6-07.2-19. Voluntary liquidation of a credit union or cooperative financial institution
1. A credit union or cooperative financial institution may go into voluntary liquidation
following a vote of the majority of the board of directors and approval by the majority of
its members in writing or by a vote in favor of the liquidation by a majority of the
members of the credit union or cooperative financial institution at a regular meeting of
the members or at a special meeting called for that purpose.
a. When authorization for liquidation is to be obtained at a meeting of members:
(1) Notice in writing must be given to each member at least ten days before the
meeting and the notice must inform members they have the right to vote on
the proposed liquidation.
(2) The minutes of the meeting must show the number of members present and
the number that voted for and against liquidation.
b. If approval by a majority of all members of a credit union is not obtained at the
meeting of members, authorization for voluntary liquidation may be obtained by
having a majority of members sign a statement in substantially the following form:
We the undersigned members of the _____ Credit Union, Charter No. _____,
hereby request the dissolution of our credit union.
c. If approval by a majority of all members of a cooperative financial institution is not
obtained at the meeting of members, authorization for voluntary liquidation may
be obtained by having a majority of members sign a statement in substantially the
following form: We the undersigned members of the _____ cooperative financial
institution, Charter No. _____, hereby request the dissolution of our cooperative
financial institution.
2. The board of directors of a credit union or cooperative financial institution in voluntary
liquidation:
a. Is responsible for conserving the assets, for expediting the liquidation, and for
equitably distributing the assets to members.
b. Shall determine all persons handling or having access to funds of the credit union
or cooperative financial institution are adequately covered by surety bond.
c. Shall appoint a custodian for the credit union's or cooperative financial
institution's records that are to be retained for five years after the charter is
canceled.
d. 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. A
liquidating agent must be adequately bonded for faithful performance of the
agent's duties, and the coverage must remain in effect or the discovery period
extended for at least four months after the final distribution of assets.
3. The supervisory committee, a certified public accountant hired by the supervisory
committee, or if the bylaws do not establish a supervisory committee, a certified public
accountant hired by the board of directors, is responsible for making periodic audits of
the credit union's or cooperative financial institution's records, at least quarterly, during
the period of liquidation.
4. Within three days after the decision of the board of directors to submit the question of
liquidation to the members, the president shall notify the commissioner and the
regional director of the national credit union administration or federal deposit insurance
corporation as appropriate in writing, setting forth in detail:
a. The reasons for the proposed action;
b. The previous month-end balance sheet and income statement; and
c. A written plan for the liquidation of assets, payment of creditors, and payment of
shares to be completed within one year of the date of membership approval to
liquidate.
5. Within three days after the action of the members on the question of liquidation, the
president shall notify the commissioner and the regional director of the national credit
union administration or federal deposit insurance corporation as appropriate in writing
as to whether a majority of the members approved the proposed liquidation.
6. Within ten days of the decision to liquidate by the board of directors, a notice of the
decision must be handed to each member, electronically distributed, or mailed to the
member's last-known address to confirm in writing the shares and deposits held by the
member in the credit union or cooperative financial institution and the loans owed by
the member to the credit union or cooperative financial institution.
7. Within ten days of the approval of a majority of the members of a credit union or
cooperative financial institution of a proposal to liquidate, the board of directors of the
credit union or cooperative financial institution shall have prepared and mailed to all
creditors a notice of liquidation containing instructions to present claims to the credit
union or cooperative financial institution within ninety days for payment. New creditor
claims subsequent to this notice which are necessary for the continued operation of
the credit union during liquidation must continue to be paid upon authorization of the
board of directors or liquidating agent.
8. Immediately upon the decision of the membership to liquidate, the credit union or
cooperative financial institution may continue to do all things under the original
corporate name of the institution, to sue and be sued, to execute conveyances and
other instruments, to take, hold, and own property, and to do all other things as may be
necessary to realize upon the institution's remaining assets for the benefit of the
institution's members, but not to engage or continue in any new or other business
under the institution's charter or otherwise. At the discretion of the board of directors or
the liquidating agent, transactions upon membership transactional accounts may
continue to be honored up to the federal insurance limit until the accounts are sold or
otherwise liquidated.
9. At the commencement of voluntary liquidation of a credit union or cooperative financial
institution, 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 or account number, share balance, and loan balance of each member.
10. Credit unions or cooperative financial institutions in the process of voluntary liquidation
shall file with the commissioner a financial and statistical report as of December thirty-
first or within thirty days after such date. Additional reports, as determined by the
commissioner to be necessary, must be furnished promptly on written request.
11. When deemed advisable by the commissioner, an examination of the books and
records of a credit union or cooperative financial institution may be made before,
during, or following completion of voluntary liquidation. The commissioner shall set
fees for the examination at an hourly rate sufficient to cover all reasonable expenses of
the department of financial institutions associated with the examination. Fees must be
collected by the commissioner and deposited in the financial institutions regulatory
fund.
12. If at any time during the liquidation of credit union assets or cooperative financial
institution, it is found the value of remaining assets will not be sufficient to cover the
claims of creditors and shareholders, the board of directors or, if appointed, the
liquidating agent shall immediately notify the commissioner and the regional director of
the national credit union administration or federal deposit insurance corporation as
appropriate. Further liquidation of credit union or cooperative financial institution
assets or distributions to shareholders after notice requires written approval from the
commissioner.
13. With the written approval of the commissioner, a partial distribution of the credit union's
or cooperative financial institution'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 the authority. Partial
distributions cannot exceed the national credit union share insurance limit.
14. When all assets of the credit union or cooperative financial institution have been
converted to cash or found to be worthless and all loans and debts owing to it have
been collected, sold, or found to be uncollectible and all obligations of the credit union
or cooperative financial institution have been paid, with the exception of amounts due
its members:
a. The books must be closed and the pro rata distribution to members computed.
This computation must be based on the total amount in each member's share
accounts as of the date the board of directors voted to voluntarily liquidate.
b. 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.
c. Promptly, funds must be distributed to each member. The funds must be mailed
to such members at their last-known addresses, electronically transmitted to the
members designated account, or handed to them in person.
d. The passbooks or written confirmations submitted by members to verify balances
must be retained with the credit union or cooperative financial institution records.
e. Unclaimed share accounts subject to the escheat or abandoned property laws of
the state or the state of the members' residence must be paid to the state as
required by such laws.
f. The commissioner must be promptly notified of the date final distribution of assets
to the members is started.
g. In the event of a loss on members share accounts, a claim must be submitted by
the board of directors or the liquidating agent if appointed, to the national credit
union administration or federal deposit insurance corporation as appropriate,
private share insurance if available, and bonding company.
15. Within one hundred twenty days after the final distribution to members is started, the
credit union or cooperative financial institution shall furnish to the commissioner's
office a schedule of unpaid claims. The board of directors of the credit union or
cooperative financial institution or the liquidating agent if appointed shall report money
in the account of a member who failed to surrender their passbooks or confirm their
balances, final distribution checks not cashed within one hundred twenty days, and
any unpaid claims to the unclaimed property division of the board of university and
school lands pursuant to chapter 47-30.2.
