§ 6:667 — Conversion from federal to state and from state to federal credit union; division of assets

Louisiana § 6:667

• Jurisdiction: Louisiana
• Title 6: Banks and Banking

Text

A.(1) A federal credit union may be converted into a state credit union under this Chapter by (a) complying with all the federal requirements requisite to enabling it to convert to a credit union under this Chapter or to cease being a federal credit union, (b) filing with the commissioner proof of such compliance, satisfactory to the commissioner, and (c) filing with the commissioner an act of incorporation as provided for in R.S. 6:641.
(2) When the commissioner has been satisfied that all of the requirements, and all other requirements of this Chapter, have been complied with, the commissioner shall approve the act of incorporation. Upon such approval the federal credit union shall become a credit union under this Chapter as of the date it ceases to be a federal credit union. The credit union under this Chapter shall be vested with all of the assets and shall continue responsible for all of the obligations of the federal credit union to the same extent as though the conversion had not taken place.
B. A credit union organized under this Chapter may be converted into a federal credit union by complying with the following requirements:
(1) The proposition for such conversion shall first be approved, and a date set for a vote thereon by the members (either at a meeting to be held on such date or by written ballot to be filed on or before such date), by a majority of the directors of the credit union. Written notice of the proposition and of the date set for the vote shall then be delivered in person to each member, or mailed to each member at the address for such member appearing on the records of the credit union, not more than thirty nor less than seven days prior to such date. Approval of the proposition for conversion shall be by the affirmative vote of a majority of the members, in person or in writing.
(2) A statement of the results of the vote, verified by the affidavits of the president or vice-president, and the secretary, shall be filed with the commissioner within ten days after the vote is taken.
(3) Promptly after the vote is taken and in no event later than ninety days thereafter, if the proposition for conversion was approved by such vote, the credit union shall take such action as may be necessary under the applicable federal law to make it a federal credit union, and within ten days after receipt of the federal credit union charter there shall be filed with the commissioner a copy of the charter thus issued. Upon such filing the credit union shall cease to be a credit union organized under this Chapter.
(4) Upon ceasing to be a credit union organized under this Chapter, such credit union shall no longer be subject to any of the provisions of this Chapter. The successor federal credit union shall be vested with all of the assets and shall continue responsible for all the obligations of the credit union organized under this Chapter to the same extent as though the conversion had not taken place.
C.(1) This subsection prescribes the procedure that will enable members of a credit union organized under this chapter who are a separately identifiable group to undertake an equitable division of their assets, liabilities and capital and charter a new credit union.
(2) A credit union may undertake an equitable division of its assets, liabilities and capital when:
(a) A group of persons within the field of membership of the credit union constitutes a separately identifiable group which is eligible for a credit union charter;
(b) A sufficient number of those in the separately identifiable group have authorized transfer of their share and loan accounts to justify the division; and
(c) The other requirements of the law are met.
(3) Upon the board of directors approval of a proposition for the credit union to divide its assets, liabilities and capital between itself and a credit union to be organized to serve persons in a separately identifiable group with the existing credit union's field of membership, the board shall:
(a) Appoint a committee of at least three members of the said group to assist in the preparation and execution of a plan for division and to subscribe to articles of incorporation for the proposed new credit union; and
(b) Promptly notify the commissioner of financial institutions of these actions.
(4) The board of directors shall prepare a plan for division which shall provide that:
(a) The members within the separately identifiable group shall have the option to be exercised in writing by a specified date, of (i) authorizing the transfer of their accounts to the new credit union upon approval of its charter by the commissioner of financial institutions, or (ii) maintaining their accounts in the existing credit union, provided, however, the bylaws of the existing credit union would permit such retention.
(b) The remaining assets, liabilities and capital will be equitably divided; and
(c) The records will be closed and the division effected by a specified date, subsequent to but no later than six months after the date set for members to exercise their options as specified in this subparagraph.
(5) The board of directors shall give written notice of the options set forth in Paragraph (4) to each person who would be eligible for membership in the proposed new credit union. The written notice shall contain a summary of the plan and a form for confirmation of account balances and authorization for transfer of accounts. If authorization is given to transfer an account, it shall be valid for six months from the date fixed for the exercise of the option.
(6) If a number of members, sufficient to make the division reasonable and feasible, have authorized the transfer of their accounts by the date fixed for exercising the option to transfer, the board of directors shall submit the following information to the commissioner of financial institutions:
(a) A copy of the plan for division of assets, liabilities and capital;
(b) A current financial and statistical report;
(c) A certification of acceptance of option to transfer shares and loans; summarizing the result of the notice of option to transfer; and
(d) A schedule of the share and loan balances of all members who authorized the transfer of their accounts.
(7) An examiner will make the necessary investigation. If requirements are met and the plan appears acceptable, the examiner will assist in holding the charter-organization meeting and completing the required forms.
(8) If the commissioner of financial institutions finds that the plan for division complies with this and other parts of this chapter, he will approve the plan and authorize the board of directors of the existing credit union to present the proposal to the members for approval at an annual or special meeting as provided in Paragraph (9).
(9)(a) If the commissioner of financial institutions approves the plan for division, it may be submitted to the members at an annual meeting, if one is to be held at a time which will assure consummation of the plan within six months after the expiration of the option to transfer, or at a special meeting to be called as provided in the bylaws and held within the six month period.
(b) The notice of the meeting shall:
(i) be given to each member of the credit union;
(ii) state that one of the purposes of the meeting is to vote on the proposed plan;
(iii) advise the members of the reasons for the proposal, the fact that the commissioner of financial institutions has given his approval, the number of eligible members who have authorized the transfer of their accounts, and the membership vote required for approval; and
(iv) be accompanied by a copy of the plan for division of assets, liabilities and capital.
(c) A majority of the members present and voting at the meeting must approve the plan in order for the board of directors to proceed with the division.
(d) The board of directors will promptly certify the results of the membership vote to the commissioner of financial institutions.
(10)(a) If the plan was approved by the members of the existing credit union as provided in Paragraph (9), the commissioner of financial institutions will issue the charter to the new credit union.
(b) The division will be completed as of the date specified in the plan. Upon completion of the division, the new credit union will be vested with all assets received and will be responsible for all liabilities and capital assumed.
(c) The boards of directors for both credit unions will promptly certify the completion of the division to the commissioner of financial institutions. Financial and statistical reports for both credit unions, before and after the division, will accompany the certification.

Legislative History

Added by Acts 1966, No. 467, §4. Amended by Acts 1974, No. 598, §5.