12 U.S.C. § 1771: Conversion from Federal to…

Summary

A Federal credit union can become a State credit union if the board first votes to put the idea to the members and sets a date for the vote. The board must send written notice to every member by mail or in person between 30 and 7 days before the vote. A majority of the members who vote must approve the change. Within 10 days after the vote, the president or vice president and the secretary must file signed, sworn statements with the Administration saying how the vote turned out. If approved, the credit union must finish whatever the State requires within 90 days and send a copy of the new State charter to the Administration within 10 days after getting it. When filed, the credit union stops being Federal and the new State credit union gets the same assets and owes the same debts. A State credit union can become Federal by following its State’s rules to allow the change, filing proof of that with the Administration so the Board is satisfied, and filing the required organization certificate. When the Board approves, the credit union becomes Federal on the date it stops being a State credit union and keeps the same assets and responsibilities.

Title 12, §1771

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(a)A Federal credit union may be converted into a State credit union under the laws of any State, the District of Columbia, the several Territories and possessions of the United States, the Panama Canal Zone, or the Commonwealth of Puerto Rico, by complying with the following requirements:

(1)The proposition for such conversion shall first be approved, and a date set for a vote thereon by the members (either at a meeting to be held on such date or by written ballot to be filed on or before such date), by a majority of the directors of the Federal credit union. Written notice of the proposition and of the date set for the vote shall then 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 thirty nor less than seven days prior to such date. Approval of the proposition for conversion shall be by the affirmative vote of a majority of the members of the credit union who vote on the proposal. The written notice of the proposition shall in boldface type state that the issue will be decided by a majority of the members who vote.

(2)A statement of the results of the vote, verified by the affidavits of the president or vice president and the secretary, shall be filed with the Administration within ten days after the vote is taken.

(3)Promptly after the vote is taken and in no event later than ninety days thereafter, if the proposition for conversion was approved by such vote, the credit union shall take such action as may be necessary under the applicable State law to make it a State credit union, and within ten days after receipt of the State credit union charter there shall be filed with the Administration a copy of the charter thus issued. Upon such filing the credit union shall cease to be a Federal credit union.

(4)Upon ceasing to be a Federal credit union, such credit union shall no longer be subject to any of the provisions of this chapter. The successor State credit union shall be vested with all of the assets and shall continue responsible for all of the obligations of the Federal credit union to the same extent as though the conversion had not taken place.

(b)(1)A State credit union, organized under the laws of any State, the District of Columbia, the several Territories and possessions of the United States, the Panama Canal Zone, or the Commonwealth of Puerto Rico, may be converted into a Federal credit union by (A) complying with all State requirements requisite to enabling it to convert to a Federal credit union or to cease being a State credit union, (B) filing with the Administration proof of such compliance, satisfactory to the Board, and (C) filing with the Administration an organization certificate as required by this chapter.

(2)When the Board has been satisfied that all of such requirements, and all other requirements of this chapter, have been complied with, the Board shall approve the organization certificate. Upon such approval, the State credit union shall become a Federal credit union as of the date it ceases to be a State credit union. The Federal credit union shall be vested with all of the assets and shall continue responsible for all of the obligations of the State credit union to the same extent as though the conversion had not taken place.

Notes & Related Subsidiaries

Editorial Notes

References in Text

For definition of Canal Zone, referred to in text, see section 3602(b) of Title 22, Foreign Relations and Intercourse.

Prior Provisions

A prior section 1771, act

June 26, 1934, ch. 750, § 21, as added

July 9, 1937, ch. 471, 50 Stat. 487, related to allotment of space in Federal buildings, prior to the amendment of act

June 26, 1934, by Pub. L. 86–354. See section 1770 of this title.

Amendments

1982—Subsec. (a)(1). Pub. L. 97–320 substituted “of the credit union who vote on the proposal” for “, in person or in writing”, and inserted provision that the written notice of the proposition shall in boldface type state that the issue will be decided by a majority of the members who vote. 1978—Subsec. (b). Pub. L. 95–630 substituted “Board” for “Administrator” in two places. 1970—Pub. L. 91–206 substituted “Administration” for “Bureau” and “Administrator” for “Director” wherever appearing.

Statutory Notes and Related Subsidiaries

Effective Date

of 1978 AmendmentAmendment by Pub. L. 95–630 effective on expiration of 120 days after Nov. 10, 1978, and transitional provisions, see section 509 of Pub. L. 95–630, set out as a note under section 1752 of this title.

§1771 Conversion From Federal to State Credit Union and From State to Federal Credit Union