6.2-1317 - (Effective October 1, 2010) Supervisory merger or transfer of assets of insolvent credit union.
§ 6.2-1317. (Effective October 1, 2010) Supervisory merger or transfer ofassets of insolvent credit union.
A. If the Commission finds that a state credit union is insolvent, that anemergency exists, and that its merger into another credit union is desirablefor the protection of its members, and if the board of directors of bothcredit unions approves a plan of merging the insolvent state credit unioninto another state credit union or a federal credit union, compliance with §13.1-895 shall be dispensed with as to both credit unions and the approval ofthe Commission of such plan of merger shall be the equivalent of approval bymore than two-thirds of the members of both credit unions for all purposes ofArticle 11 (§ 13.1-893.1 et seq.) and Article 12 (§ 13.1-899 et seq.) ofChapter 10 of Title 13.1.
B. If the Commission finds that a state credit union is insolvent, that theacquisition of its assets by another state credit union or a federal creditunion is in the best interests of its members, and that an emergency exists,it may, with the consent of the board of directors of both credit unions asto the terms and conditions of such transfer, including the assumption of allor certain liabilities, enter an order transferring some or all of the assetsof such insolvent state credit union to such other state or federal creditunion and no compliance with the provisions of §§ 13.1-899 and 13.1-900 shallbe required.
C. In the case either of such a merger or of such a sale of assets, theCommission shall provide that prompt notice of its findings of insolvency andof the merger or sale of assets be sent to the members of record of theinsolvent state credit union for the purpose of providing such members anopportunity to challenge the finding that the state credit union isinsolvent. The relevant books and records of such insolvent credit unionshall be preserved and be made available to such members for a period of 30days after such notice is sent. The Commission's finding of insolvency shallbecome final if a hearing before the Commission is not requested by any suchmember within such 30-day period.
D. If, after such hearing provided in subsection C, the Commission finds thatthe state credit union was solvent, it shall rescind its order enteredpursuant to subsection A or subsection B and the merger or transfer of assetsshall be rescinded. After such hearing, however, if the Commission finds thatthe state credit union was insolvent, its order shall be final.
E. Notwithstanding the provisions of subsection B of § 6.2-1327, or any otherprovisions of this chapter, the Commission may order a merger pursuant tosubsection A or a sale of assets pursuant to subsection B. The continuingcredit union, upon approval of the Commission, shall amend its bylaws toincorporate the specified common bond of interest of the insolvent creditunion.
F. The Commission may authorize a financial institution whose deposits areinsured by a federal agency to purchase any of the assets of or assume any ofthe liabilities of a credit union that is insolvent or in danger ofinsolvency, provided that prior to exercising this authority the Commissionshall use every reasonable effort to effect a merger or consolidation with orpurchase and assumption by another credit union and shall have been advisedby the insuring organization that it cannot effect a merger, consolidation,or other disposition of the insolvent credit union acceptable to theCommission.
(1982, c. 571, § 6.1-200.4; 1985, c. 364; 1990, c. 373, § 6.1-225.10; 2010,c. 794.)