COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 191
(By Senators Minard, Sharpe and Jenkins)
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[Originating in the Committee on Banking and Insurance;
reported January 22, 2003.]
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A BILL to amend and reenact section three, article ten, chapter
thirty-one-c of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, relating to the procedure for
a state-chartered credit union to convert to a federal charter
or a charter of another state; removing the requirement of
having a hearing; and increasing the period of required notice
to members prior to voting on the issue of conversion.
Be it enacted by the Legislature of West Virginia:
That section three, article ten, chapter thirty-one-c of the
code of West Virginia, one thousand nine hundred thirty-one, as
amended, be amended and reenacted to read as follows:
ARTICLE 10. CHANGE IN CORPORATE STATUS.
§31C-10-3. Conversion.
(a) A credit union incorporated under the laws of this state
may be converted to a credit union organized under the laws of any
other state or under the laws of the United States by complying with the following requirements:
(1) The proposition for such the 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
West Virginia state 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 sixty or less than seven fourteen days
prior to such date. Approval of the proposition for conversion
shall be by the affirmative vote of two thirds of the members
voting in person or in writing;
(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 commissioner of banking within ten days
after the vote is taken; however, no West Virginia state-chartered
credit union may convert its charter to that of another state
unless: (i) The conversion is approved by the commissioner of
banking in writing after notice and hearing on the matter; (ii) the
other state allows conversions of its credit unions to a West
Virginia state charter on a reciprocal basis; and (iii) the
majority, or in the event the credit union operates offices in more
than two states, the plurality, of the credit union's members are
residents of that other state. To the extent that an out-of-state
credit union created by conversion seeks to conduct business
through a branch or service facility in West Virginia, the provisions of section six, article two of this chapter shall apply;
(3) Promptly after the vote approving the conversion is taken,
or after approval of the commissioner of banking, where such
approval is required, and in no event later than ninety days
thereafter, the credit union shall take such action as may be
necessary under the applicable federal or state law to make it a
federal credit union or credit union of another state and within
ten days after receipt of the federal credit union charter or
out-of-state credit union charter there shall be filed with the
commissioner of banking a copy of the charter thus issued. Upon
such filing, the credit union shall cease to be a West Virginia
state-chartered credit union;
(4) The successor federal credit union or out-of-state
chartered credit union shall be vested with all the assets and
shall continue to be responsible for all of the obligations of the
West Virginia state credit union to the same extent as though the
conversion had not taken place.
(b) A credit union organized under the laws of the United
States or of any other state may convert to a credit union
incorporated under the laws of this state. To effect such a
conversion, a credit union must comply with all the requirements of
the jurisdiction under which it was originally organized and the
requirements of the laws and rules of this state and file proof of
such compliance with the commissioner. The commissioner shall
generally treat the conversion to a West Virginia state-chartered
credit union as a formation of a new credit union pursuant to
article two of this chapter and the procedures and requirements therein shall be followed to the extent applicable.
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(NOTE: The purpose of this bill is to eliminate the need for
a formal hearing before the commissioner of banking in cases where
a state-chartered credit union decides to convert to a federal
credit union or a credit union chartered in another.
Strike-throughs indicate language that would be removed from
the present law, and underscoring indicates new language that would
be added.)