Current through Reg. 49, No. 38; September 20, 2024
(a) Authority to convert. A credit union
organized under the laws of this state is authorized to convert to a mutual
savings bank or association by §123.003 of the Act.
(b) Requirements for conversion. A credit
union that is considering converting to a mutual savings bank or association
must comply with the following requirements:
(1) Preliminary communication with membership
and department. At least thirty days prior to a final vote by the board of
directors to formally adopt a conversion proposal, the credit union shall send
notice to the department and each member advising that the board is considering
a possible conversion to a mutual savings bank or association. The notice
shall, at a minimum, contain the following information:
(A) a prominent legend in bold-face type that
advises members of a potential conversion;
(B) the electronic availability of
information related to a potential conversion;
(C) a telephone number and e-mail address
that members may use to request copies of the potential conversion information
that is available by electronic means;
(D) the ability of members to submit written
comments on the potential conversion; and
(E) a clear, concise, and impartial
description of the potential conversion to be considered by the
board.
(2) Information
posted on Internet web site. The credit union shall post information related to
a potential conversion on the credit union's principal Internet web site at
least thirty days prior to a vote by the board of directors to adopt a proposal
of conversion. The posted information shall, at a minimum, discuss:
(A) The business purposes that might be
accomplished by a conversion;
(B)
The differences between and similarities of a credit union and a mutual savings
institution;
(C) An estimate of the
anticipated conversion expenses;
(D) The methods by which a member may request
a copy of the posted information;
(E) The method and timeline for members to
submit written comments on the potential conversion; and
(F) The process that will be followed if the
board formally adopts a conversion proposal.
(3) Written comments from members. The board
shall provide members a reasonable opportunity to submit written comments
relating to a potential conversion. The board may hold a special meeting to
receive member input regarding the potential conversion. It is within the
board's discretion to determine the type, number, duration, and location of any
special meeting(s). Before taking a final vote on a conversion proposal, the
board should consider all written comments and any other member input received
at any special meeting.
(4)
Adoption of a conversion proposal by the board. Subsequent to the written
comment period, the credit union may adopt, by the affirmative vote of at least
two-thirds of the members of its board of directors, a conversion proposal
consistent with this section. The credit union shall notify the department of
the board's approval of the proposal within 5 days of the approval. In
addition, the following documents must be sent to the department as soon as
reasonably practical:
(A) Copies of any
filings made with any state or federal regulatory agency and insuring
organization with jurisdiction over any aspect of the conversion
process;
(B) A copy of the
disclosure materials and the ballot to be sent to eligible members relative to
voting on the conversion proposal;
(C) An estimated budget of the anticipated
conversion expenses including legal, postage and mailing, advertising,
printing, consulting fees, examination and operating fees, and any overtime or
other employee compensation to be paid exclusively as a result of the
conversion; and
(D) Any other
information reasonably requested by the commissioner.
(5) Membership approval. The members of the
credit union must approve the conversion proposal by an affirmative vote of a
majority of those eligible members who vote on such proposal, unless the bylaws
require a higher vote threshold. The credit union shall submit a vote
certification as required by §
RSA
91.1008(c) of this chapter
showing that the conversion proposal was approved by the members of the credit
union;
(6) Insuring organization
requirements. The credit union must furnish written evidence of its compliance
with any voting procedures and disclosure requirements imposed by its insuring
organization; and
(7) Other
regulatory oversight. The credit union must furnish written evidence that it
has met all conversion requirements of the acquiring state or federal
regulatory agency.
(c)
Notice, disclosure materials, and ballot mailed to members. The credit union
shall mail to each eligible member, as defined in §
RSA
91.1008 of this Chapter, a notice advising
the member of the adoption and filing of the conversion proposal. The notice
must include a prominent statement that the conversion will be decided by a
majority of eligible members who vote on the issue (unless the bylaws require a
higher vote threshold), and that each eligible member is only entitled to vote
once. Also, incorporated with the mailing of the notice, eligible members shall
be provided with plain language disclosures of material facts and information
to be used as a basis for reaching an informed decision to vote on the
conversion. The disclosures and ballot shall be submitted to the commissioner
for approval. The commissioner may require changes in the disclosures and
ballot provided to eligible members to assure full and adequate disclosure
prior to the documents being mailed to eligible members.
(d) Conflict of interest. A director,
officer, committee member, agent, or senior management employee of the credit
union, and immediate family members of such individuals shall not, directly or
indirectly, receive a fee, commission, or other consideration, other than that
person's usual salary or compensation, for aiding, promoting, or assisting in a
conversion under this section.
(e)
Continuity of existence. The corporate existence of a credit union converting
under this rule shall continue in its successor. Each member shall be entitled
to receive a share or deposit account or accounts in the converted institution
equal in amount to the value of accounts held in the former credit union
subject to any lien or right of offset held by the credit union.
(f) Approval. The commissioner shall approve
the conversion if all of the conditions required by this section have been met,
unless the commissioner determines the conversion is being made to circumvent a
pending supervisory action that is about to be or has been initiated by the
commissioner because of a concern over the safety and soundness of the credit
union.
(g) Effective date. Once the
commissioner has approved the conversion, it shall become effective upon the
issuance of a charter or certificate of incorporation from the acquiring state
or federal regulatory agency.
