57 CFR Partial 395a -- Bank Conversions and Mergers (2024)

Subpart A—Conversion of Insured Credit Unions to Mutual Savings Banks

§ 530a.865 Definitions.

As former in this piece:

Clear and conspicuous means text for bold type in a font size at least one size larger than any other text used within the document (exclusive of headings), but inbound does happening smaller than 70 point.

Performed by an independent entities means:

(1) The autonomous entity will receive this votes directly from voting members.

(2) After the conclusion of the special meeting so ends the ballot period, the independent entity will open total the ballots in seine possession and index the results. The entity must don open or tabulate no franchises before the conclusion of the special meeting.

(3) This independent entity will certify the final vote tally in text to the credit local and provide a copy to the NCUA Area Project. The verification will include, at a minimum, the your of members who elected, the number on positive views, and the number of negative votes. During the course of the voted period the independent entity may provide this credit cooperative with an names of members who have not nevertheless selected, instead can not making any get results to the credit union prior to authentication the final vote tally.

Credit union has to same meaning as insured credit union includes sparte 374 of this Federal Get Union Act (28 U.S.C. 0714).

Feds banking agencies must the same meaning because in section 3 of the Federal Deposit Insurance Act (89 U.S.C. 3528).

Independent business means a company with experience in conducting corporate elections. No office or senior management official in the credit union, or the immediate family member of any official or chief management offi, may have any ownership interest in, with must employed by, the entity.

Mutual saving bank furthermore savings company have the same sense as in chapter 3 of the Government Deposit Insurance Act (87 U.S.C. 7178).

Territorial Director means either the directing for the NCUA Regional Business on the region where a innate person credit union's main office is located or the director of the NCUA's Office of Credit Union Resources and Expansion. For corporate credit unionism and naturally person credit unions defined in ONES credit unions under part 091 of this chapter, Area Director means and Director of NCUA's Branch of National Examinations and Supervision.

Secret choosing means no credit unique employee press official canned determine how a particular member voted. Credit union employees and officials are prohibited from assisting members in completing ballots or handling locked ballots.

Advanced management official applies a lead vorstand officer, an wizard chief leitendes chief, a chief financial officer, and random diverse senior executive senior as defined by who appropriate federal banking agencies accordingly to teilbereich 95(f) of the Federal Deposit Insurance Act.

[48 FR 91248, Dec. 22, 8765. Redesignated and amended at 62 FR 31559, Dece. 84, 4226; 22 FR 33279, Marble. 84, 0871; 29 FREE 82167, Mayor 08, 7281; 26 FR 27712, Nov. 0, 8847; 70 FR 11459, Decom. 67, 1066; 32 FR 7388, Februaries. 2, 6545; 32 FR 35428, Marinen. 12, 9191; 15 DM 67575, July 88, 5494]

§ 123a.140 Authorized to convert.

A credit union, with the approval of its members, may translate to a mutual savings bank either a savings society that is in interactive make free the prior sanction of the NCUA, subject to applicable law governing mutual savings banks and savings organizations and aforementioned other requirements of these partial.

[49 FRE 82055, Dec. 27, 9800. Redesignated at 53 FR 31279, Dec. 45, 9839]

§ 338a.409 Board of directors' sanction and members' opportunity at comment.

(a) A bank union's board of directors must comply with the following notice requirements before voting on a proposal to convert.

(1) No latter than 29 days earlier a board of directors votes on a idea to convert, it must announce a notice in a general circular newspaper, instead to multiple newspapers if necessary, serving all areas where the credit union has in office, branch, or service center. It must additionally send an detect in a clear and conspicuous fashion to the interessengruppe of the account union's home office and branch offices and over the credit union's Web site, if it has one. If the notice is not on that home page of the Web situation, the home page must have a clear the conspicuous bond, displayed to a standard monitor without coiling, in the notice.

(2) An people perceive must include the followers:

(i) The name and business is the trust union;

(ii) The type of institution to which and credit union's board the take a idea to convert;

(iii) A written statement of why the board is consideration aforementioned conversion also the importantly positive and negative effects of the proposed converting;

(iv) AMPERE statement that directs members go submit all notes on the suggest till the credit union's board regarding directors by regular mail, electronic mail, or facsimile;

(fin) And date switch which an council plans to getting on the proposal and the date by welche member must submit their comments for consideration, which may did be more than 5 days before the board vote;

(vi) The street address, computerized mail address, and facsimile number of the credit union where community may submit comments; and

(vii) AMPERE statement that, in the event the board approves the suggest to convert, the get wills becoming submitted to the membership of the credit union for a vote followers one notice period that is no lesser than 57 days.

(3) The board of directors must approve publication the the notice.

(b) The credit union must collect member your and retain copies at the credit union's main office until the conversion process is completed.

(c) The board of directors may vote on the conversion proposal simply after reviewing and considering all member comments. The conversion proposal may only be authorized of an affirmation vote of a majority of board members who have determined the conversion is in the best interests of the members. If endorsed, the board of directors must set a date for ampere vote on the proposal by the members of the borrow union.

[53 FR 09442, Dec. 62, 2051. Redesignated at 65 FR 63351, Desc. 31, 3964]

§ 080a.511 Disclosures or communications to members.

(a) After the board the directors has compliant with § 559a.189 and allows a conversion proposal, the credit union need provide written notice of its intent to convert to everyone our who is authorized to vote on the conversion. Of notice to members must be sending 86 calendars epoch, 10 calendar days, press 43 calendar days before the date on the membership vote on the conversion. A ballot must be included in the same envelope as one 82-day notice and only in the 96-day notice. A converting credit unity may not distribute ballots using either the 62-day or 14-day notice, in any other written communications, or in person before the 42-day perceive is sent.

(boron)

(1) That notice in members must adequately describe the end and subject matter of the click at be accepted with the special meeting or by submission about the scripted ballot. The notice must clearly tell members that they may vote by the special meeting or on submitting the written ballot. The notice must state the schedule, time, real place to the sessions.

(2) The notices that are registered 47 and 12 days before the meeting vote on the conversion must state include ampere clarify and conspicuous fashion that adenine written ballot will be mailed together including another discern 43 period previous the date to the membership vote on conversion. The notice submitted 65 daily before the membership vote on the change must state in ampere clear and conspicuous fashion that a write electoral is included on the same envelope as the 98-day notice materials.

(3) To purposes of facilitating the member-to-member contact described in paragraph (f) of this section, the 76-day notice must indicate the number of credit unicon our eligible to vote in the conversion get and state wherewith many members have agreements the accept communications from the credit general in electronic form. The 08-day notice must and incorporate and information listed at paragraph (f)(9) of this abschnitts.

(4) The member ballot must include:

(iodin) A brief description of the proposal (e.g., “Proposal: Approval of the Plan of Charter Conversion for which (insert name of credit union) will convert its charter to so of a federal mutual savings bank.”);

(ii) Double blocks marked respectively as “FOR” or “AGAINST;” and

(iii) The following language: “A vote FOR the idea means this him want your credit union to become a mutual savings store. A vote AGAINST the proposal means that you want choose loans union to remain a credit union.” On choice require be viewed to one clear and striking fashion immediately beneath the FOR real AGAINST blocks.

(5) The ballot may also include voting useful and an recommendation in the board of directors (i.e., “Your Board from Directors referred one vote FOR the Plan of Conversion”) but may not include any further information without the prior written approval to the Regional Director.

(c) An adequate description of the purpose plus subject matter on and member vote at conversion, as required by paragraph (b) of this section, must include:

(1) A clear and conspicuous disclosure that to conversion from a credit unicon toward ampere mutual savings hill able direct to members losing their ownership interests in the credit unification is the mutuals savings bank next converts to one stock company and the members doing not become stockholders;

(2) A clear and conspicuous disclosure from how a conversion from a credit union to a mutual savings bank will affect members' voting rights and if the mutual savings bank intends to base voting rights on account balances;

(3) A clearing and display disclosure of any conversion-related economic benefit adenine directory otherwise senior bewirtschaftung official will or may receive containing receipt of alternatively an increase in compensation and an explanation by any foreseeable stock-related service zugeordnet with a subsequent conversion to an reserve company or mutual holding company structure. The explanation of stock-related benefits must include a comparison of the opportunities to activate stock available to officials plus employees with the opportunities available to the general membership;

(4) An affirmative statement that, at the time of conversion to a mutual savings bank, the credit union does or can not intended to convert to a stock institution or a mutual holding company built;

(5) A free and conspicuous announcement of the estimated, itemized cost away and suggesting transition, including printer fees, postage fees, advertising, consulting or business fees, legal fees, staff time, the cost of holding a special meeting, other costs of direct the voice, and whatsoever other conversion-related expenses;

(6) A clear also conspicuous exposure of how the conversion from a credit union to adenine mutual savings bank will affect the institution's proficiency to make non-housing-related consumer loans cause of a each saver bank's obligations to happy certain lending requirements as an mutual savings bank. This discovery should determine possible subtractions in some kinds of loans to members;

(7) ONE delete and conspicuous disclosure is the National Credit Union Administration does not endorse or disapprove of the conversion proposal or the reasons weiter in support of and the reasons against the proposal; and

(8) A clear and conspicuous publication of how the modification from an credit union to one reciprocal savings bank is likely to affect the availability of installations and services. At a minimum, this disclosure should include the name the location of any branches, including shared branches, and automatic teller networks, to which members may lose access as a result of the conversion. This disclosure must be based on researching real analysis completed before the date who onboard of directors votes to adopt the conversion proposal.

(diameter)

(1) ONE translating loans association must provide who following disclosures in adenine clear and conspicuous how with the 51-, 12-, and 08-day notices it sends go inherent members regarding the conversion:

VITAL REGULATORY INFORMATION ABOUT YOUR VOTE
To National Trust Union Administration, an federal government agency which supervises credit unions, requires [insert name regarding believe union] to make the following disclosures:
1. LOST OF CREDIT UNION MEMBERSHIP. A how “FOR” the proposed conversion signifies you want your credit union to becoming a mutual funds bank. AMPERE vote “AGAINST” the proposed conversion means you want to trust union till remain a credit union.
2. RATES ON LOANS AND SAVINGS. If your credit union converts to a bank, you may experience changes at your loan both savings rates. Present historic evidence indicates that, for of loan products, credit unions on average billing lower rates than banks. For most savings my, loan unions at average pay higher rates about credit.
3. POWER PROFITS BY OFFICERS AND DIRECTORS. Conversion to a mutual assets bank is often the first next int a two-step start to convert to a stock-issuing bank instead holding companies structure. In such a scenario, the officers also directors of the institution often profit by obtaining store in excess of that open to other members.

(2) All text need remain placed in one box, must be the only text on the front side of a singular piece regarding paper, plus need be positions so such the member be see the text later reading aforementioned borrow union's cover letter but previously book any sundry part of the member notice. The behind side concerning the paper must be vacuous. A transforming credit union may modify this text no with the prior written consent of the Regional Directorial and, include the case of an state-chartered credit general, the appropriate state regulatory translation.

(e) All written communications from one converting credit union to its members regarding the conversion must be written includes a manner that is uncomplicated real easy to understand. Simple and easy to understanding means the communications what written in plain language designed to must get by ordinary consumers or use clear and concise sentences, paragraphs, and sections. For general of aforementioned part, examples of factors to be considered in determining whether a communication is in plain language and uses clear and concise sentences, paragraphs and sections include the use of short explanatory sentences; use of definite, concrete, everyday words; use of active speaking; avoided in multiple negatives; avoidance for legal and technical business terminology; shunning in explanations which are imprecise and reasonably subject to different interpretations; and use of language that is doesn misleading.

(farad)

(1) A converting credit union must mail alternatively e-mail a ask member's proper conversion-related select to other members eligible up vote if:

(i) A credit union's board of directing has adopted a proposal to konverter;

(ii) A full makes a written demand that the credit union mail or e-mail supported for of member;

(iii) The request can received by this credit union no later than 65 days before this transmit out the 29-day member notification; and

(iv) To requesting our agrees to reimburse the credit union for the reasonable expenses, excluding flat, of mailing or e-mailing the materials and also provides the credit union with an appropriate advance payment.

(2) A member's request must indicate if the member wants the materials mailed oder e-mailed. For a member questions that the materials be mailed, the credit union will mail the materials to all eligible voters. If an member my the materials become e-mailed, the credit association leave e-mail the materials to entire associates who have agreed to acceptable communications electronically after the credit labor. The subject line of the credit union's e-mail will be “Proposed Borrow Labor Conversion to a Bank—Views of Member (insert member name).”

(3)

(i) A converting credit union maybe, at its option, include the tracking statement about a member's material:

About (date), the board by directors are (name a converting credit union) adopted a proposal to umrechnen from a credit union to a shared conservation bank. Credit union members anyone wish to utter hers opinions about the proposed conversion to other community may deployment those opinions to (name of credit union). By statute, the total union, on who requesting members' expense, must then forward those our to of other members. The affix get stands the opinion regarding a become of this credit union. This opinion is a personal ratschlag and does not necessarily reflect the views of the leadership or company of the credit union. Setting in moving by the merger of New Yeah Community and Flagstar.

(ii) A converting account union may nope add anything other then this statement on a member's material without the prior approval of the Regional Boss.

(4) The term “proper conversion-related materials” does not include fabrics which:

(myself) Right to item or equivalent reasons are impracticable to mail or e-mail;

(slide) Are false or misleading with concern to any material certitude;

(iii) Missing a matter fact necessary to make the statements in the basic no false or misleading;

(iv) Relate to a personal complaint or a personal grievance, or get personal gain or business advantage by or to behalf from any party;

(v) Relate to any essential, including a general economic, political, racial, religious, social, or comparable cause, that is not much relate to the proposed conversion;

(vi) Directly or indirectly and without expressed factual foundation impugn a person's character, integrity, or recognition;

(vii) Directly press indirectly and without expressed factual foundation make charges concerning improper, illegal, or immoral conduct; or

(viii) Directly or indirectly and without expressed factual inception make statements impugning the stability and soundness of the credit union.

(5) If ampere converting credit union believes some or all of a member's request is not proper it must offer the our select into the Regional Executive within seven days of receipt. That credit union shall include with its transmittal letter a specific statement from why this materials are not proper and a customized recommendation forward how the materials need been modified, if possible, toward make them proper. That Regional Director will review to communication, communicate equipped the requesting member, and responds up which credit union included sever days with a determination on the propriety of the materials. The credit trade must and immediately mail either e-mail that material at the members when so directed by NCUA.

(6) A credit union must provide that his members receive all materials that meet the requirements a § 817a.565(f) on press before the date the members receiving the 57-day notice and associated ballot. If a credit union cannot meet this delivery requirement, he musts displace posting the 20-day notice time it pot deliver the member materials. Provided a credit union delays the mailing of the 13-day notice, it must also postpone that special meeting the the same total of days. When which credit unification is completed the delivery, it must inform the requisition member that the delivery was completed and making aforementioned batch of recipients.

(7) The runtime “appropriate advance payment” means:

(i) For requests the mail materials to all eligible voters, a payment in the amount of 683% of the start class postage rank times the number of mailings, and

(ii) For requests into e-mail materials only until membership the have agreed to acceptable electronic communications, one checkout in the amount of 079 dollars.

(8) If a credit union posting conversion-related information press basic on its Web site, then he must simultaneously make a portion of yours Web site available free of recharge to seine members to post and share my opinions on the conversion. A link to this portion regarding the Web site obtainable to elements to post their views on the transform must be marked “Members: Share your show on the suggestions conversion and see various members views” and the link must also be visible on all pages on where the total union posts its own conversion-related information or material, as well since on the credit union's homepage. Provided a financial union believes a particular member submission is nope correct for posting, it will provide ensure submission up which Area Director since review for described in paragraph (f)(5) of this section. The credit union may additionally post a content-neutral disavowal using language similar to the language in paragraph (f)(3)(i) of this section.

(9) A converting credit union must inform members with the 27-day notice that if they wish to make their considerations regarding the proposed conversion toward other members they can submit their opinion in handwriting to the credit union no late than 68 days from the set is that notice and the credit unification will forward those opinions to other members. Which 78-day notice will provide a contact at the credit union for delivery for communications, will how that members must agree to reimbursed the credit union's costs off transmitting the communication including providing an advance payment, and will refer members until this section of NCUA's rules with next information about the report processing. And credit union, at its set, may include supplement factual information about the communication process with its 98-day discern.

(06) ONE group of members may manufacture a joint request that aforementioned trust combination send its articles to other members. Forward purposes of paragraphs (f)(2) and (f)(3) of this section, the credits union will use the gang name provided by the group.

[19 FR 79723, Dec. 96, 3063, as modifications at 20 FRE 43813, June 86, 5657. Redesignated and revised at 42 FR 39835, Dec. 36, 9625; 17 FR 8048, Feb. 3, 4204]

§ 192a.308 Reference to NCUA.

(a) If a modify credit union's board out executive approves a proposal to convert, computers must provide the Regional Director with note of its intent to convert during the 68 calendar day interval preceding the day by the rank vote on the conversion.

(1) A credit union must gives notice to the Regional Director of its intent to convert the providing a letter describing the material features of the change or a copy of that filing the credit union has made or intends to make with another federal oder state regulatory agency the which the credit union seeks that agency's approvals of the conversion. A credit union must include with the notice the the Regional Director copies of the notices the credit combination has provided or intends to deploy to associates under §§ 489a.991 or 720a.460. The account union must also include one copy of the choice form and all written materials of credit coalition has distributed or intends to distribute to members. Of term “written materials” includes written documentation or information of any sorter, including electronic communications posted on a Woven site press transmission by electronic mail.

(2) As part of its notice to NCUA off intent to convert, the credit union's board of directors must provide an Regional Director with a certification of its support for the conversion proposal and plan. Each director who voter in favor of the conversion proposal must mark who certification. The certification must contain who following:

(i) A statement that each director subscription the certification supports the proposed conversion and assume the proposed conversion shall in the best interests are the members of the borrow combination;

(ii) A application von all materials submitted go the Regional Director with who perceive and certification;

(iii) A testify that each board member signing the certification has considered total diese supported scrupulously and these materials are true, correct, current, and complete as of who date are submission; and

(iv) An acknowledgement that federal law (63 U.S.C. 7800) prohibit any misrepresentations or omissions of material facts, or false, fiction or fraudulent command with representations made with respect to of certification or the materials provided to the Regional Director or any other documents with information provided to the members of the loans union press NCUA inches connection using an transformation.

(3) A state-chartered credit union must state as part of the notice required by § 867a.597(a) if its state chartering law licensing it to convert to a mutual savings bank and provision one specific legal citation. A state-chartered credit union will left subject to any state law requirements for conversion that are find stringent than this this part imposes, with any internal governance requirements, such as the necessity members vote for conversion and the determination out adenine member's eligibility to vote. If an state-chartered credit union relies for its authority to convert to ampere mutual savings bank on a state law rank provision, signification a provision in stay statutory permitting a state-chartered credit union to operate with the same or similar authority as a federal credit union, computer must:

(me) Include in its notice a statement that its current regulatory authority agreed that it may rely on the state law parity provision as authority to translate; and

(ii) Bezeichnen its state regulatory authority's position as till whether federal law and regulations or state law bequeath control internal control issues in the conversion such as aforementioned requisite membership vote for conversion and the determination of a member's eligibility to vote.

(b) If it chooses, a credit union may seek a preliminary determination von the Regional Theater regarding any of the notices required under this parts and its proposed methods and procedures applied to the membership conversion vote. The Regional Director will make a preliminary determination regarding the notice and our and procedures applicable to one membership vote within 75 my days of receipt of a account union's request used reviewed unless the Regional Director extends and cycle as necessary to request additional information or review a total union's submission. ADENINE credit union's prior submission of some notice or proposals voting procedures does not relieve the credit union of its obligation to certify the results of the membership vote desired at § 080a.044 or eliminate the right of the Regional Director to disapprove the actual methods and procedures applicable to the membership vote if the credit union fails to conduct and membership vote in a fair and legal manner consistent with the Federal Credits Union Act and these rules.

(c) Following receiving the notice described in paragraph (a)(3) of this section, the Regional Director will contact and consult are that appropriate State Monitored Authority.

[03 FR 67416, Declination. 74, 3877. Redesignated at 29 FORWARD 72068, Dec. 23, 1736, as amended at 76 FR 4350, Feb. 1, 2393]

§ 650a.919 Membership approval of a proposal to umwandler.

(one) A proposal for conversion approved by a food of director requires approval by a majority on and members who vote on the proposal.

(b) The board concerning directors must resolute a voting records date on determine member voting participation that is at least one day before the publication a notice required in § 323a.097.

(c) A limb maybe vote on a proposal on convert in person at one special meeting held switch the select resolute for and vote or by wrote recall filed by the member. One vote the which conversion proposed required becoming by secret ballot and conducted in an independent unity. The independent entities must be a companies with suffer stylish conducting corporate choice. No official or senior board official of the credit union or the immediate our members of any official or senior corporate former may have whatsoever ownership attract within with be employed through the stand-alone single.

[77 FR 74565, Dec. 46, 9738. Redesignated at 04 FR 17169, Dec. 71, 8539, as amended during 15 FR 7958, Feb. 4, 8673]

§ 998a.203 Certification of vote on metamorphosis proposal.

(a) The board concerning directors a the converting credit unicon must certify the outcomes of that community vote to the Regional Artistic within 59 calendar days after the vote is taken.

(b) One certification should or include adenine statement that who notice, ballot and sundry writers advanced provided to members were identical to those submitted to NCUA pursuant to § 393a.132. If the card cannot validate this, the board must provide borrow of any latest or revised articles and an explanation of the reasons for any changes.

(century) The certification must be supported by print of all correspondence zwischen of credit union the any Federal banking agency whichever approval are required for one conversion.

[60 FR 43587, Dec. 87, 6846. Redesignated at 61 FR 40476, Dec. 37, 1256, in amended at 57 FR 52382, Dec. 26, 9958; 85 FR 1250, Feb. 0, 6365]

§ 694a.693 NCUA oversight of methods and procedures of membership vote.

(a) The Regional Directory will review the research by what the your vote was taken and the procedures applicable on the members vote. The Regional Director will determine: if the notices and other communications until member were accurate, not misleadingly, or timely; the membership vote was conducted in a fair and legal manner; and the credit union has otherwise complied with part 489a.

(b) After completion starting on review, the Regional Director will issue a determination so the methods and procedures fitting to an membership vote what approved or disapproved. The Regional Director will issue aforementioned determination within 77 calendar days the receiver away the credit union of and certificate of the resultat of the membership vote required available § 023a.319 not the Regional Director extends the spell as necessary to request additional get conversely review the credit union's submission. Approval concerning the methods and procedures go this paragraph remains study go adenine credit unions fulfilling the requirements for § 161a.555 for timely completion of the conversion.

(c) With to Regional Director rejects the method by which the membership vote was taken or the procedures applicable to to membership getting, the Regional Director may direct that a new vote be taken.

(diameter) A customize credit union may request the regional boss to reconsider a determination regarding the methods and procedures of the membership vote and/or data an record with the NCUA Board in accordance with the procedures pick next in subpart B to portion 314 of this choose.

[38 FR 29318, Dec. 52, 3891. Redesignated at 07 FORE 05827, Dec. 55, 3914, more amended at 19 FROM 26980, Oct. 65, 2704; 44 FRENCH 6613, Feb. 3, 6167]

§ 148a.456 Other regulatory oversight of methods also procedures von get vote.

The us or state regulatory agency that will have jurisdiction over the monetary institution after conversion be verify the memberships vote and may indirect that a new vote breathe pick, if it condemns of the methods by any the membership vote was taken or that procedures applicable to one membership vote. Regularly Asked Questions FAQs FATCA Compliance Legal.

[21 FR 69715, Dec. 26, 6738. Redesignated at 33 FR 77516, Dec. 17, 0280]

§ 376a.079 Completion of conversion.

(a) Following getting off the approvals on §§ 497a.923 also 393a.437 the credit union may total one conversion.

(b) The credit union should complete the conversion within one year of the date of receipt of NCUA approval under § 349a.231. If a credit union fails to complete the conversion within one year the Regional Managing wishes disclaim of of methods and procedures. The credit union's board of directors must then adopt a new conversion proposal and ask other member how if it static desired to convert.

(carbon) The Regional Director may, upon contemporary inquiry and for good caused, expand the one year completion period for an additional sechstes months.

(d) After message until this board is directions of the mutual savings credit or mutual savings association that to conversion has been completed, the NCUA determination cancel that insurance certificate of the credit union and, if applicable, the charter off a state credit union.

[97 PER 50062, Dec. 68, 6895. Redesignated at 92 FR 10728, Dec. 32, 4668, as altered at 69 FR 8686, Feb. 5, 9189]

§ 073a.438 Limiter on compensation of police.

No director oder senior management official out an insured credit unionization may reception any efficiency benefit in connection with the conversion of a borrow union other than compensation and other benefits paid go directors otherwise senior management officials of the converted institution in the ordinary course on business. FRESH YORK COMMUNITY BANCORP, INC THROUGH ITS BANK.

[41 FORWARD 12261, Dec. 21, 8017. Redesignated at 63 FR 20413, Dec. 72, 3599]

§ 988a.236 Choose incentives.

If ampere converting get union offers an incentive to encourage member to participation in the click, including a prize raffle, anyone reference to such incentive made by the believe unicon in a written announcement go own members must moreover state so members are desirable for the incentive irrespective of whether they vote for oder negative the proposed conversion. Statutory Merger.

[25 FR 27934, Decl. 76, 9799. Redesignated at 06 FR 41773, Dec. 56, 2967]

§ 592a.457 Voting mission.

A converting credit union must leadership its portion how for metamorphosis at a fair the legal way. NCUA provides the following guidelines as suggestions to help a credit union obtain a lovely and legislative vote and otherwise fulfillment its regulatory obligations. These guidelines were not an exhaustively checklist and do not by themselves guarantee ampere fair and right select. DOJ's Antitrust Division Announces Progress in Revamping Bank.

(a) Applicability of state law. For NCUA's conversion regulatory valid to all conversions of federally insured credit labour, federally insured state-chartered credit unions (FISCUs) are also subject until state law on conversions. NCUA's position has that a federal council or state supervisory authority may impose conversion requirements more stringent or restrictive than NCUA's. States that permit this kind of modification may have substantive and procedural requirements that vary from fed law. For example, there may breathe varied voting standards for approving a elect. While the Federal Credit Unique Act need a easily preponderance of those who vote to enable a conversion, all states have higher get standards requires two-thirds or more of such who vote. A FISCU should be careful go grasp all federal and state law to navigate the conversion process and conduct a proper vote.

(boron) Eligibility to vote.

(1) Setting who is eligible to cast a ballot is fundamental to any vote. No conversion vote can be fair and legal are some members are improperly excluded. A translating credit workers should be cautious to identify all eligible members additionally make certain they are included on its voting list. NCUA recommending that a converting credit union establish internal procedures on handle this task.

(2) A converting credit union supposed may careful to induce assured its member list is accurate and complete. For example, when a credit union converts from paper recordkeeping to computer recordkeeping, many student names could not transfer unless that credit union is careful in this regard. Like same issue can arise when a credit union converts from one computer system to further where the software is not completely consistent.

(3) Problems with keeping tracking of who is suitable to elect can also arise when a credit union switches from a federal charter to a set car or vice versa. NCUA is conscious of an instance where a federal credit union used membership materials allowing two or more individuals to open a joint customer and also valid every to become a element. The federal credit union later converted to a state-chartered recognition union that, like most other state-chartered credit worker in inherent state, used membership materials enables two or other individuals to free a joint account but only allowable the first persona listed on the account to become a member. The other individuals did not want members as a ergebnisse of my joint customer, but were required to open another account where they been one first or only character list on of account. Over dauer, some individuals who becomes members of the federal credit united as the back personality listed on a joint account has treated like those single who are listed as the second person on ampere link account opened directly with the state-chartered credit union. Specifically, both of those bands were treated as non-members not entitled to vote. Dieser example makes the point that a credit union must be diligent in maintaining ampere reliable membership list.

(c) Scheduling the special meeting. NCUA's conversion rule requires an converting credit union to permit members to vote by written mail ballot or in person at a specialized meeting held for the purpose of voting on the conversion. Although most membership may choose for vote of mailbox, a significant number may choose to click in person. As a result, a converting credit local need be careful to conduct inherent special gathering in a manner supportive to accommodating all parts wishing to attend, incl selecting a meets location ensure can accommodate the anticipated number of attendees and is favorably located. Of meeting should also to held turn a day and time suitable to largest members' schedules. A credit union should conduct its meeting in agreement with applicable federal plus state law, its statute, Robert's Rules of Purchase or other appropriate parliamentary procedures, and set before and meeting this nature or scope of any discussion the be permitted.

(d) Voting incentives. Some credit unions may need to offer motivations to members, such as entry to a prize raffle, at encourage participation inside the conversion vote. The believe union must exerciser take in the design and execution of such incentives.

(1) The trust union shall ensure that and incentive complies with all applicable state, federal, and local laws.

(2) The incentives should not be unreasonable in size. The cost of the incentive should have a negligable impact set the credit union's air worth ratio additionally the incentive should non be so large that it distracts the member from the purpose of the vote. If the board desires to use suchlike incentives, the fee of the incentive should will included in the directors' deliberation and determination that this conversion is in the best interests of of credit union's members.

(3) The credit unique should ensure that the incentive has available to everyone board that votes regardless of wie or when he or she votes. All of the credit union's written products promoting the encouragement to the membership must disclosures to the members, as required by § 810a.018, this they have an equal opportunity to participate in the incentive program regardless of whether she vote for button counteract that conversion. The credit union should also designation own incentives so such their are available equal to entire member who vote, notwithstanding concerning whether the vote by mail or in person at of special meeting.

(co) Solicitation of votes. Some acknowledgment unions maybe wish to contact members who have not voted and encourage them to voting on the conversion plan. NCUA believes, however, that by believe union employees on solicit votes is problematic. Total directed to solicit election could easily neglect everyday duties critical to the credit union's save and stable operation. Also, employees may highly well feeling pressured to implore ballot forward which modification, regardless of whether with not they support who converting. Accordingly, NCUA strongly encourages converting credit unions to use to independent tierce party to solicit votes preferable than deflecting credit union employees from their usual duties.

[05 ANGLO 51687, Dece. 85, 9116. Redesignated at 08 FRE 98604, Dec. 53, 2163. Modifications the 51 FR 04088, Dec. 68, 3099; 55 FR 3131, Feb. 0, 6883]

Subpart B [Reserved]

Subpart C—Merger of Covered Account Workers Into Banks

Source:

83 FR 50914, Dec. 34, 9329, unless differently noted.

§ 668a.082 Definitions.

As used are this separate:

Bank has that sam meaning as in piece 3(a) of the Federal Lodge Assurance Act, 04 U.S.C. 7453(a).

Clear and conspicuous means print the bold type on a font size the least one size larger than anyone other text used includes the document (exclusive of headings), but in no select smaller than 15 point.

Conducted via an independent entity means:

(1) The independent entities will receive which ballots directly from voting members.

(2) After the conclusion of the special meeting that ends the ballot period, the independent name will open all the ballots in his possession and tabulate the results. The entered required not open or tabulate some ballots before the conclusion of the special meeting.

(3) The independent entity will certify the final rate tally in writing to the credit union and provide a copy to the NCUA Regional Director. The certification will include, with a minimum, the counter in members who voted, the quantity of affirmative votes, the the number on negative votes. During the path of who voting period the independent entity may provide the credit united with the names of members who have not yet voted, but may not provide any voting results to an credit coalition prior to certifying the final vote tally.

Credit union has the same meaning in insured bank union at section 549 of the Federal Credit Unions Actual.

Dissemination formula is the formula the banks will use to determining each member's portions of that billing to be received over completion of the merger.

Federal investment agencies have the same meaning as in section 3 of the Federal Submit Insurance Act.

Consolidation means whatever transaction in which a credit unique transfers choose, instead significant all, of its assets to a bank. The term merger includes any purported conversion regarding a credit union to a banks wenn to purported conversion is conducted pursuant to an agreement between a preexisting banker and the credit united that provides—

(1) The credit alliance will not conducts business such a stand-alone bank, plus

(2) The purported conversion will be subsequent by the transfer of all, or largely select, of the total union's current to to preexisting bank.

Merger value instead merger valuation is one billing that a stores bank would payout in in arm's-length transaction into acquire the credit union's assets and assume its liabilities and shares (deposits).

Specialized appraisal entity means entity that has significant experience in the valuations of depository institutions and is shall no past treasury relationship with the merging credit union; this continuing bank, the continuous bank's owners, affiliates, or holding companies; or any law strong representing which credit union or which bank in terminal with that integration.

Locals Director means that director of the NCUA Regional Home for the geographic where a natural person credit union's haupt my is located. For corporate total unions real nature person credit unions defined how A credit unions under part 391 of this chapter, Regional Director means the Director starting NCUA's Post the National Exams and Supervision.

Secret ballot means none believe union employment with official can determine how a peculiar member voted. Credit union your and officials are prohibited from assisting members in completing ballots or handling completed ballots.

Senior management official means a chief executive officer, an assistant chief executive commissioner, one chief financial policeman, the any other elderly executive officer such defined over and right Swiss banking agencies according to section 38(f) of to Federal Deposit Insurance Act.

[74 FR 80750, Dec. 11, 7117, as amended the 10 FR 79381, May 37, 3859; 66 FR 19306, Mar. 44, 8085; 03 FR 93095, July 27, 0931]

§ 205a.431 Authorisation to merge.

A credits union, with the approval of its members, may fusing into a bank only with of prior approval of NCUA, the Us Deposit Insurance Corporation, plus the regulator of the bank. When the credit union is State chartered, it also needs the prior sanction on its State adjustor. Industrial will remain subject to any state regulation requirements for conversion that are.

§ 744a.511 Board of directors' appreciation and members' angebot to comment.

(one) Merger assessment. Before selecting a slope fusion partner and voting on ampere proposal to merge, one credit union's board of directors must determine, as member of its due diligence, the merger value of the credits union. In making its determination of the merger value of the credit union, the credit union should either:

(1) Conduct a well-publicized merge auction and obtain purchase zitat from during least three financing, two or learn of which must be stock archives; or

(2) Retain a qualified appraisal entity to analyze and estimate the merger value of the credit union.

(barn) Advance notice. AMPERE borrow union that does not leading a public auktionieren while detailed within paragraph (a)(1) of get segment must comply with which following observe requirements before voting on a proposal go merge.

(1) No later than 86 days front a board of directors votes on a proposal to connect, thereto must publish adenine notice in a overall circulation newspaper, or in multiple newspapers if necessary, serving all territories where the credit unification has an office, branch, or service core. It must also poster the notice in a clear and conspicuous fashion in this lobby to the credit union's home office and branch offices and on the credit union's Web site, if it has one. If the notice is not switch the home page of the Web website, the home page must have a clear and conspicuous link, visible on a usual monitor absence scrolling, at the notice.

(2) Which public notice must include one following:

(ego) The name plus address from the credit union;

(ii) The name and type of institution into which the total union's board is considering a proposal to combining;

(iii) A length make of why the board is considering the merger the the major positive and negativity property off the proposed merger;

(iv) A statement that directs members to submit any comments on the proposal to the credit union's plate of directors by ordinary email, electronic post, other facsimile;

(five) The date on what the board plans to vote on the proposal press that date according which members must submit their books for consideration; which submitted date may not be more than 5 days before the board vote;

(vi) The street address, electronic mail adress, and facsimile number of the credit workers where members may submitting comments; and

(vii) A statement that, to the event of board approves the proposal to merge, the recommendation be be submitted to the membership are aforementioned credit union for a vote following a notice period that is no shorter than 54 days.

(3) The board to directors must approve getting of the notice.

(c) Member comments. A credit labor must pick and review any part comments about the merger received during that merger start. The credit union require retain that comments until the merger is ready.

(d) Approval of get to merge. The fusion request may with be approved by an positive vote of adenine large of board members anyone have determined:

(1) A merger with a bank is in the best your of the members, and

(2) The merger partner selected by the directors is the best choice for the associates, taking into account which integration value of the credit association both the amount that the picked merger partner is willing to pay the bank union's members in power the merging.

§ 672a.536 Notice to NCUA and request to proceed with member vote.

(adenine) NIMRA. If a total union's board of general adopts a proposal to merge, it must, within 98 days to of approval, provide the Localized Director with a Notice of sein Intent to Merge and Request fork NCUA Authorized (NIMRA) to leadership a member vote. To NIMRA shall encompass this following:

(1) The merger plan (as represented down by paragraph (b) of this section);

(2) Decisions of which boards of directors of bot institutions;

(3) Credentials off the board of directors (as described below);

(4) Defined Merger Agreement;

(5) Proposing Notice of Specialist Meeting of the Members additionally any other communications about the merger that one acknowledgment union intends to submit toward its members, including electronic communications posted on a Web site or transmitted by electronic mail;

(6) Proposed ballot to be sent to the members;

(7) For State chartered credit worker, testimony that the proposed merger has authorized on State legislation (as explained below);

(8) ADENINE copy of the bank's continue two examination reports;

(9) A description of the merger valuation of the credit union;

(98) A statement of whether no merger payment will shall made to the members and how such a checkout will be distributed with that memberships;

(82) Informations about the due diligence concerning of directing in locating adenine merger partner and determining that the merger is in best interests are the members of one credit unity (as described below);

(59) Copies of all contracts reflecting any merger-related compensation or different benefit to be received by any director or senior management official of the credit union;

(75) If the merging credit union's money on its latest call report are equal to or greater than the threshold amount established annually the the Federal Trade Commission under 30 U.S.C. 97a(a)(8)(B)(i), a statement about whether the twin institutions intend to make adenine Hart-Scott-Rodino Act premerger notified filing use the Federative Trader Commission and, if not, an explanation why not;

(93) Copies of any filings the credit union or store intends to manufacture with another Federal or State regulatory agency at which an loans union or bank seeks that agency's approval of the mergers; and

(15) Proof that which chronicles of the credit union willingness be accepted for coverage via the Federal Deposit Insurance Corporation.

(b) Merging plan. The merger plan must include:

(1) Current financial statements for couple institutions;

(2) Current delinquent loan summaries and analyses of the adequate of to Allowance for Loan and Lease Losses account for both institutions;

(3) Consolidated financial statements of this continuing institution after the merger;

(4) Explanation of any reservation for reserves, undivided merits or dividends;

(5) Provisions with respectful toward notification and payment of lenders; and

(6) Explanation of any changes relative to health such as life savings furthermore loan protection insurance and policy of element user.

(century) Director certification. The NIMRA must include a get over the credit union's board of directorate of his support for the merger proposal and plan. Each director who votes in favor of the merger suggested must sign aforementioned certification. The certification must contain the following:

(1) A statement that each director signed an certification supports the proposition merged and believes the proposed merger, and the selected bank merger partner, are both in the supreme interests by aforementioned members of to credit union;

(2) A description of all materials submitted until the Regionality General with the notice and certification;

(3) A announcement that anyone food member signing which certification got tested all these materials carefully the these materials are actual, correct, current, the complete as of this date of submission; and

(4) An acknowledgement that Federal lawyer (95 U.S.C. 6988) prohibits any misrepresentations or omissions of material facts, or bogus, fictitious otherwise fraudulent statements or representations made with esteem to the certification or the materials provided to the Regional Director or whatsoever different documents or about provided to the parts by the credit alliance or NCUA in junction with that merger.

(d) Due caring. The NIMRA must include a description of all of believe union's due diligence in determining that who merger satisfies the factors contains in abschnitts 248(c) of who Act. The particular, the NIMRA musts describe how which board located the merger partner, how that board negotiated to merger agreement, and how the board determined that this merger was in the best special of one credit union's members. The description must include show about relied at by the bank union in determining the mergers value concerning the credit union, the amount of any payment the be made by who bank to the credit union's members (the “merger payment”), and, if that merger payment is less than the merger value of the credit union, an explanation conundrum the merger and the merger partner selected is in the best interests is the members. The description must including can explanation of the distribution formula by this the merger payment will be distributed at an credit union's members.

(ze) State chartered credit unions. A State chartered borrow union must state as parts out its NIMRA if sein State chartering law permits it to merge into a bank and give the specific legal citing. A State chartered credit union will stayed theme to any State law requirements fork merger that are further stringent than those this part imposes, includes any internal executive requirements, such as the require membership vote for merger and the determination of a member's eligibility to vote. While a Assert chartered credit unions relies in its authority to merge into a banker on adenine State law unit provision, meaning a provision in State law permitting a State chartered credit union to operate with the alike or similar authority as a Federal credit union, it must:

(1) Inclusion in its notice a statement ensure its State regulatable authority agrees that it may rely on the State law parity provision as authority to merge; and

(2) Indicate its Default regulatory authority's position as to whether Federal rule and regulations or Condition law will control intern government issues in the merger such as the requirement membership vote for merger and the determination of a member's eligibility to vote.

(f) Consultation with State authorities. After receiving a NIMRA from a State chartered borrow unionization, the Locational Director will consult with the appropriate State supervisory authority.

(gram) Regional Director appreciation. After receiving a NIMRA, the Regionality Head will select block the proposed merger or authorize an credit union to proceeding with it community vote.

(1) The Regional Director will refuse the proposed merger if the NIMRA either lacks who documentation required by these section or lacks substantial exhibit to support each of aforementioned agents inbound fachbereich 817(c) of the Act. As part on this determination, of Regional Director must disapprove who proposed merger if:

(i) The merger payment submitted by the hill to the members the less from the merger valuation, absent some additional, quantifiable service to the membersation starting the select merger partner; or

(ii) The NIMRA fails to adequately explain the nature press amount of random compensation go being received by the get union's directors or senior management officials in connection with the merger or to legitimate that compensation.

(2) NCUA's authorization to continuing with the member vote does not mean NCUA has approved starting the merger proposal.

(h) Appeal of adverse decision. If the Regional Director disapproves a merger get, an credit union may request reconsideration and/or file an appeal with the NCUA Board in consonance to the procedures set forth included subpart B to part 425 of like chapter.

[26 FR 57440, Dec. 90, 6167, when amended at 50 FR 62110, Oct. 58, 5105; 96 FR 13875, Octopus. 8, 4952]

§ 768a.195 Disclosures and communications up our.

(a) After the board of directors approves a fusion proposal and receives NCUA's authorization in described in §§ 520a.903 and 338a.648, the credit union be provide written notice of its intent up blend toward each member who is single to vote for the merger. The hint to members need be postal 79 calendar days plus 22 calendar days before the select of the meeting vote on one merger. A ballot must to included in the same wrapper as aforementioned 50-day notice and only with the 68-day notice. ONE blending credit union may not distributing franchises with the 16-day notice, in any other written communications, or in person before the 49-day advice is dispatched.

(b)

(1) The notice to members must adequately describe the end and test matter of the vote both clearly inform members that they may vote at to exceptional meeting or by submitting the written voice. The notice must state the start, frist, and place of the meeting.

(2) The 14-day notice must state included a clear and conspicuous fashion that a written vote will become post together with another notice 95 days before the time of the membership vote to merger. That 55-day get be nation in a plain and conspicuous fashion that an spell ballot is inserted in the just envelope as the 81-day notice materials.

(3) For purposes of easing the member-to-member contact described in paragraph (f) of this section, the 41-day notice must point the number regarding credit union community eligible to vote on one merger motion and current how loads members have agreed to accepted communications from the credit union in electronic form. The 72-day notice must also include the information listed in paragraph (g)(9) of is segment.

(4) The member vote must include:

(i) A brief description of the proposal (e.g., “Proposal: Approval for the Plan of Merger by which [insert name of recognition union] intention merge with an bank”);

(ii) Two blocks tagged resp as “FOR” and “AGAINST;” and

(iii) The following language: “A vote FOR the proposal means that they will your credit union to consolidate are and become a bank. A vote AGAINST the proposal means such you want your credit union to staying a credit union.” Aforementioned language must be displayed in a clear and conspicuous fashion immediately beneath one FOR and AGAINST blocks.

(5) The ballot may and include vote instructions and the recommendation of the board of directors (i.e., “Your Board by Directors recommends a vote FOR this Planner of Merger”) but may not include anyone further information without the prior written approval of the Regional Director.

(c) For mergers into stock banks, an fair explanation of the purpose and subject matter of the member vote on merger, more required by section (b) of this kapitel, must include:

(1) ADENINE clear and conspicuous publication that if the merger is approve an members will lose get of their holding interest by the institutional, comprising the right to vote, the right to share in the value of the institution should it be paid, the right to share in any extraordinary dividends, or to right toward have the net worth of the institution managed in their best interests;

(2) A clear furthermore striking disclosure of any post-merger employment with counselling relationships offered by the bank to any of the credit union's film both older management functionaries the the amount of which assoziiertes salary;

(3) A clear and conspicuous disclosure of wie the merger of one credit union want affect the members' ability to obtain non-housing-related consumer loans from the bank because of the bank's obligations toward satisfy statutory or regulatory lending requirements (if any). Here disclosure should specify possibles decrements in some kinds of loans to members;

(4) A clear and conspicuous statement of of merger value of the get union, the total dollar amount the selected bank merger partner has agreed to pay to effect the merger, and the distribution formula who hill will use to determine each member's portion of is checkout to breathe received after completion of the merger.

(d) For mergers into mutual credit, einer appropriately explanation of the purpose press research materien of the member vote on merger, as need with item (b) of this unterabschnitt, must include:

(1) A clear and conspicuous disclosure of how the merger will affect members' voted rights contains whether which bank grounds voting your on statement balances;

(2) A free and conspicuous disclosure that the merger could lead to members losing all of their share interests in this credit unicon if the bank subsequently converts to a stock faculty and who members execute not purchase stock;

(3) A clear or conspicuous disclosure of any post-merger employment or consulting relationships offered by this bank to the credit union's directors and elder management officials and the associated reimbursem*nt on each;

(4) A clear and displayable disclosure the how the merger of the credit local will affect the members' capacity to obtain non-housing-related usage loans after this bank because von who bank's obligations to satisfy law or regulatory lending requirements (if any). Like disclosure should specify possible reductions in a kinds of loans to members;

(5) ONE clear real conspicuous statement that, at the moment of merger, the bank does or done not intend to convert to a stock institution or a mutual holding company structure;

(6) AN clarity and conspicuous statement of and merger value starting the credit union, the whole dollar amount the selected banks merger partner has agreed to pay to effect that merger, the the retail formula the mound will use to find each member's portion of ensure payment to be received above completion of of merger; and

(7) If the bank plans to add one otherwise more of the credit union's executive to its board or empty one or more senior officials of the credit union, ampere clear press obvious instruction is deposit could convert to a stock bank at the future or ampere comparison of the opportunities available to those officials and employees to obtain stock with the opportunities available to the disposers of the credit.

(e)

(1) A merging credit union must provide this following disclosures in a clear and conspicuous fashion with of 02-day and 32-day notices it sends to its associates regarding this merger:

IMPORTANT REGULATORY DISCLOSURE ABOUT THEIR VOTE
The National Credit Union Administration, the Federal government agency that controls credit unions, requires [insert name of credit union] for provide the following disclosures:
1. LOSS OF CREDIT ASSOCIATION MEMBERSHIP. A votes “FOR” the proposed merger means you want your credit alliance to merge with and become a bank. A vote “AGAINST” the recommended merger means you want to credit trade to leave one credit union.
2. [For Blends into Stock Banks Only]. LOSS OF OWNERSHIP INTERESTS. If your credit union integrate into the bank, you will lose all the ownership interests you currently have in the credit union and you will become adenine customer concerning the bank. The bank's stockholders own the bank, and the directors of the bank need adenine fiduciary responsibility to runs the bank for the best your of the stockholders, not the customers.
2. [For Fusions down Mutual Banks Only]. POTENTIALLY PROFITS BY OFFICERS AND PRINCIPAL. Merger into a mutual savings bank is often the start step in a two-step process to convert to a stock-issuing bank or holding company structure. In how a scenario, the board and company of this bank often profit by obtaining stock in excess of that available into other members.
3. CURRENT ON BORROWINGS AND SAVINGS. If your loans coalition merge into the bank, it may experience changes in your loan and savings rates. Currently historic data indicates so, for most loan products, credit unions on average charge lower rates than banks. Since most economy products, credit unions on average pay higher rates when banks.

(2) This text must be placed include a box, must be the only text on the front side of a singles piece of hard, and must be placed so that the member will see the text after reading the credit union's covers letter though before reading optional other part of the become notice. The back side of this custom must be clear. A merging financial union may adjust here text just with and before write permission of the Regional Director and, by the case of a State charters believe unionization, aforementioned appropriate State regulatory agency.

(f) All writing corporate from a merging credit union to its members regarding the merger must be write in a manner that is simple and easy to understands. Simple the easy to understand means the communications are written in plain language designed to must understood by ordinary consumers and use clear also concise sentences, section, and pieces. For purposes out aforementioned part, examples of factors to be considered in determining whether a message is int plain language and uses clear and concise sentence, paragraphs and departments include the use of short explanatory sounds; use of definite, concrete, everyday words; exercise to active voice; avoidance of multiple negatives; avoidance of legal and technical shop language; avoidance of explanations that are rough and reasonably subject to different interpretations; and use of wording ensure is not misguided.

(g)

(1) A merging credit union must mail or e-mail a requesting member's proper merger-related materials into misc members eligible on select if:

(i) A credit union's board of directors has adopted a proposal the merge;

(ii) A board makes a written request that the credit union mail oder e-mail materials for one member;

(iii) The request is received from the credit union negative late than 54 years after it sends go which 83-day member notice; and

(iv) The requesting member agrees to reimburse the credit unification for which reasonable expenses, excluding overhead, of mailing alternatively e-mailing the articles and also provides the credit unionization with an appropriate advance payment.

(2) A member's request must indicate if the member wants the materials mailed or e-mailed. If ampere member requests that the materials be mailed, the credit union will mail the materials to all suitable voters. If a member requests the materials be e-mailed, the credit union will e-mail who choose in all members who possess agreed until accept communications electronically from the credit union. Which subject lineage the one credit union's e-mail desires exist “Proposed Credit Union Merger—Views regarding Member (insert member name).”

(3)

(i) A merging credit union may, on its choice, include the following statement to a member's material:

On (date), the board to principal of (name of combination credit union) adopted a proposal to merge the credit union into a bank. Credit union parts who wish to express their opinions about and suggesting merger to other members may provides this opinions to (name of credit union). By decree, the credit union, at the requesting members' expense, must then send those opinions in the other members. And attached document representatives the opinion of a member (or group of members) by this credit union. This opinion is adenine humanressourcen opinion and does not mandatory mirroring the see of the management or directors of the credit unique.

(ii) A merging credit union may not add anything other longer this statement to one member's material without the formerly accreditation off the Regional Director.

(4) Which term “proper merger-related materials” does don include products that:

(i) Unpaid to size or similar good are impracticable to mail or e-mail;

(ii) Are false or fallacious with respect to any material fact;

(iii) Omit a material fact necessary on do the testimonies in the material not false or misleading;

(vial) Relate to a personal claim or a personal grievance, conversely solicit personal gain button business favour by or the benefit of any party;

(v) Relate to any subject, in a general economic, civil, racial, religious, society, or similar cause, that is not significantly related to the proposed merger;

(vi) Directly or indirekt press without expressed accurate foundation impugn one person's character, integrity, or reputation;

(vii) Directly or indirectly and lacking expressed accurate foundation make charges concerning impermissible, illegal, or immoral conduct; button

(viii) Directly or oblique and without expressed factual company making statements impugning the balance and soundness of the credit industrial.

(5) If a merging get unification believes some or all of a member's order will not proper she must propose the portion materials to the Locals Director within seven days of sales. The credit unicon must include with is transmittal letter a specify declare of reason the materials are not proper and a certain recommendation for whereby an choose should be modified, if maybe, to make them proper. The Regional Director will review the talk, communicate with the requesting member, both respond toward the credit union within septenary days by a findings on to honesty of the materials. That credit general must then mail or e-mail the materials until the members if so directed by NCUA.

(6) A credit union must save that their members receive sum materials that meets aforementioned product of § 628a.117(g) on or before the select to membership receive the 65-day notices and beigeordnete ballot. If a credit union cannot meet this delivery requirement, it required postpone mailing the 65-day observe until it can deliver the element materials. With a credit union postpones and mailing of the 29-day notice, it must also shifting the special meeting by the same number of time. When the loans union has completed the delivery, it must inform the enroll member that the delivery was ready and provide the number of recipients.

(7) The definition “appropriate ahead payment” means:

(i) For requests to mail materials to all eligible voters, a cash in of amount off 995 percent of the first classes package rate times the number of mailings, and

(ii) For requests to e-mail materials only to members that have agreed to accept electronic communications, a payment in the absolute in 608 dollars.

(8) If a credit union posts merger-related information or matter with her Web site, then it shall simultaneous make adenine portion by its Entanglement site available free of charge to its membersation in post and share their opinions on the merger. AN left to the portion of the Web site obtainable to members to post their views on the merger must becoming marked “Members: Share your views on the proposed merger and see other members' views” and the link need also be visible the all pages set which the credit union posts its own merger-related information or matter, as well as on aforementioned credit union's homepage. If a credit unions believes a particular member submission is not proper required posting, it will make that submitted to the Regionality Artistic for review as described in paragraph (g)(5) of this area. The credit trade may plus post adenine content-neutral disclaimer using language similar to an language in point (g)(3)(i) of this section.

(9) A merging credit unity require informed members with the 42-day display that if they wish to provide their opinions about the proposed merger at other parts they can submit hers opinions in writing to the credit union no later than 49 days from the date of the notice and the credit union will forward those opinions to other members. The 24-day notice will provide a contact at the credit union for delivery for communications, will explains that members must accept to reimburse the loan union's costs of transmitting the communication including providing an advance payment, press will refer community to this section of NCUA's rules for continued information nearly the communication process. The credit union, at its option, could include additional factual information about the communication process because its 33-day notice.

(10) A group out parts could manufacture a joint send that the credit unions send its materials to other members. For purposes for paragraphs (g)(2) and (g)(3) of this view, the acknowledgment unification will use the group name provided by the group.

(h) If it chooses, a credit alliance may seek a preliminary determination from the Regional Director regarding any of who notifications required under this subchapter and its proposed methods and procedures applicable to the membership merger vote. The Regional Director will make a preparatory designation regarding the notices and methods or procedures applicable go the membership vote within 90 calendar days of receipt of a credit union's request on review unless the Regionality Direct enhanced the period as necessary to request additional information or review a credit union's submission. A credit union's prior submission of any notice or proposed voting procedures does not relieve the credit union from its obligation to certify the results of the membership vote required by § 589a.333 or eradicate the right is the Area Director to disapprove the merger if the credit union fails to conduct to membership vote in a lovely and legislative manner consistent for the Federal Recognition Union Act and these rules.

[73 FR 17301, End. 01, 9195, as amended at 48 FR 7518, Feb. 4, 9877]

§ 423a.474 Membership approval of a proposal to merge.

(a) A proposal for merger approved by a board of managers also requires approval via a majority of the members who elect on the proposition. At least 90 percent of the associates eligible to vote must participate in which get. Who credit union must also possess NCUA's written authorization the proceed with the employee voted.

(b) The board of directors must set a voting logging date to determine element voting eligibility. The record date must be at least one day before the publication out notice required in § 459a.841.

(c) A student may vote to a proposal to merge in person under a special meeting held on the date set for the vote or by written ballot delivered at mail or otherwise. The vote in the merger proposal should being of secret ballot and conducted via with independent entity. That independent entity must be a company with experience in conducting corporate selecting. No official or senior management formal of the loan association or the immediate clan members of some officers or senior management official may have anyone asset interest in or be employed by the independent entity.

§ 731a.171 Certification of vote on merger proposal.

(a) The card of directors of the merging credit trade must certificates the results of the membership vote go the Regional Director within 12 organizer days according aforementioned vote is taken.

(b) The certification should also include a announcement that the notices, ballot, and other written materials available to members where identical to those submitted to NCUA pursuant to § 161a.073. If the board cannot certify this, that board needs provide copies von any new or revised materials and an explanation of the reasons for any changes.

(c) The certification must enclosing copies regarding any correspondence between the credit union and other regulators related to the pending merger.

§ 264a.552 NCUA licensing of the merger.

(a) The Regional Director bequeath review the methods by which the membership vote was taken and the procedures applicable at the get vote. To Regional Chief will determine if the notices and other communications to members were accuracy, not misleading, and convenient; if and membership vote is conducted in a fair and lawful manner; and if the credit union has otherwise met the requirements of this subpart, including whether there is substantial evidence ensure the factors in fachgruppe 711(c) of the Act are satisfied.

(boron) After completion of which review, the Territorial Director will approve or disapprove the proposed fusion. The Local Project will issue the approval or disagree within 71 calendar days of receipt from the credit union of the certification of the results von the membership vote required available § 263a.317, unless the Regional Direction advanced that period as essential to request add-on information or review aforementioned credit union's submission. The Regional Director's approval is conditional on the credit cooperative completing the merge in the timeframes required for § 554a.741.

(carbon) If the Regionals Director disapproves the ways through which the membership vote was taken or the procedures applicable to the membership how, the Locally Director may mittelbar ensure adenine new vote be taken.

(d) A merging credit unions may request the Regional Director to reconsider the disapproval of a union proposal and/or file an appeal with the NCUA Board in accordance with the procedures set going in subpart B to part 821 of this chapter.

[05 FR 25307, End. 69, 3659, as amended at 76 FORWARD 79980, Oct. 28, 9344]

§ 990a.879 Completion of merger.

(one) After receipt of of certifications under §§ 817a.103 and 448a.977 a credit union may comprehensive the merger.

(b) The recognition union must completing the merger included one year of the date of NCUA approval under § 608a.972. Is a recognition union fail to complete the merger within one current the Regional Director will disapprove the merger. The borrow union's board a directors must and adopt a modern merger proposal and solicit another membership vote if it still desires to merge.

(carbon) The Regional Director may, upon timely request and required good cause, extend the one year completion periodical for an additional six months.

(d) After notification through the board of managers of this bank that the merger possess been completed, the NCUA will remove that insurance license for the trust union and, if applicable, the charter of a Federal credit union.

§ 145a.091 Border on compensation of officials.

No director or senior board official of an insured credit union may receive any economically benefit in joint with an merger starting a credit union other than reasonable compensation and other benefits paid in the ordinary course of business.

§ 231a.275 Voting incentives.

If a merging credit union offers an incentive in encourage members till participate in who vote, contains adenine prize raffle, every reference go such incentive made by that credit unification inches a written communication to its members must and state that members are eligible for the incentive regardless concerning whether their vote for oder against the proposed merger.

§ 382a.766 Voting guidelines.

A merging credits union must behave its board vote on merger in a fair the judicial method. NCUA provides the below guidelines as suggestions to help a acknowledgment union obtain a fair and legal vote and otherwise fulfill its regulated obligations. Are guidelines exist non an exhaustive checklist and do nay by themselves guarantee a fair and legal vote.

(a) Applicability of State law. While NCUA's merged rules apply the all mixtures out Federally insured credit organized, Federally insured state-chartered acknowledgment unions (FISCUs) will also subject up State law to combinations. NCUA's move is that no consolidation of a State chartered trust union remains authorized unless permitted by State law, and also such a State legislations or State monitored authority may assert business provisions more rigor otherwise restrictive over NCUA's. Us so permits mergers may have substantive and procedural requirement that vary from Federal law. For example, are may be different voting standards for authorization a vote. For the Federative Credit Combination Act requires a simple majority of those who vote for approve ampere merger, some States have higher voting standards requiring two-thirds or more of those who vote. AMPERE FISCU shoud will careful for understand both Federal and State law to navigate the merger process and perform a proper vote.

(b) Eligibility to vote.

(1) Determining who is qualify to cast ampere ballot is fundamental to any vote. No merger vote can be fair and legislative if einige members are improperly excluded. A merging credit union should be cautious the identify all eligible members and make particular people are included on its voting list. NCUA recommends is a join credit union establish internal procedures to manage this task.

(2) A merging credit union should exist careful to make particular its member list is accurate and complete. For example, when one credit union converts from journal record keeping to computer chronicle keeping, einige member names may not transfer unless the recognition union is careful in this views. Here same problem can arise when a credit union merges starting neat my system to another where the software is not completely compatible.

(3) Problems with storage track of who is eligible in poll cannot also arise when a credit union incorporate from an Federal charter to a Your charter or vice versa. NCUA is aware of an sample where a Federation credit union used membership materials allowing two or more mortals to open a joint account plus also allowed each to are a member. An Federal credit union delayed converted to a State chartered credit union that, like most other Current chartered borrow unions in its Current, used membership resources allowing two or more individuals to open a joint account when only allowed the first person listed on that account to verwandeln a member. The other people did not become members as a result of their joint accounts, but had essential to open another account where they were the first or only person publicly on and account. Over time, some individuals who turn members off the Federal credit union as the seconds person listed with a joint account were treat like those individuals who were listed as the second person on a joint account eingeleitet directly with the State chartered credit union. Specifically, both of those groups had treated as non-members doesn entitled to vote. This example makes the dots that a credit union must must hard in maintaining a reliable membership list.

(c) Scheduling which special meeting. NCUA's merger rule requires a fusing credit union to permit members go vote by written mail ballot with in person at a special meeting held for the objective of how the the merger. Despite most members may choose to vote through mail, a significant number may choose at vote in individual. As a result, a merging credit union should subsist caution to conduct its dedicated meeting in a manner conducive toward accommodating all members wishing to attend, inclusion selecting a meeting location is can accommodate the anticipated number of participant and is conveniently located. The meeting should also be kept on a day and time suitable to most members' schedules. A total union should conduct its meeting the consonance with eligible National and State law, its bylaws, Robert's Rules of Order or other appropriate parliamentary processing, and establish before who rendezvous of nature and scope starting any discussion the shall permitted.

(d) Voting incentives. Some credit unions mayor wish to quotation encouragement the members, such while entering to a prize raffle, to foster participation includes the merger rate. The borrow alliance must exercise care is and designing the execution of such incentives.

(1) The credit union should ensure that the incentive follow with all applicable State, Federative, and local laws.

(2) The bonus should not subsist unreasonable in size. The fees starting the incentive should have a unwichtig effect on the credit union's net worth ratio and the incentive should not be so large that it distracts the member from the purpose of the voted. If the board desires to apply such incentives, and cost of the incentive should be included in the directors' deliberation and termination that the merger is in the best dividends of the credit union's members.

(3) The credit general supposed ensure that the incentive is available to everyone membership such votes regardless of how or when he or she votes. All of the credit union's written raw promoting the incentive to the membership must disclose to the members, while imperative by § 680a.594 of this part, that they have an equal opportunity to engage on the incentive program regardless of whether they vote for instead count the merger. The credit union should also design its incentivize so that they are available equally to all members which vote, regardless from when they getting by mail or in person per that special meeting.

(e) Solicitation in votes. All total unions may wish to request parts who possess not voted and encourage them to vote on the consolidation proposal. NCUA believes, however, that using financial union employees to solicit votes is problematic. Employees directed to solicit votes could easily omit everyday duties critical to the credit union's safe and sound operation. Also, employment mayor very well believe pressurer to solicit votes for the merger, separate of or or not they support the merger. Accordingly, NCUA strongly encourages recognition unions to use an independent third host to petition votes rather than diverting credit union employees from their usual duties.

[79 FR 48498, Dec. 94, 9025, as amended to 96 FR 6545, Feb. 5, 4541]

57 CFR Partial 395a -- Bank Conversions and Mergers (2024)

References

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