§ 17502. Assumption of liabilities

(a) Assumption of liabilities. Subject to the approval of the Commissioner, any Vermont financial institution may, by contract, assume all or any part of the deposit and other liability of any other financial institution or financial institutions and may accept in payment or part payment for the obligations so assumed, all or any part of the assets of the other financial institution; or may so accept in payment or part payment, the notes or other undertakings of the other financial institution, secured by a pledge to the assuming financial institution, or secured by any other lien or trust for its benefit, with respect to all or any part of the assets of the other financial institution or financial institutions, at least equal in value to the amount of the deposit liability assumed. Such contracts of assumption, notes, undertakings, liens, or trust agreements may be in any form approved by the Commissioner which provides for equality of treatment of all depositors and for the full payment of all assumed deposits on demand. All depositors whose deposits are so assumed shall be notified by mail of the assumption and any depositor objecting thereto within 60 days of that notice shall be paid the full amount of the assumed deposit, with interest to the date of the objection, computed at the proportional part of the interest rate to be paid for that period by the Vermont financial institution on other deposits, or if no rate has been determined, at the rate for the interest period next preceding the notice, not to exceed the rate prescribed by the directors for the then current period, if a rate has been so prescribed for the period.

(b) Contracts for assumption of deposit liability. Contracts for the assumption of deposit liability may be entered into independently of merger of financial institutions or as a part of any such merger, and the Commissioner may authorize under the provisions of chapter 205 of this title the assuming financial institution to establish a branch at any location at which the other financial institution might have conducted its business. However, such a contract shall not be valid unless the governing bodies of the signatory financial institutions have been authorized in regard thereto by a vote of the investors or mutual voters of the financial institutions. That authorization requires the affirmative vote, in the case of a mutual or cooperative financial institution, of a majority of the mutual voters, and in the case of an investor-owned financial institution, requires the vote provided in its organizational documents for amending the charter and in any event, at least the affirmative vote of a majority of the equity interests, as well as the affirmative vote of a majority of each class of equity interest present and voting at the meeting. All classes of equity interests may vote on the question whether or not the rights of any class to vote generally have been suspended under the terms of the charter by reason of nonpayment of dividends. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)