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Can you summarize NDCC Chapter 6-06.1?
Banks and Banking > Voluntary Liquidation of Credit Unions
Short Summary
This legal document governs the voluntary liquidation of credit unions. It states that a credit union may go into voluntary liquidation with the approval of a majority of its members. The approval can be obtained either in writing or through a vote at a regular or special meeting of the members. If approval is not obtained at the meeting, a majority of members can sign a statement requesting the dissolution of the credit union. The document also specifies that within ten days of the board of directors’ decision to submit the question of liquidation to the members, the president must notify the commissioner in writing, providing detailed reasons for the proposed action. Additionally, within ten days of the members’ action on the question of liquidation, the president must notify the commissioner in writing regarding whether a majority of the members approved the proposed liquidation. Immediately on decision by the board of directors of a credit union to seek approval of the members for liquidation, payments on shares, withdrawal of shares including any transfer of shares to loans and interest, making investments of any kind, and granting of loans must be suspended pending action by members on the proposal to liquidate, and on approval by a majority of the members of such proposal, payments on shares, withdrawal of shares including any transfer of shares to loans and interest, making investments of any kind, and the making of loans must be permanently discontinued. Necessary expenses of operation must, however, continue to be paid on authorization by the board of directors or liquidating agent during the period of the liquidation. Immediately on decision by the board of directors, a notice of such decision must be handed to each member or mailed to the member’s last-known address together with a request that the member furnish the member’s passbook or confirm in writing the shares held by the member in the credit union and the loans owed by the member to the credit union. On approval of a majority of the members of a credit union of a proposal to liquidate, the board of directors of the credit union shall immediately have prepared and mailed to all creditors a notice of liquidation containing instructions to them to present their claims to the credit union within ninety days for payment. At the commencement of voluntary liquidation of a credit union, the treasurer or agent conducting the liquidation shall file with the commissioner a financial and statistical report and a schedule showing the name, book number, share balance, and loan balance of each member. Credit unions in the process of voluntary liquidation shall file with the commissioner a financial and statistical report as of December thirty-first within ten days after such date. Additional reports, as determined by the commissioner to be necessary, must be furnished promptly on written request. When deemed advisable by the commissioner, an examination of the books and records of a credit union may be made prior to, during, or following completion of voluntary liquidation. A fee for each examination must be assessed at the rate currently in effect for examinations of operating credit unions. Fees must be collected by the commissioner, transferred to the state treasurer, and deposited in the financial institutions regulatory fund. The board of directors of a credit union in voluntary liquidation is responsible for conserving the assets, for expediting the liquidation, and for equitably distributing the assets to members. The board of directors shall determine that all persons handling or having access to funds of the credit union are adequately covered by surety bond. The board of directors shall appoint a custodian for the credit union’s records that are to be retained for five years after the charter is canceled. The board of directors may appoint a liquidating agent and delegate part or all of these responsibilities to the agent and may authorize reasonable compensation for the agent’s services. Any such liquidating agent must be bonded for faithful performance of the agent’s duties. The supervisory committee is responsible for making periodic audits of the credit union’s records, at least quarterly, during the period of liquidation. With the written approval of the commissioner, a partial distribution of the credit union’s assets may be made to its members from cash funds available on authorization by its board of directors or by a duly authorized liquidating agent whose appointment specifically includes such authority. When all assets of the credit union have been converted to cash or found to be worthless and all loans and debts owing to it have been collected or found to be uncollectible and all obligations of the credit union have been paid, with the exception of amounts due its members, the books must be closed and the pro rata distribution to members computed. The amount of gain or loss must be entered in each member’s share account and should be entered in the member’s passbook or statement of account. Promptly after the pro rata distribution to members has been computed, checks must be drawn for the amounts to be distributed to each member who has surrendered the member’s passbook or has given a written confirmation of the member’s balance. The checks must be mailed to such members at their last-known addresses or handed to them in person. The passbooks or written confirmations submitted by members to verify balances must be retained with the credit union records. The commissioner must be notified promptly of the date final distribution of assets to the members is started. Unclaimed share accounts which have been dormant for the period which makes them subject to the escheat or abandoned property laws of the state of North Dakota must be paid to the state as required by such laws. This legal document governs the process of voluntary liquidation of credit unions. It applies to credit unions that are undergoing voluntary liquidation. The document outlines the requirements for credit unions to provide certain information to the commissioner’s office within 120 days after the final distribution to members has started. This includes furnishing a schedule of unpaid claims due to members who failed to surrender their passbooks or confirm their balances, as well as unpaid claims due to members or creditors who failed to cash final distribution checks. The document also requires credit unions to provide schedules showing the details of unclaimed share accounts paid to the state, the distribution of assets to each member, and a summary report on the liquidation. Additionally, the credit union must submit a certificate of dissolution and liquidation signed under oath by the board of directors or agent who conducted the liquidation. The document also requires the credit union to provide the name and address of the custodian of its records, as well as the charter of the credit union. All records of the liquidated credit union necessary to establish that creditors were paid and that members’ shareholdings were equitably distributed must be retained by a custodian appointed by the board of directors of said credit union for a period of five years following the date of cancellation of the charter. On proof that distribution of assets has been made to members and within one year after receipt of the certificate of dissolution and liquidation, the commissioner shall cancel the charter of the credit union concerned. Further detailed instructions, information, and official forms pertaining to voluntary liquidations may be obtained from the commissioner’s office, Bismarck, North Dakota, 58505.
Whom does it apply to?
Credit unions undergoing voluntary liquidation
What does it govern?
Voluntary liquidation of credit unions
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No penalties are mentioned.
Jurisdiction
North Dakota