§ 36101. Suspension, voluntary liquidation, and involuntary liquidation
(a) Suspension. If it appears that any credit union is bankrupt or insolvent or that it has willfully
violated this chapter or is operating in an unsafe or unsound manner, the Commissioner
shall issue an order temporarily suspending the credit union’s operations for not
more than 60 days. The governing body shall be given notice by registered mail of
the suspension, which notice shall include a list of the reasons for the suspension
or a list of the specific violations of this chapter. The Commissioner shall also
notify the insuring organization of any suspension. Upon receipt of the suspension
notice, the credit union shall immediately cease all operations. The directors of
the credit union shall then file with the Commissioner a reply to the suspension notice,
request a hearing to present a plan of corrective actions proposed if they desire
to continue operations, or request that the credit union be declared insolvent and
a liquidating agent appointed. If the credit union fails to answer the suspension
notice or request a hearing with the Commissioner, the Commissioner may then revoke
the credit union’s charter, appoint a liquidating agent, and liquidate the credit
union in accordance with subsection (d) of this section.
(b) Voluntary liquidation. At a meeting specially called to consider the matter, a majority of the entire membership
may vote to dissolve the credit union if a copy of the notice was mailed to the members
of the credit union at least 10 days prior to the meeting. Any member not present
at the meeting may within the next 20 days vote in favor of dissolution by signing
a statement in a form approved by the Commissioner, and the vote shall have the same
force and effect as if cast at the meeting. The credit union shall thereupon immediately
cease to do business except for the purposes of liquidation, and the chairperson of
the governing body and secretary shall, within five days following the meeting, notify
the Commissioner of the credit union’s intention to liquidate and shall include in
the notification a list of the names and addresses of the directors and officers of
the credit union.
(c) Involuntary liquidation. If the Commissioner, after issuing notice of suspension and providing an opportunity
for a hearing, rejects the credit union’s plan to continue operations, the Commissioner
may issue a notice of involuntary liquidation and appoint a liquidating agent. The
credit union may request a stay of execution of that action by appealing to the Superior
Court of Washington County. Involuntary liquidation may not be ordered before the
suspension procedures outlined in subsection (a) of this section are completed.
(d) Liquidating procedure. The credit union shall continue in existence for the purpose of discharging its debts,
collecting and distributing its assets, and doing all acts required in order to wind
up its business and may sue and be sued for the purpose of enforcing those debts and
obligations until its affairs are fully adjusted. The governing body or, in the case
of involuntary dissolution, the liquidating agent shall use the assets of the credit
union to pay: first, expenses incidental to liquidation including any surety bond
that may be required; second, any liability due nonmembers; third, deposits and savings
club accounts as provided in this chapter. Assets then remaining shall be distributed
to the members proportionately to the shares held by each member as of the date liquidation
was voted. As soon as the governing body or the liquidating agent determines that
all assets from which there is a reasonable expectancy of realization have been liquidated
and distributed as set forth in this section, it shall execute a certificate of liquidation
on a form prescribed by the Commissioner and file it with the Secretary of State.
The certificate shall, after filing or recording and indexing, be forwarded to the
Commissioner whereupon the credit union shall be dissolved.
(e) NCUA as liquidating agent. In the case in which the administrator of the National Credit Union Administration
is appointed liquidating agent, the Administrator shall have the right to be subrogated
to the rights of the members of the liquidating credit union. (Added 2005, No. 16, § 1, eff. July 1, 2005; amended 2021, No. 105 (Adj. Sess.), § 344, eff. July 1, 2022.)
§ 36102. Involuntary merger of credit union
(a) Notwithstanding any other provision of law, the Commissioner may initiate the involuntary
merger of a credit union that is insolvent or is in danger of insolvency or is operating
in an unsafe or unsound manner with any other credit union or may authorize a credit
union to purchase any of the assets of or assume any of the liabilities of any other
credit union that is insolvent or in danger of insolvency or is operating in an unsafe
or unsound manner if the Commissioner is satisfied that:
(1) an emergency requiring expeditious action exists with respect to such other credit
union;
(2) other alternatives are not reasonably available; and
(3) the public interest would best be served by approval of such merger, consolidation,
purchase, or assumption.
(b) The credit union may request a stay of the involuntary merger by appealing to the
Washington Superior Court.
(c)(1) Notwithstanding any other provision of law, the Commissioner may authorize an institution
whose deposits or accounts are insured to purchase any of the assets of or assume
any of the liabilities of a credit union that is insolvent or in danger of insolvency
or is operating in an unsafe or unsound manner.
(2) For purposes of the authority contained in this section, insured share and deposit
accounts of the credit union may, upon consummation of the purchase and assumption,
be converted to insured deposits or other comparable accounts in the acquiring institution,
and the Commissioner and the insuring organization shall be absolved of any liability
to the credit union’s members with respect to those accounts.
(d) Notwithstanding any other provision of law, the Commissioner may waive the need for
a membership vote of both the acquired and continuing credit union to approve the
involuntary merger and may waive the requirement that the governing body of the acquired
credit union approve the involuntary merger. (Added 2005, No. 16, § 1, eff. July 1, 2005.)
§ 36103. Conservatorship
(a) The Commissioner may, ex parte without notice, appoint himself or herself or an insuring
organization or any other person as conservator and immediately take possession and
control of the business and assets of any credit union in any case in which:
(1) The Commissioner determines that such action is necessary to conserve the assets of
any credit union or to protect the interests of the members of such credit union.
(2) A credit union, by a resolution of its governing body, consents to such an action
by the Commissioner.
(3) The Attorney General notifies the Commissioner in writing that a credit union has
been found guilty of a criminal offense.
(4) There is a willful violation of a cease and desist order that has become final.
(5) There is concealment of books, papers, records, or assets of the credit union or refusal
to submit books, papers, records, or affairs of the credit union for inspection to
any examiner or to any lawful agent of the Commissioner.
(6) The credit union is significantly undercapitalized and has no reasonable prospect
of becoming adequately capitalized.
(7) The credit union is critically undercapitalized.
(b) Not later than 14 days after the date on which the Commissioner takes possession and
control of the business and assets of a credit union pursuant to subsection (a) of
this section, such credit union may apply to the Superior Court of Washington County
for an order requiring the Commissioner to show cause why the Commissioner should
not be enjoined from continuing such possession and control. Except as provided in
this subsection, no court may take any action, except at the request of the Commissioner
by regulation or order, to restrain or affect the exercise of powers or functions
of the Commissioner as conservator.
(c) Except as provided in subsection (b) of this section, the Commissioner may maintain
possession and control of the business and assets of such credit union and may operate
such credit union until such time:
(1) as the Commissioner shall permit such credit union to continue business subject to
such terms and conditions as may be imposed by the Commissioner; or
(2) as such credit union is liquidated in accordance with the provisions of section 36101 of this title.
(d) The Commissioner may appoint such agents as he or she considers necessary in order
to assist the Commissioner in carrying out his or her duties as a conservator under
this subsection.
(e) All expenses incurred by the Commissioner in exercising his or her authority under
this subsection with respect to any credit union shall be paid out of the assets of
such credit union.
(f) The conservator shall have all the powers of the members, the directors, the officers,
and the committees of the credit union and shall be authorized to operate the credit
union in its own name or to conserve its assets in the manner and to the extent authorized
by the Commissioner.
(g) The authority granted by this subsection is in addition to all other authority granted
to the Commissioner under this title. (Added 2005, No. 16, § 1, eff. July 1, 2005; amended 2017, No. 11, § 8.)
§ 36104. Appointment of director and managing officers of troubled credit unions
The Commissioner shall approve any director elected or appointed to serve on the governing
body and any person appointed as the managing officer of a troubled credit union,
before the director or officer takes office. As used in this section, “troubled credit
union” means any credit union that, in the opinion of the Commissioner:
(1) is insolvent or is in danger of becoming insolvent;
(2) is not likely to be able to meet the demands of its members or to pay its obligations
in the normal course of business or is likely to incur losses that may deplete all
or substantially all of its capital; or
(3) is being operated in an unsafe and unsound manner. (Added 2005, No. 16, § 1, eff. July 1, 2005.)