Sec. 36a-469c. Conversion of Connecticut or federal credit union into mutual savings bank, mutual savings and loan association or mutual community bank.
Sec. 36a-469c. Conversion of Connecticut or federal credit union into mutual
savings bank, mutual savings and loan association or mutual community bank.
(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.