§ 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.)