§ 6.2-1313 — Powers of Commission in case of nonobservance of law, noncompliance with orders, insufficient reserves, or approaching insolvency; appointment of receiver

Virginia § 6.2-1313

• Jurisdiction: Virginia
• Title 6.2: Financial Institutions and Services
• Subtitle II: Depository Institutions and Trust Organizations
• Ch. 13: Credit Unions
• Art. 2: SUPERVISION AND REGULATION

Text

A. If the Commission finds that (i) a credit union is in violation of a law or regulation applicable to it, (ii) a credit union is being operated in an unsafe or unsound manner, (iii) a credit union has failed to comply with a lawful order of the Commissioner, (iv) the reserve of the credit union fails to meet the requirements set forth in § 6.2-1377, or (v) a credit union is, or is about to become, insolvent, it shall give immediate notice of its finding to the officers and directors of the credit union. If necessary to conserve the assets of the credit union or protect the interests of the members of the credit union, the Commission may, after reasonable notice to the credit union and an opportunity for it to be heard, do any one or more of the following:

1. Close the credit union for a period not exceeding 60 days, which period may be extended for additional like periods as the Commission may deem necessary;

2. Require the officers and directors of the credit union to liquidate outstanding loans;

3. Require that all lawful orders of the Commission be complied with;

4. Require the credit union to make reports daily or otherwise as to the results achieved in carrying out its orders;

5. Temporarily suspend the right of such credit union to receive any further investment in its share accounts;

6. Grant the right to suspend or limit withdrawals against share accounts for such period as the Commission may deem necessary; and

7. Appoint a conservator to take charge of the credit union and operate it pending further action by the Commission.

B. If the Commission determines that (i) a credit union is approaching insolvency and no reasonable prospect for rehabilitation of the credit union exists, (ii) the Commission deems it necessary with respect to any credit union for the protection of the public interest, or (iii) a credit union has a net worth ratio of less than two percent, the Commission may close the doors of the credit union without any notice, take charge of the books, assets, and affairs of the credit union, and apply to the Circuit Court of the City of Richmond for the appointment of a receiver to take charge of the credit union's business and assets. In the case of a federally insured credit union, the court shall appoint the National Credit Union Administration Board as receiver if it finds that the National Credit Union Administration Board is willing to accept the appointment. In the case of a credit union that is not federally insured, the court shall appoint a receiver if it finds that to do so will be in the public interest.

C. As used in this article, "insolvent" or "insolvency" means that (i) a credit union is incapable of meeting the current demands of creditors or (ii) the current value of a credit union's assets is less than the current value of the sum of its share accounts and liabilities.

Legislative History

1975, c. 34, § 6.1-200.2; 1988, c. 309; 1990, c. 373, § 6.1-225.8; 2010, c. 794; 2018, c. 257.