§ 32-2-1002 — Grounds For Closing Mutual Association

32-2-1002 . Grounds for closing mutual association. (1) If it appears to the department that any of the following situations have occurred, the department may, in its discretion, close the mutual association and take possession of all of the books, records, assets, and business of every description of the mutual association and hold and retain possession of them until the mutual association is authorized by the department to resume business or until its affairs are liquidated as provided in this chapter, and it shall do so in cases in which a mutual association comes into its possession voluntarily or in the manner provided by law. The situations are as follows:
(a) a mutual association has willfully violated its charter or a law of this state;
(b) a mutual association has willfully violated a general rule of the department, made in accordance with law;
(c) the capital of a mutual association is impaired or for any reason is below the amount required by state or federal law and has not been made good after notice, as provided by law, or, without that notice, in the event a majority of the board of directors of the mutual association notifies the department in writing that the impairment cannot be made good;
(d) a mutual association cannot meet or has failed to meet its liabilities as they become due in the regular course of business;
(e) a mutual association's reserve has fallen below the amount required by state or federal law and it has failed to make good that reserve within 30 days after being requested to do so by the department, without that notice, if a majority of the directors, in writing, notifies the department that the reserve cannot be made good within 30 days or if is continually allowing its reserve to fall below the required amount;
(f) a mutual association is conducting business in an unsafe and unauthorized manner or is in an unsafe and unsound condition;
(g) a mutual association has refused to submit its papers, books, and concerns to the inspection of the department; or
(h) an officer of a mutual association has refused to be examined under oath regarding the affairs, business, or concerns of any mutual association as they relate to solvency or matters having to do with the supervision by the department.
(2) The powers and authority conferred on the department by this section, except in cases of voluntary surrender, are discretionary and not mandatory. As long as the department acts in good faith, the department and its employees and agents may not be held liable civilly or criminally or on their official bonds for action taken under this section or for any failure to act under it.

Legislative History

En. Sec. 89, Ch. 431, L. 2021.