§ 35101. Conversions

(a) General. The provisions of this chapter shall apply whenever a federal credit union seeks to convert to a Vermont credit union or whenever a Vermont credit union seeks to convert to a federal credit union; provided, however, that conversion from a Vermont credit union to a federal credit union shall be as permitted in federal law and shall not require the Commissioner's approval, and that federal law shall be controlling to the extent the laws of this state are inconsistent.

(b) Types of conversions. The types of conversions permitted under this chapter are as follows:

(1) conversion from a federal credit union to a Vermont credit union; and

(2) conversion from a Vermont credit union to a federal credit union.

(c) Manner of conversion. Any credit union may convert under this chapter in the following manner:

(1) The governing body of the credit union shall approve the plan of conversion by at least a majority vote, unless a higher percentage is required by the credit union's organizational documents.

(2) The approved plan of conversion, together with a certified copy of the authorizing resolution adopted by the governing body of the credit union, shall be submitted to the Commissioner for approval pursuant to the requirements and procedures of subchapter 8 of chapter 220 of this title, except as provided in subsection (a) of this section.

(3) The plan of conversion, as approved by the Commissioner, shall be submitted to members of the credit union for their approval at an annual meeting or at a special meeting called for that purpose.

(4) The approved plan shall be finalized as provided in subsection 35101(f) of this section.

(d) Contents of plan of conversion. The plan of conversion shall include:

(1) the name of the credit union and its location;

(2) the type of credit union that the resulting credit union is to be;

(3) a method and schedule for terminating any nonconforming activities that would result from such conversion;

(4) a statement of the competitive impact resulting from such conversion, including the loss of particular financial services in the market area resulting from such conversion;

(5) a statement that the conversion is subject to approval of the Commissioner, except for conversions from a Vermont credit union to a federal credit union;

(6) a statement that the conversion is subject to approval of the credit union's members; and

(7) such additional information as the Commissioner may require.

(e) Member voting requirements. A majority of the members of the credit union casting votes at a duly called and noticed meeting, unless a higher percentage is required by the credit union's organizational documents, is necessary to approve the plan of conversion at the meeting. For purposes of this section, written notice must be delivered in person to each member or mailed to each member at the address for such member appearing on the records of the credit union, not more than 30 days nor less than seven days prior to the date of the meeting. Notice may be given electronically if the member has specifically requested or consented to electronic notification of meetings. An affirmative vote constitutes approval of the adoption of any amendments to the organizational documents of the credit union that are necessary to effect the transaction.

(f) Finalizing the plan of conversion. Except as provided in subsection (g) of this section, the credit union shall effect its conversion as follows:

(1) Upon approval by the members, the credit union shall submit the executed conversion plan to the Commissioner, together with all necessary amendments to the credit union's organizational documents, each certified by an officer of the credit union.

(2) The Commissioner shall issue to the resulting credit union a certificate specifying the name of the converting credit union and the name and organizational structure of the resulting credit union. The resulting credit union shall file one copy of the certificate issued by the Commissioner with the Secretary of State for recording. The certificate shall be conclusive evidence of the conversion and the correctness of all proceedings relating to the conversion in all courts and places. The certificate may be filed in any land records office to evidence the new name in which property of the converting credit union is to be held.

(3) Unless a later date is specified in the conversion plan, the conversion becomes effective upon filing of the certificate as provided in subdivision (2) of this subsection, and the former charter of the converting credit union shall terminate automatically. The Commissioner may file or order any credit union to file conforming documents with the Secretary of State.

(g) Completion of conversion into federal credit union. Upon completion of a conversion into a federal credit union, the federal credit union shall certify in writing to the Commissioner and the Secretary of State that the conversion has been completed under applicable federal law. The charter of the converting credit union shall terminate automatically upon issuance of the federal credit union charter.

(h) If the Commissioner disapproves the conversion plan, the Commissioner shall state the reasons for the disapproval in writing and furnish them to the credit union. The credit union shall be given a reasonable opportunity to amend the plan to eliminate the reasons for disapproval.

(i) Authority for expedited conversion. Notwithstanding any other section of law or any organizational document of the credit union, the Commissioner may order that a charter conversion become effective immediately when the Commissioner finds it is necessary for the protection of members or the public.

(k) Regulations of the Commissioner. The Commissioner shall issue such regulations governing the conversion of a credit union organized under this chapter to a federal credit union and the conversion of a federal credit union to a credit union organized under this chapter as the Commissioner deems necessary or appropriate. (Added 2005, No. 16, § 1, eff. July 1, 2005.)