This text of Indiana § 28-7-1-19.3 (Classification as significantly undercapitalized or lower; mandatory
supervisory requirements and restrictions; discretionary supervisory
actions; conservatorship or liquidation) is published on Counsel Stack Legal Research, covering Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
3.
(a)A credit union that is classified as
significantly undercapitalized or lower must do the following:
(1)Increase the credit union's net worth in accordance with
section 19.1 of this chapter.
(2)Submit a net worth restoration plan to the director at the time
and in the manner specified by the director.
(3)Beginning on the effective date of the credit union's
classification as significantly undercapitalized or lower, not
permit the credit union's assets to increase beyond the credit
union's assets as of the end of the preceding quarter except as
permitted under section 19.2(a)(3)(A) or 19.2(a)(3)(B) of this
chapter.
(4)Beginning on the effective date of the credit union's
classification as significantly undercapitalized or lower, not
increase the total dollar amount of member busin
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3. (a) A credit union that is classified as
significantly undercapitalized or lower must do the following:
(1) Increase the credit union's net worth in accordance with
section 19.1 of this chapter.
(2) Submit a net worth restoration plan to the director at the time
and in the manner specified by the director.
(3) Beginning on the effective date of the credit union's
classification as significantly undercapitalized or lower, not
permit the credit union's assets to increase beyond the credit
union's assets as of the end of the preceding quarter except as
permitted under section 19.2(a)(3)(A) or 19.2(a)(3)(B) of this
chapter.
(4) Beginning on the effective date of the credit union's
classification as significantly undercapitalized or lower, not
increase the total dollar amount of member business loans
(including loans outstanding and unused commitments to lend)
above the total dollar amount of member business loans
(including loans outstanding and unused commitments to lend) as
of the end of the preceding quarter.
(b) Subject to the applicable procedures for issuing, reviewing, and
enforcing directives under this chapter, the director may, by directive,
take one (1) or more of the following actions with respect to a
significantly undercapitalized credit union (or with respect to a
director, officer, or employee of such a credit union) if the director
determines that the action is necessary to carry out the purposes of
section 19(b) of this chapter:
(1) Prohibit the credit union from, directly or indirectly:
(A) acquiring any interest in any business entity or financial
institution;
(B) establishing or acquiring any additional branch office; or
(C) engaging in any new line of business;
except as permitted by the director and the credit union's share
insurer.
(2) Restrict the credit union's transactions with a credit union
service organization, or require the credit union to reduce or
divest the credit union's ownership interest in a credit union
service organization.
(3) Restrict the dividend rates that the credit union pays on shares,
as determined by the director and the credit union's share insurer.
(4) Prohibit any growth in the credit union's assets, or in a
category of assets, or require the credit union to reduce the credit
union's assets or a category of the credit union's assets.
(5) Require the credit union or the credit union's credit union
service organization to alter, reduce, or terminate any activity that
poses excessive risk to the credit union, as determined by the
director.
(6) Prohibit the credit union from accepting all or certain
nonmember deposits, as specified by the director.
(7) Order a new election of the credit union's board of directors.
(8) Require the credit union to dismiss from office one (1) or
more directors or senior executive officers. A dismissal under this
subdivision shall not be construed to be a formal administrative
action for removal.
(9) Require the credit union to employ qualified senior executive
officers, who, if the director and the credit union's share insurer
so specify, shall be subject to the approval of the director and the
credit union's share insurer.
(10) Limit the compensation of one (1) or more senior executive
officers of the credit union to that officer's average rate of
compensation (excluding bonuses and profit sharing) during the
four (4) calendar quarters preceding the effective date of the
credit union's classification as significantly undercapitalized or
lower, and prohibit the payment of a bonus or profit share to the
officer. If the director exercises the discretionary supervisory
authority authorized by this subdivision, the director may permit
the credit union to compensate a senior executive officer without
the limitations described in this subdivision, or with less stringent
limitations than those described in this subdivision, with the prior
written approval of the director and the credit union's share
insurer.
(11) Restrict or require any other action by the credit union, to the
extent the director and the credit union's share insurer determine
that the restriction or requirement will carry out the purposes of
section 19(b) of this chapter better than any of the restrictions or
requirements set forth in subdivisions (1) through (10).
(12) Require the credit union to merge with another financial
institution if one (1) or more grounds exist for placing the credit
union into conservatorship or into liquidation.
(c) Notwithstanding any other mandatory or discretionary
supervisory requirements or restrictions set forth in this section, if a
credit union is classified as significantly undercapitalized or lower
(including by reclassification in accordance with 12 CFR 702.102(b)),
the director and the credit union's share insurer may place the credit
union into conservatorship or into liquidation if the credit union has no
reasonable prospect of becoming well capitalized, as determined by the
director.