§ 16101. Conversions
(a) General. The provisions of this chapter shall apply whenever a national financial institution
seeks to convert to a Vermont financial institution or whenever a Vermont financial
institution seeks to convert or amend its charter in order to change its chartering
authority, the nature or scope of its organizational authority, or to a different
form of ownership; provided, however, that conversion from a Vermont financial institution
into a national financial institution shall be as permitted in federal law, shall
not require the Commissioner’s approval, and federal law shall be controlling to the
extent the laws of this State are inconsistent.
(b) Types of conversions. The types of conversions permitted under this chapter are as follows:
(1) conversion from a national financial institution to a Vermont financial institution;
(2) conversion from a Vermont financial institution to a national financial institution;
(3) conversion of a special purpose financial institution into a universal financial institution
or into another form of special purpose financial institution;
(4) conversion of a universal financial institution into a special purpose financial institution;
(5) conversion of a mutual financial institution or a cooperative financial institution
into an investor-owned financial institution or into a credit union under chapters
220-226 of this title;
(6) conversion of a credit union under chapters 220-226 of this title into a mutual financial
institution or a cooperative financial institution; or
(7) conversion of an investor-owned financial institution into a mutual financial institution.
(c) Manner of conversion. Any Vermont financial institution may convert under this chapter in the following
manner:
(1) the governing body of the financial institution shall approve the plan of conversion
by at least a majority vote, unless a higher percentage is required by the institution’s
organizational documents;
(2) the approved plan of conversion, together with a certified copy of the authorizing
resolution adopted by the governing body of the financial institution, shall be submitted
to the Commissioner for approval pursuant to the requirements and procedures of chapter
201, subchapter 7 of this title, except as provided in subsection (a) of this section;
(3) the plan of conversion, as approved by the Commissioner, shall be submitted to the
investors or mutual voters of the institution, as the case may be, for their approval
at an annual meeting or at a special meeting called for that purpose as provided in
subsections (e), (f), and (g) of this section; and
(4) the approved plan shall be finalized as provided in subsection (h) of this section.
(d) Contents of plan of conversion. The plan of conversion shall include:
(1) the name of the institution and its location;
(2) the type of the institution that the resulting institution is to be;
(3) a method and schedule for terminating any nonconforming activities that would result
from such conversion;
(4) a statement of the competitive impact resulting from such conversion, including the
loss of particular financial services in the market area resulting from such conversion;
(5) a statement that the conversion is subject to approval of the Commissioner, except
for conversions from a Vermont financial institution to a national financial institution;
(6) a statement that the conversion is subject to approval of the institution’s investors
or mutual voters, as the case may be;
(7) in the case of a conversion involving a mutual or cooperative financial institution,
the plan shall ensure that the interests of depositors and account holders in the
net worth of the institution are treated equitably; and
(8) such additional information as the Commissioner may require.
(e) Notice to investors or mutual voters. Notice of the meeting shall be published at least once a week for three successive
weeks in at least one newspaper of general circulation in the county where the institution’s
principal office is located or in other newspapers as the Commissioner may designate.
The notice shall be mailed to each investor of record or mutual voter at the address
on the books of the institution at least 30 days prior to the date of the meeting.
(f) Voting requirements. A majority of each class of equity interest, or a majority of the mutual voters of
the institution casting votes, unless a higher percentage is required by the institution’s
organizational documents, is necessary to approve the plan of conversion at the meeting.
An affirmative vote constitutes approval of the adoption of any amendments to the
organizational documents of the institution that are necessary to effectuate the transaction.
(g) Rights of dissenting investors. For investor-owned institutions that are converting under this chapter, the rights
of investors dissenting to the conversion are those specified in Title 11 or 11A,
depending upon the organizational form of the institution; provided, however, the
rights of dissenting investors in a national financial institution shall be governed
by federal law. To the extent that dissenters’ rights are not addressed in Title 11
or 11A or the rights contained in those titles are less beneficial to the dissenting
investors than those rights listed in the institution’s organizational documents,
the organizational documents shall govern.
(h) Finalizing the plan of conversion. Except as provided in subsection (i) of this section, the financial institution shall
effect its conversion as follows:
(1) Upon approval by the investors or mutual voters of the institution, as the case may
be, the institution shall submit the executed conversion plan to the Commissioner,
together with all necessary amendments to the institution’s organizational documents,
each certified by an officer of the institution.
(2) The Commissioner shall issue to the resulting institution a certificate specifying
the name of the converting institution and the name and organizational structure of
the resulting institution. The resulting institution shall file one copy of the certificate
issued by the Commissioner with the Secretary of State for recording. The certificate
shall be conclusive evidence of the conversion and the correctness of all proceedings
relating to the conversion in all courts and places. The certificate may be filed
in any land records office to evidence the new name in which property of the converting
institution is to be held.
(3) Unless a later date is specified in the conversion plan, the conversion becomes effective
upon filing of the certificate as provided in subdivision (2) of this subsection and
the former charter of the converting institution shall terminate automatically. The
Commissioner may file or order any financial institution to file conforming documents
with the Secretary of State.
(i) Completion of conversion into national financial institution. Upon completion of a conversion into a national financial institution, the national
financial institution shall certify in writing to the Commissioner and the Secretary
of State that the conversion has been completed under applicable federal law. The
charter of the converting financial institution shall terminate automatically upon
issuance of the national financial institution charter.
(j) If the Commissioner disapproves the conversion plan, the Commissioner shall state
the reasons for the disapproval in writing and furnish them to the institution. The
institution shall be given a reasonable opportunity to amend the plan to eliminate
the reasons for disapproval.
(k) Authority for expedited conversion. Notwithstanding any other section of law or any organizational document of the financial
institution, the Commissioner may order that a charter conversion become effective
immediately when the Commissioner finds it is necessary for the protection of depositors,
investors, or the public. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001; amended 2005, No. 16, § 3, eff. July 1, 2005.)