§ 58-11-59 — Merger of credit unions

New Mexico § 58-11-59

• Jurisdiction: New Mexico
• Ch. 58: Financial Institutions and Regulations
• Art. 11: Credit Unions

Text

A. A credit union organized under or subject to the Credit Union Act may, with the approval of the director and regardless of common bond, merge with one or more other credit unions subject to that act, the laws of another state or territory of the United States or the laws of the United States. B. When two or more credit unions merge, they shall either designate one credit union as the continuing credit union or they shall structure a totally new credit union and designate it as the new credit union. If the latter procedure is followed, the new credit union shall be organized under Section 58-11-10 NMSA 1978. All participating credit unions other than the continuing credit union shall be designated as merging credit unions. C. Any merger of credit unions shall be done according to a plan of merger. After approval by the boards of directors of all participating credit unions, the plan shall be submitted to the director for preliminary approval. If the plan includes the creation of a new credit union, all documents required by Section 58-11-10 NMSA 1978 shall be submitted as part of the plan. In addition, each participating credit union shall submit: (1) the time and place of the meeting of the board of directors at which the plan was agreed upon; (2) the vote of the board of directors in favor of the adoption of the plan; and (3) a copy of the resolution or other action by which the plan was agreed upon. The director shall grant preliminary approval if the plan has been properly approved by each board of directors and if the documentation required to form a new credit union, if any, complies with Section 58-11-10 NMSA 1978. D. After the director grants preliminary approval, each merging credit union shall, unless waived by the director, conduct a membership vote on its participation in the plan. The vote shall be conducted either at a special membership meeting called for that purpose or by mail ballot. If a majority of the members voting approve the plan, the credit union shall submit a record of that fact to the director, indicating the vote by which the members approved the plan and either the time and place of the membership meeting or the mailing date and closing date of the mail ballot. E. The director may waive the membership vote described in Subsection D of this section in the case of a given credit union if he determines that it is in the best interests of the membership or that the credit union is insolvent or in imminent danger of becoming insolvent. F. The director shall grant final approval of the plan of merger after determining that the requirements of Subsection D of this section in the case of each merging credit union have been met. If the plan of merger includes the creation of a new credit union, the director shall approve the organization of the new credit union under Section 58-11- 10 NMSA 1978 as part of the approval of the plan of merger. The director shall notify all participating credit unions of the approval of the plan. G. Upon final approval of the plan by the director, all property, property rights and members' interests in each merging credit union shall vest in the continuing or new credit union, as applicable, without deed, endorsement or other instrument of transfer, and all debts, obligations and liabilities of each merging credit union shall be deemed to have been assumed by the continuing or new credit union. The rights and privileges of the members of each participating credit union shall remain intact; however, if a person is a member of more than one of the participating credit unions, that person shall be entitled to only a single set of membership rights in the continuing or new credit union. H. If the continuing or new credit union is chartered by another state or territory of the United States, it shall be subject to the requirement of Section 58-11-16 NMSA 1978. I. Notwithstanding any other provision of law, the director may authorize a merger or consolidation of a credit union that is insolvent or is in danger of insolvency with any other credit union or may authorize a credit union to purchase any of the assets of or assume any of the liabilities of any other credit union that is insolvent or in danger of insolvency if the director is satisfied that: (1) an emergency requiring expeditious action exists with respect to that other credit union; (2) other alternatives are not reasonably available; and (3) the public interest would best be served by approval by that merger, consolidation, purchase or assumption. J. Notwithstanding any other provision of law, the director may authorize an institution whose deposits or accounts are insured by an agency of the federal government to purchase any of the assets of or assume any of the liabilities of a credit union which is insolvent or in danger of insolvency, except that prior to exercising this authority, the director shall attempt to effect a merger or consolidation with, or purchase and assumption by, another credit union as provided in Subsection I of this section. For purposes of the authority contained in this subsection, insured share and deposit accounts of the credit union may, upon consummation of the purchase and assumption, be converted to insured deposits or other comparable accounts in the acquiring institution.

Legislative History

Laws 1987, ch. 311, § 59; 1991, ch. 51, § 19; 1997, ch. 195, § 38.