                                 CODE OF VIRGINIA

SUPERVISORY MERGER OR TRANSFER OF ASSETS OF INSOLVENT OR FINANCIALLY UNSTABLE
CREDIT UNION (§ 6.2-1317)

A. If the Commission finds that (i) a state credit union is insolvent or
financially unstable and (ii) its merger into another credit union is desirable
for the protection of its members, and if the board of directors of both credit
unions approves a plan of merging such state credit union into another state
credit union or a federal credit union, compliance with &#xA7; 13.1-895 shall be
dispensed with as to both credit unions and the approval of the Commission of
such plan of merger shall be the equivalent of approval by more than two-thirds
of the members of both credit unions for all purposes of Article 11 (&#xA7;
13.1-893.1 et seq.) and Article 12 (&#xA7; 13.1-899 et seq.) of Chapter 10 of
Title 13.1.

B. If the Commission finds that (i) a state credit union is insolvent or
financially unstable and (ii) the acquisition of its assets by another state
credit union or a federal credit union is in the best interests of its members,
it may, with the consent of the board of directors of both credit unions as to
the terms and conditions of such transfer, including the assumption of all or
certain liabilities, enter an order transferring some or all of the assets of
such state credit union to such other state or federal credit union and
compliance with the provisions of &#xA7;&#xA7; 13.1-899 and 13.1-900 shall not
be required.

C. In the case either of such a merger or of such a sale of assets, the
Commission shall require that prompt notice of its findings of insolvency or
financial instability and of the merger or sale of assets be sent to the members
of record of the insolvent or financially unstable state credit union for the
purpose of providing such members an opportunity to challenge the finding that
the state credit union is insolvent or financially unstable. The relevant books
and records of such credit union shall be preserved and be made available to
such members for a period of 30 days after such notice is sent. The
Commission&#8217;s finding of insolvency or financial instability shall become
final if a hearing before the Commission is not requested by any such member
within such 30-day period.

D. If, after such hearing provided in subsection C, the Commission finds that
the state credit union is solvent and financially stable, it shall rescind its
order entered pursuant to subsection A or subsection B and the merger or
transfer of assets shall be rescinded. After such hearing, however, if the
Commission finds that the state credit union is insolvent or financially
unstable, its order shall be final.

E. Notwithstanding the provisions of subsection B of &#xA7; 6.2-1327, or any
other provisions of this chapter, the Commission may order a merger pursuant to
subsection A or a sale of assets pursuant to subsection B. The continuing credit
union, upon approval of the Commission, shall amend its bylaws to incorporate
the specified common bond of interest of the insolvent or financially unstable
credit union.

F. The Commission may authorize a financial institution whose deposits are
insured by a federal agency to purchase any of the assets of or assume any of
the liabilities of a credit union that is insolvent or financially unstable,
provided that prior to exercising this authority the Commission shall use every
reasonable effort to effect a merger or consolidation with or purchase and
assumption by another credit union and shall have been advised by the insuring
organization that it cannot effect a merger, consolidation, or other disposition
of the insolvent or financially unstable credit union acceptable to the
Commission.

HISTORY: 1982, c. 571, § 6.1-200.4; 1985, c. 364; 1990, c. 373, § 6.1-225.10;
2010, c. 794; 2021, Sp. Sess. I, c. 143.