7-9-39 - Voluntary merger.
7-9-39. Voluntary merger.
(1) Any credit union may merge with another credit union under the existing charter ofthe other credit union when all of the following have occurred:
(a) the majority of the directors of each merging credit union votes in favor of the mergerplan;
(b) the commissioner approves the merger plan;
(c) the majority of the members of each merging credit union present at a meeting calledfor the purpose of considering the merger plan votes to approve the merger plan, but a vote of themembership of the surviving credit union is not required if its board of directors determines thatthe merger will not have any significant effect on the organization, membership, or financialcondition of the credit union; and
(d) (i) the National Credit Union Administration or its successor federal depositinsurance agency approves the merger plan and commits to insure deposits of the surviving creditunion; or
(ii) the commissioner approves the surviving credit union to operate without federaldeposit insurance in accordance with Section 7-9-45.
(2) Upon merger, the chair of the board and secretary of each credit union shall execute,and file with the department, a certificate of merger setting forth:
(a) the time and place of the meeting of the board of directors at which the plan wasapproved;
(b) the vote by which the directors approved the plan;
(c) a copy of the resolution or other action by which the plan was approved;
(d) the time and place of the meeting of the members at which the plan was approved;
(e) the vote by which the members approved the plan; and
(f) the effective date of the merger, which shall be:
(i) the date on which the last approval or vote required under Subsection (1) wasobtained; or
(ii) a later date specified in the merger plan.
(3) On the effective date of any merger:
(a) all property, property rights, and interests of the merged credit union shall vest in thesurviving credit union without deed, endorsement, or other instrument of transfer; and
(b) all debts, obligations, and liabilities of the merged credit union are considered to havebeen assumed by the surviving credit union.
(4) Except as provided in Subsection (5)(b), if the surviving credit union is charteredunder this chapter, the residents of a county in the field of membership of the merging creditunion may not be added to the field of membership of the surviving credit union, except that thesurviving credit union:
(a) may admit as a member any member of the merging credit union that is not in thefield of membership of the surviving credit union if the member of the merging credit union wasa member of that credit union at the time of merger; and
(b) may service any member-business loan of the merging credit union until themember-business loan is paid in full.
(5) (a) This section shall be interpreted, whenever possible, to permit a credit unionchartered under this chapter to merge with a credit union chartered under any other law if thepreservation of membership interest is concerned.
(b) The commissioner may under Subsection (1)(b) approve a merger plan that includesthe addition of the residents of a county in the field of membership of the merging credit union tothe field of membership of the surviving credit union if the commissioner finds that:
(i) the expansion of the field of membership of the surviving credit union is necessary forthat credit union's safety and soundness; and
(ii) the expanded field of membership of the surviving credit union meets the criteriastated in Subsection 7-9-52(3)(c).
(6) If the commissioner approves a merger plan under Subsection (5)(b) under which thesurviving credit union's field of membership after the merger will include residents of more thanone county, Subsections (6)(a) through (e) apply to the surviving credit union.
(a) The domicile-county of the surviving credit union is:
(i) if the credit union does not have a field of membership under Subsection 7-9-53(2)(c)or (2)(d), the county in which the credit union has located the greatest number of branches as ofthe date the merger is effective; or
(ii) if the credit union has a field of membership under Subsection 7-9-53(2)(c) or (2)(d),the county that is the domicile-county of the surviving credit union under Section 7-9-53;
(b) Within the surviving credit union's domicile-county, the surviving credit union mayestablish, relocate, or otherwise change the physical location of the credit union's:
(i) main office; or
(ii) branch.
(c) Within a county other than the domicile-county that is in the field of membership ofthe surviving credit union after the merger, the surviving credit union may not:
(i) establish a main office or branch if the main office or branch was not located in thecounty as of the date that the merger is effective;
(ii) participate in a service center in which it does not participate as of the date that themerger is effective; or
(iii) relocate the surviving credit union's main office or a branch located in the county asof the date that the merger is effective unless the commissioner finds that the main office orbranch is being relocated within a three-mile radius of the original location of the main office orbranch.
(d) After the merger, the surviving credit union may admit as a member:
(i) a person in the surviving credit union's field of membership after the date that themerger is effective; or
(ii) a person belonging to an association that:
(A) is added to the field of membership of the credit union; and
(B) resides in the domicile-county of the surviving credit union, as defined in Section7-9-53.
(e) In addition to any requirement under this Subsection (6), a surviving credit unionshall comply with any requirement under this title for the establishment, relocation, or change inthe physical location of a main office or branch of a credit union.
Amended by Chapter 327, 2003 General Session