commissioner determines that:
(I) Such action is necessary to conserve the assets of the credit union or to
protect the interests of its members from acts or omissions of the existing
management;
(II) The credit union, by a resolution of its board of directors, consents to
such action;
(III) There is a willful violation of a cease-and-desist order that results in the
credit union being operated in an unsafe or unsound manner; or
(IV) The credit union is significantly undercapitalized and has no reasonable
prospect of becoming adequately capitalized.
(b) The commissioner may appoint a conservator and take immediate
possession of the credit union without prior notice or a hearing; except that, within
ten days after the conservator is appointed, the credit union may file an appeal with
the board requesting the board to rescind the commissioner's appointment of a
conservator. Upon receipt of a timely appeal, the board shall set a date for a
hearing and determine whether the commissioner's appointment should be
rescinded; except that such appeal shall not act as a stay of the commissioner's
action. If the board finds the commissioner's action was unauthorized, the board
shall restore control of the credit union to its board of directors. If no appeal is filed
within ten days after the commissioner's appointment of a conservator, any action
taken by the commissioner shall be final.
(c) In extraordinary circumstances, upon order of the board, any hearing
conducted pursuant to this subsection (1.5) shall be exempt from any provision of
law requiring that proceedings of the board be conducted publicly. Such
extraordinary circumstances occur when specific concern arises about prompt
withdrawal of moneys from the credit union.
(d) The conservator shall have all the powers of the members, directors,
officers, and committees of the credit union and shall be authorized to operate the
credit union in its own name or to conserve its assets as directed by the
commissioner. The conservator shall conduct the business of the credit union and
make regular reports to the commissioner until such time as the commissioner has
determined that the purposes of conservatorship have been accomplished and the
credit union should be returned to the control of its board of directors. All costs
incident to the conservatorship shall be paid out of the assets of the credit union. If
the commissioner determines that the purposes of the conservatorship will not be
accomplished, the commissioner may proceed with the involuntary liquidation of
the credit union in the manner described in subsection (1) of this section.
(e) If a conservator is appointed, and is other than the national credit union
administration, another approved insurer, or an employee of the division of financial
services, the conservator and any assistants shall provide a bond, payable to the
credit union and executed by a surety company authorized to do business in this
state, which meets with the approval of the financial services board, for the faithful
discharge of their duties in connection with such conservatorship and the
accounting for all moneys coming into their hands. The cost of such bond shall be
paid from the assets of the credit union. Suit may be maintained on such bond by
any person injured by a breach of the conditions thereof. This requirement may be
deemed met if the financial services board determines that the credit union's
fidelity bond covers the conservator and any assistants.
(2) Any credit union may be voluntarily dissolved and liquidated upon
majority vote of the entire membership of the credit union at a meeting especially
called for that purpose or at the annual meeting where notice of the proposed
action is mailed to the members at least thirty days before the meeting. In either
event, a copy of the notice shall be delivered to the commissioner not less than ten
days before the meeting. Any member of a credit union may cast the member's
ballot for or against the dissolution and liquidation by mail within twenty days after
the meeting. If a majority of the members of the credit union vote in favor of
dissolution and liquidation, the board of directors, within five days after the close of
voting, shall notify the commissioner of the action and specify the names and
addresses of the directors and officers of the credit union who will conduct the
dissolution and liquidation of the credit union. Upon the favorable vote, the credit
union shall cease to do business except for the collection of payments on
outstanding loans or other obligations due to the credit union.
(3) Under any procedure to dissolve and liquidate a credit union pursuant to
subsection (1) or (2) of this section, the credit union shall continue in existence for
the purpose of discharging its debts, collecting and distributing its assets, and
doing all acts required in order to wind up its business, and it may sue and be sued
for the enforcement of its debts and operations until its affairs are fully adjusted in
liquidation. The assets of the credit union shall be used to pay: First, the expenses
incidental to liquidation; second, liabilities due nonmembers; and third, deposits and
savings club accounts. Any remaining assets shall be distributed to the members
proportionately to the shares held by each member as of the date of dissolution.
(4) Upon the liquidation and distribution of all assets of the credit union
which may be reasonably expected to be collectible, the board of directors or the
liquidating agent, as the case may be, shall execute in duplicate a certificate of
dissolution, prescribed by the commissioner, upon which date the credit union shall
cease to exist, and file the same with the secretary of state.