Okla. Admin. Code § 180:10-3-3

Current through Vol. 42, No. 4, November 1, 2024

Section 180:10-3-3 - Conversion requirements

(a) To effect a conversion of charter, a credit union must comply with all requirements of the authority under which it was originally chartered and the requirements of the Board and file proof of such compliance with the Board.

(1)Conversion from a state-chartered credit union to a federally-chartered credit union.

(A) Upon approval of the proposition to convert to a federal credit union by a majority of the board of directors, it shall set a date for a meeting of membership, at which the individual members shall have the option to vote on the proposition, either in person at the meeting, or by written ballot to be filed on or before the date of the meeting. The board of directors promptly shall notify the Commissioner, in writing, of its approval of the proposition to convert to a federal credit union and the date set for the meeting of the members.

(B) Written notice of the meeting shall be delivered in person to such members, or sent to members in a format or medium by which members have agreed to receive account statements, at the address for such member appearing on the records of the credit union, not more than thirty (30) days nor less than seven (7) days prior to the date set for the meeting.

(C) In addition to setting forth the proposition for conversion and the date, time, and place of the meeting, the written notice of the meeting shall:

(i) inform the members of the opportunity to vote by written ballot and when, where, and how (on or before the date of the meeting) such written ballot shall be filed, which may include filing by electronic means;

(ii) contain a form of written ballot for the use of those members who will vote thereby instead of in person at the meeting; and

(iii) set forth, for the advance consideration of the members, a brief and accurate statement of reasons for and against the proposed conversion, including the effect, if any, it will have upon share holdings and obligations of members, and the policies and practices of the credit union.

(D) A copy of the meeting notice, verified by the affidavit of the secretary of the credit union, shall be delivered to the Commissioner at the same time, in advance of the meeting, that it is delivered to the members.

(E) In order for the proposition for conversion to be approved and acted upon further by the credit union, it must receive the affirmative vote of a majority of the members voting.

(F) A statement of the results of the member vote, verified by the affidavits of the president or vice president, and the secretary, shall be filed with the Commissioner within ten (10) days after the vote is taken.

(G) Within 30 days after receiving the statement of the results of the member vote, the Commissioner shall notify the credit union, in writing, of any findings, including the reasons therefor, that adversely affect the validity of the attempted conversion. If the requirements of this section have not been satisfied, the attempted conversion shall be ineffective and the credit union shall continue to be a state credit union, subject to the provisions of the Act, to the same extent as though the conversion had not been attempted.

(H) If the proposition for conversion is approved by the affirmative vote of a majority of all the members voting, the board of directors, promptly and in no event later than ninety (90) days after such approval, shall take such action on behalf of the credit union as may be necessary under the applicable federal law for the conversion of the credit union to a federally-chartered credit union. In addition, the board of directors promptly shall inform the Commissioner of the action so taken and, from time to time, of the progress of such action.

(I) Within ten (10) days after the credit union receives a federal credit union charter, it shall file a copy thereof with the Commissioner. The Commissioner promptly shall notify the credit union, in writing, of the receipt of the national charter. The credit union shall cease to be a state-chartered credit union as of the close of business on the date such copy is received by the Commissioner, unless the credit union has been notified in writing or is notified in writing to the contrary, pursuant to subparagraph (G) of this paragraph, or such later date as specified by the approval of the conversion by the NCUA. Upon ceasing to be a state credit union, such credit union shall no longer be subject to any of the provisions of the Act, shall surrender its original charter certificate to the Commissioner, and shall file all appropriate documents with the Oklahoma Secretary of State necessary to reflect the conversion to a federal charter and the cessation of the credit union's state chartered organization. The successor federal credit union shall be vested with all the assets and shall continue to be responsible for all of the obligations of the state credit union to the same extent as though the conversion had not taken place.

(2)Conversion from a federally-chartered credit union to a state-chartered credit union.

(A) Any federal credit union may convert to a state credit union by:

(i) complying with all of the requirements of the federal law applicable for conversion to a state credit union, if any, or to cease being a federal credit union;

(ii) filing with the Commissioner proof of such compliance satisfactory to the Commissioner;

(iii) filing with the Commissioner an organization certificate as required by the Act; and

(iv) filing with the Commissioner satisfactory proof that all requirements of the Act and this Title have been complied with.

(B) Any federal credit union that desires to convert to a state credit union may, after approval of its board of directors, and prior to taking the steps prescribed above, file with the Commissioner a preliminary application for conversion.

(C) Such preliminary application shall be on a form prescribed by the Commissioner.

(D) The preliminary application for conversion shall be filed with the Commissioner and it shall authorize the Commissioner to make an examination of the applicant's books and records, subject to the special examination fee set forth in the Act.

(E) The preliminary application shall:

(i) be accompanied by a current financial statement;

(ii) be certified by the treasurer as being correct;

(iii) be verified by the president or vice president of the credit union;

(iv) be accompanied by a statement of the credit union's policies and procedures with respect to loans to members, including interest rates and charges incident to making loans, maturities of loans, unsecured loan limit, types of securities accepted, and requirements for amortization;

(v) list all outstanding unsecured loans with unpaid balances;

(vi) list all outstanding loans with maturities in excess of five (5) years;

(vii) list a schedule of all loans which are delinquent two (2) months or more;

(viii) provide a statement of the kinds of accounts (share, savings, deposit, or other) which members are required or permitted to maintain;

(ix) provide a description of its real property holdings;

(x) provide a description of investments other than loans;

(xi) state the names and locations of depositories of its funds;

(xii) provide a description of any services rendered to or on behalf of members or the public other than accepting and maintaining accounts of members and making loans to members;

(xiii) provide a statement as to the field of membership to which the credit union intends to offer services, which shall be single common bond, multiple common bond, or community credit union. If the credit union intends to be a community credit union, it shall submit an application for a community field of membership which describes its proposed community;

(xiv) be accompanied also by a preliminary plan which shall show what the credit union proposes to do about any of its policies, procedures, practices, assets, and liabilities, which do not comply with the Act, or this Title, if its conversion to a state credit union should be approved; and

(xv) be accompanied by a proposed certificate of incorporation and bylaws.

(F) The Board shall have the sole discretion as to approval of the preliminary application and shall disapprove the application if it determines that the credit union is unable to comply with all of the requirements of the Act and this Title.

(G) Upon the conditional approval of a preliminary application for a conversion into a state credit union, the credit union shall proceed promptly to comply with all of the requirements of the federal law applicable for conversion to a state credit union. The credit union may also pursue compliance with federal law requirements while concurrently seeking approval from the Board of its preliminary application.

(H) Within 90 days after compliance with all of the requirements of the federal law applicable for conversion to a state credit union and compliance with all of the conditions prescribed in the conditional approval, the credit union shall file with the Commissioner an executed certificate of incorporation, together with its approved bylaws, as required by the Act, which shall constitute its formal application for conversion to a state credit union. Such certificate shall be accompanied by evidence satisfactory to the Commissioner showing compliance by the credit union with all requirements of the federal law applicable for conversion to a state credit union. For good cause, the Commissioner may extend the time period during which the credit union must submit the documents described in this paragraph.

(I) Upon approval of the organization's certificate by the Commissioner, the credit union shall become a state credit union as of the later of (i) the date it ceases to be a federal credit union, as designated by the NCUA, and (ii) the date its certificate of incorporation is filed with the Oklahoma Secretary of State. It shall be vested with all of the assets and shall continue responsibility for all of the obligations of the federal credit union to the same extent as though conversion had not taken place. All directors and credit committee members holding office at the time the credit union becomes a state credit union shall hold office in accordance with the previous election.

(3)Conversion from a state-chartered credit union to a mutual savings bank.

(A) Except as provided in subparagraph (B), a state-chartered credit union may rely on Title 6 O.S. § 2023 for authority to convert to a mutual savings bank or savings association. The provisions of federal law and regulations will control the internal governance issues in the conversion. A copy of all notices submitted to the NCUA must also be provided to the Department at the same time such notice is submitted to the NCUA. A copy of all notices to, and communications with, the converting credit union's members must also be provided to the Department at the same time such notice or communication is provided to the members.

(B) Notwithstanding approval by the NCUA of the methods by which the membership vote was taken for conversion of the credit union to a mutual savings bank, the Board must separately approve the membership vote. After the vote of the credit union members that approves the conversion, the credit union must submit the results of the vote to the Board and request its review of the notices provided to the members and the procedure followed with respect to the membership vote. The Board may disapprove of the vote and the conversion if it determines that either:

(i) notice to the members did not comply with the credit union's bylaws or NCUA requirements; or

(ii) the membership vote for conversion was not the product of deliberate and informed consent by the voting members.

Okla. Admin. Code § 180:10-3-3

Amended at 18 Ok Reg 1105, eff 5-11-01; Amended at 26 Ok Reg 1413, eff 6-11-09