6-587

6-587. Merger or consolidation of credit
unions

A. Any two or more credit unions may merge or consolidate into a single credit
union. The merger or consolidation may be with a credit union organized under the laws
of this state, the laws of any other state or territory of the United States or the laws
of the United States.

B. If two or more credit unions merge, they shall either designate one of them as
the continuing credit union or they shall structure a totally new credit union and
designate it as the new credit union. All participating credit unions other than the
continuing or new 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 superintendent for preliminary approval. If the plan includes the
creation of a new credit union, all documents required by section 6-506 shall be
submitted as part of the plan. In addition, each participating credit union shall submit
the following:

1. The time and place of the meeting of the board of directors at which the plan
was agreed on.

2. The vote of the directors in favor of the adoption of the plan.

3. A copy of the resolution or other action by which the plan was agreed on.

D. The superintendent shall grant preliminary approval if the plan has been
approved properly by each board of directors, if the documentation required to form a new
credit union, if any, complies with section 6-506 and if the superintendent is of the
opinion that the merged or continuing credit union should be approved.

E. After the superintendent grants preliminary approval, each merging credit union
shall conduct a membership vote on its participation in the plan. The credit union shall
conduct the vote either at a special membership meeting called for that purpose or by
mail ballot. If a majority of the members voting approves the plan, the credit union
shall submit a record of that fact to the superintendent 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.

F. The superintendent shall grant final approval of the plan of merger after
determining that the requirements of subsection E of this section in the case of each
merging credit union have been met and if proof of insurance of accounts, as required by
section 6-558, has been furnished. The superintendent shall notify all participating
credit unions of his action on the plan. If approved, the continuing credit union shall
file copies of the certificate showing the approval of the superintendent with the
corporation commission and a certified copy of the filing under the seal of the
commission recorded with the county recorder of the county in which each credit union
participating in the merger has its principal place of business with a copy filed with
the superintendent. When the copies have been filed the merged credit union terminates
as a legal entity, and the continuing credit union remains and continues in operation.

G. On final approval of the plan by the superintendent, all property, property
rights and members' interests in each merging credit union 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 are deemed to have
been assumed by the continuing or new credit union. The rights and privileges of the
members of each participating credit union remain intact, except that if a person is a
member of more than one of the participating credit unions that person is 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 is subject to the requirements of section 6-511.

I. Notwithstanding any other law, the superintendent may authorize a merger or
consolidation of a credit union which 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 or
assume any of the liabilities of any other credit union which is insolvent or in danger
of insolvency if the superintendent is satisfied that:

1. An emergency requiring expeditious action exists with respect to the other
credit union.

2. Other alternatives are not reasonably available.

3. The public interest would best be served by approval of the merger,
consolidation, purchase or assumption.