South Carolina Code of Regulations
Chapter 15 - STATE BOARD OF FINANCIAL INSTITUTIONS CONSUMER FINANCE DIVISION
Article 2 - COOPERATIVE CREDIT UNIONS
Section 15-47 - Merger Procedures for State Credit Unions

Universal Citation: SC Code Regs 15-47

Current through Register Vol. 48, No. 9, September 27, 2024

I. SCOPE

This regulation prescribes the procedures that enable one or more credit unions to merge with a single continuing credit union where the merging credit union(s) and the continuing credit union are state credit unions.

II. DEFINITIONS

(a) As used herein:
(1) The continuing credit union is that credit union which will continue in operation after the merger;

(2) The merging credit union is that credit union which will cease to exist as an operating credit union at the time of the merger;

(3) State credit union means any credit union chartered under the laws of South Carolina;

(4) Federal credit union means any credit union chartered by the National Credit Union Administration.

III. WHEN PERMISSIBLE

Merger may be effected if:

(1) There has been approval by the National Credit Union Administration when the continuing credit union is federally chartered;

(2) There has been approval by the Board of Financial Institutions when the continuing credit union is state chartered.

IV. PREPARATION OF MERGER PLANS

(a) Upon the approval of a proposal for merger by a majority of the members of the Board of Directors of the credit unions, a written plan for the proposed merger shall be prepared by the continuing credit union. The plan shall include:
(1) Current financial reports of each credit union as of the same date;

(2) Current delinquent loan schedule annotated to reflect collection problems of each credit union as of the same date;

(3) Combined financial report, including an analysis of share values and an explanation of any share adjustments;

(4) Explanation of any provisions for reserves, undivided earnings or dividends;

(5) Provision with respect to notification and payment of creditors;

(6) Explanation of any changes relative to insurance of member accounts;

(7) Provisions for insuring that all assets and liabilities of the continuing credit union will conform with the requirements of the South Carolina Statutes relating to Cooperative Credit Unions;

(8) Proposed charter amendments.

V. SUBMITTAL OF MERGER PROPOSAL TO COMMISSIONER OF BANKING

(a) Upon approval of the merger plan by a majority of the members of the Board of Directors of the credit unions, the following information will be submitted to the Commissioner of Banking by the continuing credit union;
(1) The merger plan:

(2) Resolution of the Board of Directors;

(3) Proposed Merger Agreement;

(4) Notice of proposed merger to members of the merging and continuing credit unions:

(5) Copy of the form of ballot to be sent to the members of the merging and continuing credit unions.

VI. APPROVAL OF THE MERGER PROPOSAL BY MEMBERS

(a) Members of the merging and continuing credit unions shall:
(1) Have the right to vote on the merger proposal in person at the annual meetings, if within 120 days of the Board of Financial Institutions' approval, or at a special meeting to be called within 120 days of such approval, or by mail ballot postmarked no later than the date and time announced for the annual meeting or the special meeting called for that purpose;

(2) Be given twenty (20) days advance notice of the meeting at which the merger proposal is to be submitted. The notice shall:
(i) Specify the purpose of the meeting and the time and place;

(ii) Include a summary of the merger plan, which shall contain, but not necessarily be limited to current financial reports for each credit union, a combined financial report for the continuing credit union, explanation of any changes relative to insurance of member accounts;

(iii) State reasons for the proposal merger;

(iv) Provide name and location (to include branches) of the continuing credit union;

(v) Inform the members that they have the right to vote on the merger proposal in person at the meeting or by written ballot to be postmarked no later than the date and time announced for the annual meeting or the special meeting called for the purpose; and

(vi) Be accompanied by a Ballot for Merger Proposal.

(b) The merger proposal must be approved by affirmative vote of a majority of the members of the merging and continuing credit unions who vote on the proposal.

VII. CERTIFICATION OF VOTE ON MERGER PROPOSAL

The Board of Directors of the merging credit union(s) shall promptly certify the results of the membership vote to the Commissioner of Banking.

VIII. APPROVAL OF MERGER PROPOSAL BY BOARD OF FINANCIAL INSTITUTIONS

(a) If the Commissioner finds that the merger proposal complies with this and other parts of these regulations, he will present the merger proposal to the Board of Financial Institutions.

(b) Any proposed charter amendments for a continuing state credit union will be approved contingent upon the completion of the merger.

IX. COMPLETION OF MERGER

(a) Upon approval of the merger proposal by the Board of Financial Institutions and by the members of the merging and continuing credit unions as required, action may be taken to complete the merger. The Board of Directors of the continuing credit union shall:
(1) Promptly certify the completion of the merger to the Commissioner of Banking and that at least a majority of the members who voted in both the merging and continuing credit unions voting voted for the merger;

(2) Forward, along with the certification, the following documents:
(i) Financial reports for each credit union before the completion of the merger; and

(ii) A financial report for the continuing credit union after the completion of the merger; and

(iii) The charter of the merging credit union(s).

(b) If the Commissioner of Banking is satisfied that the merger has been accomplished in accordance with the approved plan, he shall so notify the credit unions, in writing and require that a copy of the plan of merger and merger agreement be filed with the Secretary of State and will proceed to cancel the charter of the merging credit union(s).

X. Subsection (a), (1) and (2), and subsection (b) of Section VI and Section VII of this regulation shall apply to a merging state credit union although it proposes to merge into a federally chartered credit union.

Disclaimer: These regulations may not be the most recent version. South Carolina 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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