(a)(1) Any Connecticut credit union or federal credit union may convert into a mutual savings bank, a mutual savings and loan association, or a mutual community bank, as defined in subsection (r) of section 36a-70, in accordance with the provisions of this section.

(2) Any conversion of a federal credit union pursuant to this section shall be authorized only if permitted by federal law and shall be subject to all requirements prescribed by federal law.

(3) The converting credit union shall file with the commissioner: (A) A proposed plan of conversion which shall include current financial reports, current delinquent loan schedules, a combined financial report if applicable, a proposed business plan, a three-year financial forecast prepared by a certified public accounting firm or other professional firm approved by the commissioner, analyses of the regulatory effect of the conversion brought about by a change in the regulator, a method and schedule for terminating any nonconforming activities that would result from such conversion; (B) a copy of the proposed certificate of incorporation and proposed bylaws; and (C) a certificate by the secretary of the converting credit union that the proposed conversion has been approved by the governing board and the members, in accordance with subdivision (4) of this subsection in the case of a converting Connecticut credit union, and in accordance with federal law in the case of a converting federal credit union.

(4) In the case of a converting Connecticut credit union, the plan of conversion shall require the approval of a majority of the governing board. After approving the plan of conversion, the governing board of the converting Connecticut credit union shall establish the date and time of a regular or special meeting of members for vote on the proposal. Written notice of the meeting at which the proposal is to be considered together with a mail ballot and a disclosure statement shall be hand-delivered or mailed to each member, at such member's last-known address as shown on the records of the converting Connecticut credit union, not more than thirty days or less than fourteen days prior to the date of the meeting. The disclosure statement shall include, at a minimum, a description of (A) the reasons for the proposed conversion; (B) the differences between membership rights in the converting credit union and depositor rights in the proposed mutual savings bank, mutual savings and loan association or mutual community bank; and (C) the significant differences between the authorized powers of the converting credit union and those of the proposed mutual savings bank, mutual savings and loan association or mutual community bank. The notice, disclosure statement and mail ballot shall be submitted to the commissioner for approval prior to distribution to members. Each member of the converting Connecticut credit union may cast one vote on the proposal. The affirmative vote of two-thirds of all the members voting, including those votes cast in person and those ballots properly completed and received by the converting Connecticut credit union prior to the time of the meeting, shall be required for approval of the conversion.

(b) The commissioner shall not approve the conversion unless the commissioner makes the considerations, determinations and findings required by subsections (c), (d) and (e) of this section.

(c) The commissioner shall not approve the conversion unless the commissioner considers the following factors: (1) The population of the area to be served by the proposed mutual Connecticut bank; (2) the adequacy of existing banking facilities in the area to be served by the proposed mutual Connecticut bank; and (3) the character and experience of the proposed directors and officers.

(d) The commissioner shall not approve the conversion unless the commissioner determines that: (1) The converting credit union has complied with all applicable provisions of law; (2) the converting credit union has equity capital at least equal to the minimum equity capital required for the organization of the type of mutual Connecticut bank to which it is converting; (3) the proposed conversion will serve the public necessity and convenience; (4) conditions in the locality in which the proposed mutual Connecticut bank will transact business afford reasonable promise of successful operation; (5) the proposed directors and executive officers possess capacity and fitness for the duties and responsibilities with which they will be charged; and (6) the programs, policies and procedures of the converting credit union relating to anti-money-laundering activity are adequate, and the converting credit union has a record of compliance with anti-money-laundering laws and regulations. If the commissioner cannot make such determination with respect to any such proposed director or proposed executive officer, the commissioner may refuse to allow such proposed director or proposed executive officer to serve in such capacity in the proposed mutual Connecticut bank. As used in this subsection, “executive officer” means every officer of the proposed mutual Connecticut bank who participates or has authority to participate, other than in the capacity of a director, in major policy-making functions of the proposed mutual Connecticut bank, regardless of whether such officer has an official title or whether such officer's title contains a designation of assistant or whether such officer serves without salary or other compensation. The vice president, the chief financial officer, secretary and treasurer of the proposed mutual Connecticut bank are presumed to be executive officers, unless, by resolution of the governing board or by the proposed mutual Connecticut bank's bylaws, any such officer is excluded from participation in major policy-making functions, other than in the capacity of a director of the proposed mutual Connecticut bank, and such officer does not actually participate in major policy-making functions.

(e) The commissioner shall not approve the conversion unless the commissioner finds that the proposed mutual Connecticut bank will provide adequate services to meet the banking needs of all community residents, including low-income residents and moderate-income residents in accordance with a plan submitted by the converting credit union to the commissioner, in such form and containing such information as the commissioner may require. Upon receiving any such plan, the commissioner shall make the plan available for public inspection and comment at the Department of Banking and cause notice of its submission and availability for inspection and comment to be published in the department's weekly bulletin. With the concurrence of the commissioner, the converting credit union shall publish, in the form of a legal advertisement in a newspaper having a substantial circulation in the area, notice of such plan's submission and availability for public inspection and comment. The notice shall state that the inspection and comment period will last for a period of thirty days from the date of publication. The commissioner shall not make such finding until the expiration of such thirty-day period. In making such finding, the commissioner shall consider, among other factors, whether the plan identifies specific unmet credit and consumer banking needs in the local community and specifies how such needs will be satisfied, provides for sufficient distribution of banking services among branches or satellite devices, or both, located in low-income neighborhoods, contains adequate assurances that banking services will be offered on a nondiscriminatory basis and demonstrates a commitment to extend credit for housing, small business and consumer purposes in low-income neighborhoods.

(f) If the conversion is approved by the commissioner and the commissioner receives notification from the converting credit union that all approvals required under federal law, including approvals needed for deposit insurance by the Federal Deposit Insurance Corporation or its successor agency have been obtained and that any waiting period prescribed by federal law has expired, a certificate of authority to commence business shall be issued by the commissioner. After receipt of the certificate of authority, the converting credit union shall promptly file such certificate of authority and its certificate of incorporation with the Secretary of the State and with the town clerk of the town in which its principal office is located. Upon such filing, the license of the converting credit union shall automatically lapse and the converting credit union shall cease to be a credit union and shall become a mutual savings bank, mutual savings and loan association or mutual community bank, as the case may be. Upon such conversion, the converted mutual Connecticut bank shall possess all of the rights, privileges and powers granted to it by its certificate of incorporation and by the provisions of the general statutes applicable to the type of institution into which it converted, and all of the assets and business of the converting credit union shall be transferred to and vested in it without any deed or instrument of conveyance, provided the converting credit union may execute any deed or instrument of conveyance as is convenient to confirm such transfer. The converted mutual Connecticut bank shall be subject to all of the duties, relations, obligations and liabilities of the converting credit union, whether as debtor, depository or otherwise, and shall be liable to pay and discharge all such debts and liabilities, to perform all such duties in the same manner and to the same extent as if the converted mutual Connecticut bank had itself incurred the obligation or liability or assumed the duty or relation. All rights of creditors of the converting credit union and all liens upon the property of such credit union shall be preserved unimpaired and the converted mutual Connecticut bank shall be entitled to receive, accept, collect, hold and enjoy any and all gifts, bequests, devises, conveyances and appointments in favor of or in the name of the converting credit union and whether made or created to take effect prior to or after the conversion.

(g) Within ninety days after the conversion, the converted mutual Connecticut bank shall record a certificate, signed by the secretary and stating that the conversion is effective, in the office of the town clerk in each town in this state where the converted mutual Connecticut bank owns real property.

(h) The converted mutual Connecticut bank may not exercise any of the fiduciary powers granted to Connecticut banks by law until express authority therefor has been given by the commissioner.

(P.A. 02-73, S. 70; P.A. 03-84, S. 72; 03-196, S. 17; 03-259, S. 27; P.A. 04-257, S. 59.)

History: P.A. 03-84 changed “Commissioner of Banking” to “commissioner”, effective June 3, 2003; P.A. 03-196 deleted requirement in Subsec. (a)(4) that notice, disclosure statement and mail ballot comply with requirements of Appendix A to 12 CFR Part 708a, as from time to time amended, effective July 1, 2003; P.A. 03-259 added Subsec. (d)(6) re anti-money-laundering activity and compliance; P.A. 04-257 made a technical change in Subsec. (a)(4), effective June 14, 2004.