(a) The Administratorof Credit Unions may determine in the performance of his duties under thisSubchapter that a credit union is insolvent or in imminent danger of insolvency,or that an officer, director, or employee of a credit union, or the creditunion itself, acting by and through an officer, director, or employee, has:
(1) Affected or islikely to affect the safety or soundness of the credit union by a violation of:
a. This Subchapter,
b. A rule adopted underthis Subchapter, or
c. Any federal law orregulation applicable to credit unions;
(2) Violated, neglected,or refused to comply with a duly issued final order of the Administrator ofCredit Unions or the Credit Union Commission;
(3) Refused to submit toexamination under oath, or to permit examination of the credit union's books,papers, records, accounts, and affairs by the Administrator of Credit Unions orhis duly authorized representative;
(4) Failed or refused toauthorize and direct any other person to permit the inspection and examinationof the credit union's books, papers, records, or accounts in the other person'scare, possession, custody, or control by the Administrator of Credit Unions ora duly authorized representative of the Administrator, after the Administratorhas requested the granting of that authority and direction to the other person;or
(5) Affected or islikely to affect the safety or soundness of the credit union by conducting thecredit union's business in an unauthorized or unlawful manner.
(b) If theAdministrator of Credit Unions makes any of these findings, he may issue anorder temporarily suspending the credit union's operations for not more than 90days or, if the Administrator determines that the findings are of such severitythat immediate affirmative action is needed to prevent further dissipation ofthe assets of the credit union, the Administrator may immediately issue anorder of conservation and appoint a conservator to manage the affairs of thecredit union. Service of the order of suspension or the order of conservationmust be by certified or registered mail, addressed to the credit union at thelast known address of its principal office, or by delivery to an officer or directorof the credit union. Service by mail is complete upon the deposit of thepaper, enclosed in a postpaid, properly addressed wrapper, in a post office orofficial depository under the care and custody of the United States PostalService. The order must clearly state the grounds for suspension orconservation.
(c) After aconservation order has been served on the credit union, the Administrator ofCredit Unions shall take possession and control of the books, records,property, assets, and business of the credit union. Upon the service of thesuspension order, the credit union shall cease all operations, except thoseauthorized by the Administrator and conducted under his supervision. Not laterthan 15 days after the date an order of suspension or conservation is served,the board of directors shall file a written reply to the order. They may filea written request for a hearing to present to the Administrator a plan tocontinue operations under the control of the board of directors setting outproposed corrective actions. Under an order of suspension, the board ofdirectors may request that a conservator be appointed for the credit union orthat the credit union be closed or merged or that a liquidating agent beappointed, and may waive rights to further appeal. In that event, theAdministrator may immediately appoint a conservator, or order that the creditunion be liquidated and appoint a liquidating agent. Under an order ofconservation, the board of directors may consent to the conservatorship andwaive rights to further appeals.
(d) If the board ofdirectors files its reply and requests a hearing as provided by subsection (c),the Administrator of Credit Unions shall set and hold the hearing not less than10 nor more than 30 days after the date of receipt of such a request. Notlater than 10 days before the hearing, the Administrator shall give notice tothe credit union of the date, time, and place of the hearing. Not later than10 days after the earlier of the date of conclusion of the hearing or the dateon which the suspension expires, the Administrator shall (i) adopt the plan tocontinue operations under the control of the board of directors presented bythe credit union, (ii) agree with the credit union on an alternative plan tocontinue operations under the control of the board of directors or otherappropriate measures, (iii) reject the plan to continue operations under thecontrol of the board of directors and issue an order of conservation appointinga conservator, (iv) continue a previous order of conservation, or (v) issue anorder of liquidation ordering that the credit union be closed, ordering thatits affairs and business be liquidated, and appointing a liquidating agent.
(e) If theAdministrator of Credit Unions rejects the credit union's plan to continueoperations and determines that it is in the public interest and in the bestinterest of the members, depositors, and creditors of the credit union torehabilitate the credit union, he may permit the credit union to operate under hisdirection and control, and shall issue an order of conservation appointing aconservator to manage the affairs of the credit union. The Administrator shallserve the order of conservation in the same manner as provided for service ofan order of suspension.
(f) The conservator,on behalf and under the supervision and direction of the Administrator ofCredit Unions, shall take charge of the books, records, property, assets, andbusiness of the credit union and shall conduct the business and affairs of thecredit union under the direction and supervision of the Administrator. Theconservator shall take steps toward the removal of the causes and conditionsthat have necessitated the order that the Administrator directs. During theconservatorship, the conservator shall make reports to the Administrator fromtime to time as the Administrator requires. The conservator shall take allnecessary measures to preserve, protect, and recover the assets or property ofthe credit union, including claims or causes of action belonging to or that maybe asserted by the credit union. In addition, the conservator may deal withthat property in his own name as conservator and may file, prosecute, or defendagainst a suit by or against the credit union if the conservator considers thisaction necessary to protect the interested parties or property affected by thesuit.
(g) The Administratorof Credit Unions shall determine the cost incident to the conservatorship. Thecost is a charge against the assets and funds of the credit union, and shall bepaid as the Administrator directs.
(h) A suit filedagainst a credit union or its conservator while a conservatorship order is ineffect must be brought in a court of proper jurisdiction in Wake County. Theconservator may file suit in a court of proper jurisdiction in Wake Countyagainst any person for the purpose of preserving, protecting, or recoveringassets or property of the credit union, including a claim or cause of actionbelonging to or that may be asserted by the credit union.
(i) The conservatorshall serve for the period necessary to accomplish the purposes ofconservatorship consistent with the intent of this section. If the creditunion is rehabilitated, it shall be returned to the management of the board ofdirectors under the terms that are reasonable and necessary to preventrecurrence of the conditions that occasioned the conservatorship.
(j) If theAdministrator of Credit Unions determines that the credit union inconservatorship is not in a condition to continue business and cannot berehabilitated as provided by this section, he shall issue, as he deemsappropriate, either an order of merger or an order of liquidation, appointing aliquidating agent.
(k) If, after a hearingunder this section, the board of directors of the credit union is dissatisfiedwith the decision of the Administrator of Credit Unions, the board may appealto the Credit Union Commission by filing with the Administrator a writtenappeal, including a duly certified resolution of the board, not later than 10days after the day that the Administrator's order is served. If the appeal isduly filed, the Administrator shall set a date for a hearing on the appeal notmore than 30 days after the date on which the appeal is filed. TheAdministrator shall promptly give notice of the date, time, and place of thehearing to the credit union and any other interested party. The filing of anappeal does not suspend the effect of the order of the conservation and thisorder remains in force pending final disposition of the appeal by theCommission. At the conclusion of the hearing, the Commission may reverse theorder of the Administrator and adopt and approve the credit union's plan tocontinue operations, affirm the Administrator's order of conservation, or orderthat other appropriate action be taken.
(l) If the board ofdirectors of the credit union does not file a reply to the order of suspensionor an order of conservation as required by this section or fails to request andappear at the hearing provided for by this section, the Administrator of CreditUnions may dispose of the matter as he considers appropriate. The credit unionis presumed to have consented to the action and may not contest it.
(m) The period ofsuspension and the date and time of the hearings provided for by this sectionmay be extended by agreement of the parties and the Administrator of CreditUnions.
(n) The Administratorof Credit Unions shall notify the members of the Credit Union Commission of anysuspension. (1975, c. 538, s. 1; 1977, c. 559, s. 9; 1989, c. 72.)
(a) The Administratorof Credit Unions may determine in the performance of his duties under thisSubchapter that a credit union is insolvent or in imminent danger of insolvency,or that an officer, director, or employee of a credit union, or the creditunion itself, acting by and through an officer, director, or employee, has:
(1) Affected or islikely to affect the safety or soundness of the credit union by a violation of:
a. This Subchapter,
b. A rule adopted underthis Subchapter, or
c. Any federal law orregulation applicable to credit unions;
(2) Violated, neglected,or refused to comply with a duly issued final order of the Administrator ofCredit Unions or the Credit Union Commission;
(3) Refused to submit toexamination under oath, or to permit examination of the credit union's books,papers, records, accounts, and affairs by the Administrator of Credit Unions orhis duly authorized representative;
(4) Failed or refused toauthorize and direct any other person to permit the inspection and examinationof the credit union's books, papers, records, or accounts in the other person'scare, possession, custody, or control by the Administrator of Credit Unions ora duly authorized representative of the Administrator, after the Administratorhas requested the granting of that authority and direction to the other person;or
(5) Affected or islikely to affect the safety or soundness of the credit union by conducting thecredit union's business in an unauthorized or unlawful manner.
(b) If theAdministrator of Credit Unions makes any of these findings, he may issue anorder temporarily suspending the credit union's operations for not more than 90days or, if the Administrator determines that the findings are of such severitythat immediate affirmative action is needed to prevent further dissipation ofthe assets of the credit union, the Administrator may immediately issue anorder of conservation and appoint a conservator to manage the affairs of thecredit union. Service of the order of suspension or the order of conservationmust be by certified or registered mail, addressed to the credit union at thelast known address of its principal office, or by delivery to an officer or directorof the credit union. Service by mail is complete upon the deposit of thepaper, enclosed in a postpaid, properly addressed wrapper, in a post office orofficial depository under the care and custody of the United States PostalService. The order must clearly state the grounds for suspension orconservation.
(c) After aconservation order has been served on the credit union, the Administrator ofCredit Unions shall take possession and control of the books, records,property, assets, and business of the credit union. Upon the service of thesuspension order, the credit union shall cease all operations, except thoseauthorized by the Administrator and conducted under his supervision. Not laterthan 15 days after the date an order of suspension or conservation is served,the board of directors shall file a written reply to the order. They may filea written request for a hearing to present to the Administrator a plan tocontinue operations under the control of the board of directors setting outproposed corrective actions. Under an order of suspension, the board ofdirectors may request that a conservator be appointed for the credit union orthat the credit union be closed or merged or that a liquidating agent beappointed, and may waive rights to further appeal. In that event, theAdministrator may immediately appoint a conservator, or order that the creditunion be liquidated and appoint a liquidating agent. Under an order ofconservation, the board of directors may consent to the conservatorship andwaive rights to further appeals.
(d) If the board ofdirectors files its reply and requests a hearing as provided by subsection (c),the Administrator of Credit Unions shall set and hold the hearing not less than10 nor more than 30 days after the date of receipt of such a request. Notlater than 10 days before the hearing, the Administrator shall give notice tothe credit union of the date, time, and place of the hearing. Not later than10 days after the earlier of the date of conclusion of the hearing or the dateon which the suspension expires, the Administrator shall (i) adopt the plan tocontinue operations under the control of the board of directors presented bythe credit union, (ii) agree with the credit union on an alternative plan tocontinue operations under the control of the board of directors or otherappropriate measures, (iii) reject the plan to continue operations under thecontrol of the board of directors and issue an order of conservation appointinga conservator, (iv) continue a previous order of conservation, or (v) issue anorder of liquidation ordering that the credit union be closed, ordering thatits affairs and business be liquidated, and appointing a liquidating agent.
(e) If theAdministrator of Credit Unions rejects the credit union's plan to continueoperations and determines that it is in the public interest and in the bestinterest of the members, depositors, and creditors of the credit union torehabilitate the credit union, he may permit the credit union to operate under hisdirection and control, and shall issue an order of conservation appointing aconservator to manage the affairs of the credit union. The Administrator shallserve the order of conservation in the same manner as provided for service ofan order of suspension.
(f) The conservator,on behalf and under the supervision and direction of the Administrator ofCredit Unions, shall take charge of the books, records, property, assets, andbusiness of the credit union and shall conduct the business and affairs of thecredit union under the direction and supervision of the Administrator. Theconservator shall take steps toward the removal of the causes and conditionsthat have necessitated the order that the Administrator directs. During theconservatorship, the conservator shall make reports to the Administrator fromtime to time as the Administrator requires. The conservator shall take allnecessary measures to preserve, protect, and recover the assets or property ofthe credit union, including claims or causes of action belonging to or that maybe asserted by the credit union. In addition, the conservator may deal withthat property in his own name as conservator and may file, prosecute, or defendagainst a suit by or against the credit union if the conservator considers thisaction necessary to protect the interested parties or property affected by thesuit.
(g) The Administratorof Credit Unions shall determine the cost incident to the conservatorship. Thecost is a charge against the assets and funds of the credit union, and shall bepaid as the Administrator directs.
(h) A suit filedagainst a credit union or its conservator while a conservatorship order is ineffect must be brought in a court of proper jurisdiction in Wake County. Theconservator may file suit in a court of proper jurisdiction in Wake Countyagainst any person for the purpose of preserving, protecting, or recoveringassets or property of the credit union, including a claim or cause of actionbelonging to or that may be asserted by the credit union.
(i) The conservatorshall serve for the period necessary to accomplish the purposes ofconservatorship consistent with the intent of this section. If the creditunion is rehabilitated, it shall be returned to the management of the board ofdirectors under the terms that are reasonable and necessary to preventrecurrence of the conditions that occasioned the conservatorship.
(j) If theAdministrator of Credit Unions determines that the credit union inconservatorship is not in a condition to continue business and cannot berehabilitated as provided by this section, he shall issue, as he deemsappropriate, either an order of merger or an order of liquidation, appointing aliquidating agent.
(k) If, after a hearingunder this section, the board of directors of the credit union is dissatisfiedwith the decision of the Administrator of Credit Unions, the board may appealto the Credit Union Commission by filing with the Administrator a writtenappeal, including a duly certified resolution of the board, not later than 10days after the day that the Administrator's order is served. If the appeal isduly filed, the Administrator shall set a date for a hearing on the appeal notmore than 30 days after the date on which the appeal is filed. TheAdministrator shall promptly give notice of the date, time, and place of thehearing to the credit union and any other interested party. The filing of anappeal does not suspend the effect of the order of the conservation and thisorder remains in force pending final disposition of the appeal by theCommission. At the conclusion of the hearing, the Commission may reverse theorder of the Administrator and adopt and approve the credit union's plan tocontinue operations, affirm the Administrator's order of conservation, or orderthat other appropriate action be taken.
(l) If the board ofdirectors of the credit union does not file a reply to the order of suspensionor an order of conservation as required by this section or fails to request andappear at the hearing provided for by this section, the Administrator of CreditUnions may dispose of the matter as he considers appropriate. The credit unionis presumed to have consented to the action and may not contest it.
(m) The period ofsuspension and the date and time of the hearings provided for by this sectionmay be extended by agreement of the parties and the Administrator of CreditUnions.
(n) The Administratorof Credit Unions shall notify the members of the Credit Union Commission of anysuspension. (1975, c. 538, s. 1; 1977, c. 559, s. 9; 1989, c. 72.)
(a) The Administratorof Credit Unions may determine in the performance of his duties under thisSubchapter that a credit union is insolvent or in imminent danger of insolvency,or that an officer, director, or employee of a credit union, or the creditunion itself, acting by and through an officer, director, or employee, has:
(1) Affected or islikely to affect the safety or soundness of the credit union by a violation of:
a. This Subchapter,
b. A rule adopted underthis Subchapter, or
c. Any federal law orregulation applicable to credit unions;
(2) Violated, neglected,or refused to comply with a duly issued final order of the Administrator ofCredit Unions or the Credit Union Commission;
(3) Refused to submit toexamination under oath, or to permit examination of the credit union's books,papers, records, accounts, and affairs by the Administrator of Credit Unions orhis duly authorized representative;
(4) Failed or refused toauthorize and direct any other person to permit the inspection and examinationof the credit union's books, papers, records, or accounts in the other person'scare, possession, custody, or control by the Administrator of Credit Unions ora duly authorized representative of the Administrator, after the Administratorhas requested the granting of that authority and direction to the other person;or
(5) Affected or islikely to affect the safety or soundness of the credit union by conducting thecredit union's business in an unauthorized or unlawful manner.
(b) If theAdministrator of Credit Unions makes any of these findings, he may issue anorder temporarily suspending the credit union's operations for not more than 90days or, if the Administrator determines that the findings are of such severitythat immediate affirmative action is needed to prevent further dissipation ofthe assets of the credit union, the Administrator may immediately issue anorder of conservation and appoint a conservator to manage the affairs of thecredit union. Service of the order of suspension or the order of conservationmust be by certified or registered mail, addressed to the credit union at thelast known address of its principal office, or by delivery to an officer or directorof the credit union. Service by mail is complete upon the deposit of thepaper, enclosed in a postpaid, properly addressed wrapper, in a post office orofficial depository under the care and custody of the United States PostalService. The order must clearly state the grounds for suspension orconservation.
(c) After aconservation order has been served on the credit union, the Administrator ofCredit Unions shall take possession and control of the books, records,property, assets, and business of the credit union. Upon the service of thesuspension order, the credit union shall cease all operations, except thoseauthorized by the Administrator and conducted under his supervision. Not laterthan 15 days after the date an order of suspension or conservation is served,the board of directors shall file a written reply to the order. They may filea written request for a hearing to present to the Administrator a plan tocontinue operations under the control of the board of directors setting outproposed corrective actions. Under an order of suspension, the board ofdirectors may request that a conservator be appointed for the credit union orthat the credit union be closed or merged or that a liquidating agent beappointed, and may waive rights to further appeal. In that event, theAdministrator may immediately appoint a conservator, or order that the creditunion be liquidated and appoint a liquidating agent. Under an order ofconservation, the board of directors may consent to the conservatorship andwaive rights to further appeals.
(d) If the board ofdirectors files its reply and requests a hearing as provided by subsection (c),the Administrator of Credit Unions shall set and hold the hearing not less than10 nor more than 30 days after the date of receipt of such a request. Notlater than 10 days before the hearing, the Administrator shall give notice tothe credit union of the date, time, and place of the hearing. Not later than10 days after the earlier of the date of conclusion of the hearing or the dateon which the suspension expires, the Administrator shall (i) adopt the plan tocontinue operations under the control of the board of directors presented bythe credit union, (ii) agree with the credit union on an alternative plan tocontinue operations under the control of the board of directors or otherappropriate measures, (iii) reject the plan to continue operations under thecontrol of the board of directors and issue an order of conservation appointinga conservator, (iv) continue a previous order of conservation, or (v) issue anorder of liquidation ordering that the credit union be closed, ordering thatits affairs and business be liquidated, and appointing a liquidating agent.
(e) If theAdministrator of Credit Unions rejects the credit union's plan to continueoperations and determines that it is in the public interest and in the bestinterest of the members, depositors, and creditors of the credit union torehabilitate the credit union, he may permit the credit union to operate under hisdirection and control, and shall issue an order of conservation appointing aconservator to manage the affairs of the credit union. The Administrator shallserve the order of conservation in the same manner as provided for service ofan order of suspension.
(f) The conservator,on behalf and under the supervision and direction of the Administrator ofCredit Unions, shall take charge of the books, records, property, assets, andbusiness of the credit union and shall conduct the business and affairs of thecredit union under the direction and supervision of the Administrator. Theconservator shall take steps toward the removal of the causes and conditionsthat have necessitated the order that the Administrator directs. During theconservatorship, the conservator shall make reports to the Administrator fromtime to time as the Administrator requires. The conservator shall take allnecessary measures to preserve, protect, and recover the assets or property ofthe credit union, including claims or causes of action belonging to or that maybe asserted by the credit union. In addition, the conservator may deal withthat property in his own name as conservator and may file, prosecute, or defendagainst a suit by or against the credit union if the conservator considers thisaction necessary to protect the interested parties or property affected by thesuit.
(g) The Administratorof Credit Unions shall determine the cost incident to the conservatorship. Thecost is a charge against the assets and funds of the credit union, and shall bepaid as the Administrator directs.
(h) A suit filedagainst a credit union or its conservator while a conservatorship order is ineffect must be brought in a court of proper jurisdiction in Wake County. Theconservator may file suit in a court of proper jurisdiction in Wake Countyagainst any person for the purpose of preserving, protecting, or recoveringassets or property of the credit union, including a claim or cause of actionbelonging to or that may be asserted by the credit union.
(i) The conservatorshall serve for the period necessary to accomplish the purposes ofconservatorship consistent with the intent of this section. If the creditunion is rehabilitated, it shall be returned to the management of the board ofdirectors under the terms that are reasonable and necessary to preventrecurrence of the conditions that occasioned the conservatorship.
(j) If theAdministrator of Credit Unions determines that the credit union inconservatorship is not in a condition to continue business and cannot berehabilitated as provided by this section, he shall issue, as he deemsappropriate, either an order of merger or an order of liquidation, appointing aliquidating agent.
(k) If, after a hearingunder this section, the board of directors of the credit union is dissatisfiedwith the decision of the Administrator of Credit Unions, the board may appealto the Credit Union Commission by filing with the Administrator a writtenappeal, including a duly certified resolution of the board, not later than 10days after the day that the Administrator's order is served. If the appeal isduly filed, the Administrator shall set a date for a hearing on the appeal notmore than 30 days after the date on which the appeal is filed. TheAdministrator shall promptly give notice of the date, time, and place of thehearing to the credit union and any other interested party. The filing of anappeal does not suspend the effect of the order of the conservation and thisorder remains in force pending final disposition of the appeal by theCommission. At the conclusion of the hearing, the Commission may reverse theorder of the Administrator and adopt and approve the credit union's plan tocontinue operations, affirm the Administrator's order of conservation, or orderthat other appropriate action be taken.
(l) If the board ofdirectors of the credit union does not file a reply to the order of suspensionor an order of conservation as required by this section or fails to request andappear at the hearing provided for by this section, the Administrator of CreditUnions may dispose of the matter as he considers appropriate. The credit unionis presumed to have consented to the action and may not contest it.
(m) The period ofsuspension and the date and time of the hearings provided for by this sectionmay be extended by agreement of the parties and the Administrator of CreditUnions.
(n) The Administratorof Credit Unions shall notify the members of the Credit Union Commission of anysuspension. (1975, c. 538, s. 1; 1977, c. 559, s. 9; 1989, c. 72.)
