Connecticut Administrative Code
Title 36a - The Banking Law of Connecticut
136 - Conversion of Mutual Connecticut Banks to Capital Stock Connecticut Banks
Section 36a-136-6 - Notice to depositors

Universal Citation: CT Reg of State Agencies 36a-136-6

Current through September 9, 2024

(a)

(1) The converting institution shall promptly notify its depositors that its governing board adopted a plan of conversion and that a copy of the plan is available for the depositors' inspection in the converting institution's main office and branches. The converting institution shall mail a letter to each depositor or publish a notice in the local newspaper in each local community where the converting institution has a branch office. The converting institution may also issue a press release.

(2) The commissioner may require notification broader than that required under subdivision (1) of this subsection, if necessary, to ensure adequate notice to the depositors.

(b) The converting institution shall not provide financial statements, describe the benefits of conversion, estimate the value of the converting institution's shares upon conversion or, in the case of a converting mutual savings and loan association, solicit proxies in the letter, notice or press release. If the converting institution responds to inquiries about the conversion, the converting institution may address only the matters listed in subsections (c) and (d) of this section.

(c) The converting institution may include any of the following statements and descriptions in its letter, notice or press release:

(1) The governing board adopted a proposed plan to convert from a mutual to a stock institution;

(2) The commissioner must approve the conversion before the conversion will be effective. The depositors will have an opportunity to file written comments, including objections and materials supporting the objections, with the commissioner;

(3) The Internal Revenue Service must issue a favorable tax ruling, or a tax expert must issue an appropriate tax opinion, on the tax consequences of the conversion before the commissioner will approve the conversion. The ruling or opinion must indicate the conversion will be a tax-free reorganization;

(4) The commissioner might not approve the conversion and the Internal Revenue Service or a tax expert might not issue a favorable tax ruling or tax opinion;

(5) Account holders will continue to hold accounts in the converted institution with the same dollar amounts, rates of return and general terms as existing deposits. The Federal Deposit Insurance Corporation will continue to insure the accounts;

(6) The conversion will not affect borrowers' loans, including the amount, rate, maturity, security and other contractual terms;

(7) The converting institution's business of accepting deposits and making loans will continue without interruption;

(8) The converting institution's current management and staff will continue to conduct current services for depositors and borrowers under current policies and in existing offices;

(9) The converting institution may continue to be a member of the Federal Home Loan Bank System;

(10) The converting institution may terminate the proposed conversion;

(11) The proposed record date for determining the eligible account holders who are entitled to receive subscription rights to purchase shares of the converting institution;

(12) A brief description of the circumstances under which supplemental eligible account holders will receive subscription rights to purchase shares of the converting institution;

(13) A brief description of how directors, officers and employees will participate in the conversion;

(14) A brief description of the proposed plan of conversion;

(15) The par value, if any, and approximate number of shares the converting institution will issue and sell in the conversion; and

(16) The converting institution may substantially amend the plan of conversion.

(d) A converting institution that is a mutual savings and loan association may also include any of the following statements and descriptions in its letter, notice or press release:

(1) The converting institution will send the depositors a proxy statement with detailed information on the proposed conversion before convening a depositors' meeting to vote on the conversion;

(2) The depositors will have an opportunity to approve or disapprove the proposed conversion at a meeting. At least a majority of the eligible votes shall approve the conversion;

(3) The converting institution will not vote existing proxies to approve or disapprove the conversion. The converting institution will solicit new proxies for voting on the proposed conversion;

(4) The converting institution may substantively amend the converting institution's proposed plan of conversion before the depositors' meeting;

(5) After the commissioner approves the proposed conversion, the converting institution will send proxy materials providing additional information. After the converting institution sends proxy materials, depositors may telephone or write to the converting institution with additional questions; and

(6) A brief description of how depositors may participate in the conversion.

Disclaimer: These regulations may not be the most recent version. Connecticut may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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