CHAPTER 30. CHARTER CONVERSION OF A CREDIT UNION TO A MUTUAL SAVINGS BANK
IC 28-1-30
Chapter 30. Charter Conversion of a Credit Union to a MutualSavings Bank
IC 28-1-30-1
"Credit union" defined
Sec. 1. As used in this chapter, "credit union" has the meaning setforth in IC 28-7-1-0.5.
As added by P.L.62-1999, SEC.2.
IC 28-1-30-2
"Mutual bank" defined
Sec. 2. As used in this chapter, "mutual bank" means a mutualsavings bank governed by IC 28-6.1.
As added by P.L.62-1999, SEC.2.
IC 28-1-30-3
"Mutual bank conversion" defined
Sec. 3. As used in this chapter, "mutual bank conversion" meansthe conversion of a credit union to a mutual bank.
As added by P.L.62-1999, SEC.2.
IC 28-1-30-4
"Voting parties" defined
Sec. 4. As used in this chapter, "voting parties" means a creditunion's members.
As added by P.L.62-1999, SEC.2.
IC 28-1-30-5
Conversion procedures
Sec. 5. (a) A credit union may convert to a mutual bank with theapproval of the department and, if required by law, the appropriatefederal agency.
(b) The department shall prescribe procedures for mutual bankconversions. The procedures must require the following:
(1) The credit union must prepare and submit to the departmenta plan of mutual bank conversion that:
(A) provides the terms and conditions of the mutual bankconversion as required by the department;
(B) complies with any federal requirements for conversion;and
(C) provides for a two (2) year period after conversion thata director or employee of the credit union may not acquirestock in the resulting institution or a successor institution onterms other than those readily available to all members of theformer credit union.
(2) The credit union must submit evidence with the conversionplan that is satisfactory to the department proving that:
(A) the credit union has applied for deposit insurance fromthe Federal Deposit Insurance Corporation or its successor
in interest; and
(B) upon conversion, the deposits in the resulting mutualbank will be insured by the Federal Deposit InsuranceCorporation.
(3) The plan of mutual bank conversion is conditioned upon theapproval of at least a majority of the total number of votes castat a regular or special meeting of the membership.
(4) Notice of the meeting must be delivered in person to eachmember or mailed to each member not more than thirty (30)days but not less than fourteen (14) days before the date of themeeting.
(c) The notice of the meeting of the membership required undersubsection (b)(4) must include the following:
(1) The date, time, and location of the meeting.
(2) A description of the matters to be voted upon at the meeting.
(3) A ballot that contains:
(A) two (2) voting options:
(i) a vote to approve the conversion; and
(ii) a vote to disapprove the conversion; and
(B) a notice that the member has the right to vote either bymail ballot or at the meeting.
(4) A disclosure that:
(A) the board of directors of the credit union has proposedthat the credit union convert to a mutual savings bankcharter;
(B) the conversion could shift voting rights from eachmember having one (1) vote to a certain number of sharesqualifying for one (1) vote;
(C) subsequent to the conversion, management may solicitproxies and vote them as a block;
(D) a mutual savings bank can convert to a stock savingsbank;
(E) upon conversion, the credit union will lose its federal taxexempt status;
(F) members may vote by mail ballot or in person at themeeting; and
(G) the complete application and proposal for the conversionare available for inspection at the credit union's officesduring normal business hours.
(d) The board of directors of the converting credit union shallcertify the results of the membership vote to the department withinten (10) days after the vote is taken.
(e) Upon the approval of a plan of mutual bank conversion by theboard of directors of the credit union, the plan of mutual bankconversion and a certified copy of the resolution of the board ofdirectors approving the plan of mutual bank conversion must besubmitted to the department and, if required, the appropriate federalagency for approval.
(f) The credit union shall provide the department with additionalrelevant information concerning the plan of mutual bank conversion
as requested by the department.
As added by P.L.62-1999, SEC.2.
IC 28-1-30-6
Approval of conversion
Sec. 6. (a) The department may approve or disapprove the plan ofmutual bank conversion filed under section 5 of this chapter.
(b) The department may not approve a plan of mutual bankconversion unless the department finds, after appropriateinvestigation or examination, but without the requirement of a publichearing, that:
(1) the resulting mutual bank will operate in a safe, sound, andprudent manner;
(2) the proposed mutual bank conversion will not result in amutual bank that has inadequate capital, unsatisfactorymanagement, or poor earnings prospects;
(3) the management or other principals of the credit union arequalified by character and financial responsibility to control andoperate in a legal and proper manner the mutual bank proposedto be formed as a result of the mutual bank conversion; and
(4) the interests of the:
(A) members and creditors of the credit union;
(B) depositors and creditors of the mutual bank; and
(C) public generally;
will not be jeopardized by the proposed mutual bankconversion.
As added by P.L.62-1999, SEC.2.
IC 28-1-30-7
Resulting mutual bank
Sec. 7. Upon the conversion of a credit union, the resulting mutualbank:
(1) possesses all of the rights, privileges, immunities, andpowers of a mutual bank;
(2) unless otherwise provided in this chapter, is subject to all ofthe duties, restrictions, obligations, and liabilities of a mutualbank;
(3) succeeds by operation of law to all rights and property of theconverting credit union; and
(4) is subject to all debts, obligations, and liabilities of theconverting credit union as if the mutual bank had incurred thedebts and liabilities.
As added by P.L.62-1999, SEC.2.
IC 28-1-30-8
Transitional period
Sec. 8. (a) During a transitional period not to exceed ten (10)years from the effective date of the conversion, the department mayauthorize the resulting mutual bank to do the following:
(1) Wind up any activities legally engaged in by the credit
union at the time of mutual bank conversion but not permittedto mutual banks.
(2) Retain any assets legally held by the credit union at the timeof the mutual bank conversion that may not be held by a mutualbank.
(3) Attain and maintain sixty percent (60%) of its assets ininvestments that qualify under 26 U.S.C. 7701(a)(19).
(b) The terms and conditions of any transitional period under thissection are at the discretion of the department.
As added by P.L.62-1999, SEC.2.
IC 28-1-30-9
Retention of branch banks
Sec. 9. A mutual bank created by charter conversion may retainall branches lawfully established.
As added by P.L.62-1999, SEC.2.
IC 28-1-30-10
Articles of mutual bank conversion
Sec. 10. (a) The converting credit union shall file articles ofmutual bank conversion, approved in writing by the director, with thesecretary of state.
(b) The effective date of the mutual bank conversion is the dateand time that the approved articles of mutual bank conversion arefiled with the secretary of state, unless a later effective date isspecified in the articles of mutual bank conversion.
(c) The converting credit union shall record a copy of the articlesof mutual bank conversion with the county recorder of the countywhere the principal office of the mutual bank is located.
As added by P.L.62-1999, SEC.2.
IC 28-1-30-11
Applicability of statutes and rules
Sec. 11. Upon filing the articles of mutual bank conversion, theconverted mutual bank, unless otherwise provided in this chapter,immediately is subject to all statutes and rules applicable to mutualbanks.
As added by P.L.62-1999, SEC.2.
IC 28-1-30-12
Rules and policies
Sec. 12. The department may adopt rules under IC 4-22-2 orpolicies to implement this chapter.
As added by P.L.62-1999, SEC.2.