§ 19-5.1-3 Conversion from credit union tofinancial institution or another form of financial services entity. – (a) Any credit union chartered under the laws of this state may convert to andbecome a financial institution chartered under the laws of this state oranother financial services entity chartered under the laws of the UnitedStates. The conversion shall not require the prior liquidation of the subjectcredit union. In the event that any credit union chartered under the laws ofthis state elects to convert to and become a financial institution charteredunder the laws of this state, the credit union shall first demonstratecompliance with the various requirements of Chapter 2 of this title, asappropriate. In the alternative, in the event that any credit union charteredunder the laws of this state elects to convert to and become another form offinancial services entity chartered under the laws of the United States, thecredit union shall first demonstrate compliance with the various requirementsof the federal laws and regulations governing the chartering of that designatedfinancial services entity.
(b) Any credit union chartered under the laws of this statemay convert to and become a financial institution chartered under the laws ofthis state or another form of financial services entity chartered under thelaws of the United States upon adoption of a plan of conversion by two-thirds(2/3) vote of the board of directors and approval of the plan by the directoror the director's designee and a majority vote of those members of the creditunion qualified to vote pursuant to § 19-5-7 who are present in person orby proxy at a meeting called by the board of directors. For the purpose of thissection, unless otherwise required under applicable provisions of federal orstate banking law, a member shall be deemed to be the individual whose taxidentification number or social security number is used by the credit union forinterest reporting purposes to the Internal Revenue Service.
(c) In the event that the plan of conversion calls for theissuance of capital stock, it shall also provide that the converted entityshall issue and sell the stock issued in connection with the conversion at aprice that represents its pro forma market value, as determined by anindependent appraisal, and shall offer its stock initially in a subscriptionoffering to the members of the credit union on an eligibility record dateestablished by the board of directors, giving those members priority rights topurchase the shares over the general public pro rata based on deposits. Theconverted credit union shall also create a liquidation account for the benefitof its members on the eligibility record date, in an amount representing thetotal equity of the credit union at the time, the balances of which shall becalculated and subsequently recalculated as determined in accordance withregulations promulgated by the director or the director's designee. Unlessotherwise impaired, any liquidation account so created also shall be consideredas part of the paid-in and unimpaired capital stock and surplus of the newlychartered stock financial institution or financial services entity. The plan ofconversion may provide for restrictions on the amount of stock which any personor entity may purchase in the conversion, or own or control thereafter, whichmay also be incorporated into the stock agreement to form the converted entity.
(d) In connection with the conversion, the financialinstitution or other financial services entity may form a holding company orutilize an existing holding company to hold all the shares of the financialinstitution or other financial services entity, and offer to its depositors andgeneral public (subject to subscription rights in favor of depositors) all ofthe stock of the holding company in lieu of the capital stock of the financialinstitution or other financial services entity. This conversion may also beaccomplished pursuant to a merger.
(e) No credit union may convert to a financial institution orother financial services entity unless its deposits will continue to befederally insured. The corporate existence of a credit union converting to thefinancial institution or other financial services entity shall not terminate,but the financial institution or other financial services entity shall bedeemed to be a continuation of the corporate entity credit union so converted.
(f) In connection with its approval of any plan of conversionto a financial institution chartered under the laws of this state, the directoror the director's designee shall approve the proposed agreement to form and theproposed bylaws of the converted entity. The director or the director'sdesignee, upon finding that the requirements of this section and applicableregulations have been met (including, when applicable, that the conversion toany entity issuing stock has been completed with the sale of all shares offeredin the conversion to a stock form of financial institution), shall issue acertificate of approval of the conversion to the converted entity. Upon thepayment of fifty dollars ($50.00), the certificate of approval shall be filedwith the secretary of state, together with the certificate of the generaltreasurer that the converted entity has paid into the treasury for the use ofthe state a sum equal to one tenth of one percent (.10%) of its capital stockwhich in no event shall be less than one hundred dollars ($100). Upon thefiling of the certificate with the secretary of state and payment of fiftydollars ($50.00), the secretary of state shall immediately record thecertificate of approval and any agreement to form, at which time the agreementto form will become effective.
(g) The director or the director's designee shall issue rulesand regulations implementing this section.
(h) To the extent not inconsistent with this section, eachcredit union so converted into a financial institution chartered under the lawsof this state shall have all the powers and privileges conferred on, and besubject to all the duties and liabilities imposed on, those financialinstitutions and each credit union so converted into a financial servicesentity chartered under the laws of the United States shall have all the powersand privileges conferred on, and be subject to all the duties and liabilitiesimposed on, those federally chartered financial services entity.
§ 19-5.1-3 Conversion from credit union tofinancial institution or another form of financial services entity. – (a) Any credit union chartered under the laws of this state may convert to andbecome a financial institution chartered under the laws of this state oranother financial services entity chartered under the laws of the UnitedStates. The conversion shall not require the prior liquidation of the subjectcredit union. In the event that any credit union chartered under the laws ofthis state elects to convert to and become a financial institution charteredunder the laws of this state, the credit union shall first demonstratecompliance with the various requirements of Chapter 2 of this title, asappropriate. In the alternative, in the event that any credit union charteredunder the laws of this state elects to convert to and become another form offinancial services entity chartered under the laws of the United States, thecredit union shall first demonstrate compliance with the various requirementsof the federal laws and regulations governing the chartering of that designatedfinancial services entity.
(b) Any credit union chartered under the laws of this statemay convert to and become a financial institution chartered under the laws ofthis state or another form of financial services entity chartered under thelaws of the United States upon adoption of a plan of conversion by two-thirds(2/3) vote of the board of directors and approval of the plan by the directoror the director's designee and a majority vote of those members of the creditunion qualified to vote pursuant to § 19-5-7 who are present in person orby proxy at a meeting called by the board of directors. For the purpose of thissection, unless otherwise required under applicable provisions of federal orstate banking law, a member shall be deemed to be the individual whose taxidentification number or social security number is used by the credit union forinterest reporting purposes to the Internal Revenue Service.
(c) In the event that the plan of conversion calls for theissuance of capital stock, it shall also provide that the converted entityshall issue and sell the stock issued in connection with the conversion at aprice that represents its pro forma market value, as determined by anindependent appraisal, and shall offer its stock initially in a subscriptionoffering to the members of the credit union on an eligibility record dateestablished by the board of directors, giving those members priority rights topurchase the shares over the general public pro rata based on deposits. Theconverted credit union shall also create a liquidation account for the benefitof its members on the eligibility record date, in an amount representing thetotal equity of the credit union at the time, the balances of which shall becalculated and subsequently recalculated as determined in accordance withregulations promulgated by the director or the director's designee. Unlessotherwise impaired, any liquidation account so created also shall be consideredas part of the paid-in and unimpaired capital stock and surplus of the newlychartered stock financial institution or financial services entity. The plan ofconversion may provide for restrictions on the amount of stock which any personor entity may purchase in the conversion, or own or control thereafter, whichmay also be incorporated into the stock agreement to form the converted entity.
(d) In connection with the conversion, the financialinstitution or other financial services entity may form a holding company orutilize an existing holding company to hold all the shares of the financialinstitution or other financial services entity, and offer to its depositors andgeneral public (subject to subscription rights in favor of depositors) all ofthe stock of the holding company in lieu of the capital stock of the financialinstitution or other financial services entity. This conversion may also beaccomplished pursuant to a merger.
(e) No credit union may convert to a financial institution orother financial services entity unless its deposits will continue to befederally insured. The corporate existence of a credit union converting to thefinancial institution or other financial services entity shall not terminate,but the financial institution or other financial services entity shall bedeemed to be a continuation of the corporate entity credit union so converted.
(f) In connection with its approval of any plan of conversionto a financial institution chartered under the laws of this state, the directoror the director's designee shall approve the proposed agreement to form and theproposed bylaws of the converted entity. The director or the director'sdesignee, upon finding that the requirements of this section and applicableregulations have been met (including, when applicable, that the conversion toany entity issuing stock has been completed with the sale of all shares offeredin the conversion to a stock form of financial institution), shall issue acertificate of approval of the conversion to the converted entity. Upon thepayment of fifty dollars ($50.00), the certificate of approval shall be filedwith the secretary of state, together with the certificate of the generaltreasurer that the converted entity has paid into the treasury for the use ofthe state a sum equal to one tenth of one percent (.10%) of its capital stockwhich in no event shall be less than one hundred dollars ($100). Upon thefiling of the certificate with the secretary of state and payment of fiftydollars ($50.00), the secretary of state shall immediately record thecertificate of approval and any agreement to form, at which time the agreementto form will become effective.
(g) The director or the director's designee shall issue rulesand regulations implementing this section.
(h) To the extent not inconsistent with this section, eachcredit union so converted into a financial institution chartered under the lawsof this state shall have all the powers and privileges conferred on, and besubject to all the duties and liabilities imposed on, those financialinstitutions and each credit union so converted into a financial servicesentity chartered under the laws of the United States shall have all the powersand privileges conferred on, and be subject to all the duties and liabilitiesimposed on, those federally chartered financial services entity.
§ 19-5.1-3 Conversion from credit union tofinancial institution or another form of financial services entity. – (a) Any credit union chartered under the laws of this state may convert to andbecome a financial institution chartered under the laws of this state oranother financial services entity chartered under the laws of the UnitedStates. The conversion shall not require the prior liquidation of the subjectcredit union. In the event that any credit union chartered under the laws ofthis state elects to convert to and become a financial institution charteredunder the laws of this state, the credit union shall first demonstratecompliance with the various requirements of Chapter 2 of this title, asappropriate. In the alternative, in the event that any credit union charteredunder the laws of this state elects to convert to and become another form offinancial services entity chartered under the laws of the United States, thecredit union shall first demonstrate compliance with the various requirementsof the federal laws and regulations governing the chartering of that designatedfinancial services entity.
(b) Any credit union chartered under the laws of this statemay convert to and become a financial institution chartered under the laws ofthis state or another form of financial services entity chartered under thelaws of the United States upon adoption of a plan of conversion by two-thirds(2/3) vote of the board of directors and approval of the plan by the directoror the director's designee and a majority vote of those members of the creditunion qualified to vote pursuant to § 19-5-7 who are present in person orby proxy at a meeting called by the board of directors. For the purpose of thissection, unless otherwise required under applicable provisions of federal orstate banking law, a member shall be deemed to be the individual whose taxidentification number or social security number is used by the credit union forinterest reporting purposes to the Internal Revenue Service.
(c) In the event that the plan of conversion calls for theissuance of capital stock, it shall also provide that the converted entityshall issue and sell the stock issued in connection with the conversion at aprice that represents its pro forma market value, as determined by anindependent appraisal, and shall offer its stock initially in a subscriptionoffering to the members of the credit union on an eligibility record dateestablished by the board of directors, giving those members priority rights topurchase the shares over the general public pro rata based on deposits. Theconverted credit union shall also create a liquidation account for the benefitof its members on the eligibility record date, in an amount representing thetotal equity of the credit union at the time, the balances of which shall becalculated and subsequently recalculated as determined in accordance withregulations promulgated by the director or the director's designee. Unlessotherwise impaired, any liquidation account so created also shall be consideredas part of the paid-in and unimpaired capital stock and surplus of the newlychartered stock financial institution or financial services entity. The plan ofconversion may provide for restrictions on the amount of stock which any personor entity may purchase in the conversion, or own or control thereafter, whichmay also be incorporated into the stock agreement to form the converted entity.
(d) In connection with the conversion, the financialinstitution or other financial services entity may form a holding company orutilize an existing holding company to hold all the shares of the financialinstitution or other financial services entity, and offer to its depositors andgeneral public (subject to subscription rights in favor of depositors) all ofthe stock of the holding company in lieu of the capital stock of the financialinstitution or other financial services entity. This conversion may also beaccomplished pursuant to a merger.
(e) No credit union may convert to a financial institution orother financial services entity unless its deposits will continue to befederally insured. The corporate existence of a credit union converting to thefinancial institution or other financial services entity shall not terminate,but the financial institution or other financial services entity shall bedeemed to be a continuation of the corporate entity credit union so converted.
(f) In connection with its approval of any plan of conversionto a financial institution chartered under the laws of this state, the directoror the director's designee shall approve the proposed agreement to form and theproposed bylaws of the converted entity. The director or the director'sdesignee, upon finding that the requirements of this section and applicableregulations have been met (including, when applicable, that the conversion toany entity issuing stock has been completed with the sale of all shares offeredin the conversion to a stock form of financial institution), shall issue acertificate of approval of the conversion to the converted entity. Upon thepayment of fifty dollars ($50.00), the certificate of approval shall be filedwith the secretary of state, together with the certificate of the generaltreasurer that the converted entity has paid into the treasury for the use ofthe state a sum equal to one tenth of one percent (.10%) of its capital stockwhich in no event shall be less than one hundred dollars ($100). Upon thefiling of the certificate with the secretary of state and payment of fiftydollars ($50.00), the secretary of state shall immediately record thecertificate of approval and any agreement to form, at which time the agreementto form will become effective.
(g) The director or the director's designee shall issue rulesand regulations implementing this section.
(h) To the extent not inconsistent with this section, eachcredit union so converted into a financial institution chartered under the lawsof this state shall have all the powers and privileges conferred on, and besubject to all the duties and liabilities imposed on, those financialinstitutions and each credit union so converted into a financial servicesentity chartered under the laws of the United States shall have all the powersand privileges conferred on, and be subject to all the duties and liabilitiesimposed on, those federally chartered financial services entity.
