§660. Voluntary dissolution

A. A credit union may elect to dissolve voluntarily and liquidate its affairs in the manner prescribed in this Section.

B. The board of directors shall adopt a resolution recommending the credit union be dissolved voluntarily, and directing that the question of liquidation be submitted to the members.

C. Within ten days after the board of directors decides to submit the question of liquidation to the members, the president shall notify the commissioner and any government agency or other organization insuring member accounts thereof in writing, setting forth the reasons for the proposed liquidation. Within ten days after the members act on the question of liquidation, the president shall notify the commissioner and any government agency or other organization insuring member accounts, in writing, as to the action of the members on the proposal.

D. As soon as the board of directors decides to submit the question of liquidation to the members, payments on shares, share certificates, deposits, deposit certificates, withdrawal of shares, making any transfer of shares to loans, and interest, making investments of any kind, and granting loans shall be suspended, pending action by members on the proposal to liquidate. On approval by the members of such proposal, all such business transactions shall be permanently discontinued. Necessary expenses of operation shall continue to be paid on authorization of the board of directors or liquidating agent during the period of liquidation.

E. For a credit union to enter voluntary liquidation, approval by a majority of the members, in writing or by a two-thirds majority of the members present at a regular or special meeting of the members, is required. Where authorization for liquidation is to be obtained at a meeting of the members, notice in writing shall be given to each member, by first class mail, at least ten days prior to such meeting.

F. A liquidating credit union shall continue in existence for the purpose of discharging its debts, collecting on loans, distributing its assets, and doing all acts required in order to wind up its business. It may sue and be sued for the purpose of enforcing such debts and obligations until its affairs are fully concluded.

G. The board of directors or the liquidating agent shall use the assets of the credit union to pay: first, expenses incidental to liquidation including any surety bond that may be required; second, any liability due non-members; third, deposits and deposit certificates as provided in this Section. Assets then remaining shall be distributed to the members proportionately to the shares held by each member as of the date dissolution was voted.

H. As soon as the board of directors or the liquidating agent determines that all assets from which there is a reasonable expectancy of realization have been liquidated and distributed as set forth in this Section, they shall execute a certificate of dissolution on a form prescribed by the commissioner and file the same, together with all pertinent books and records of the liquidating credit union, with the commissioner, whereupon such credit union shall be dissolved.

I. A credit union having an occupational group common bond where the sponsor organization is dissolved must submit to the commissioner of financial institutions for approval to continue the credit union service to its members a plan to protect the rights of all members of record at the time of the loss of the sponsor organizations.

Amended by Acts 1954, No. 530, §1; Acts 1982, No. 436, §1.