SF 1703

as introduced - 91st Legislature (2019 - 2020) Posted on 05/14/2019 08:48am

A bill for an act
relating to commerce; eliminating supermajority requirements for conversion,
merger, or consolidation of credit unions; amending Minnesota Statutes 2018,
sections 52.201; 52.203.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2018, section 52.201, is amended to read:

52.201 REORGANIZING FEDERAL CREDIT UNION INTO STATE CREDIT
UNION.

When any federal credit union authorized to convert to a state charter has taken the
necessary steps under the federal law for that purpose, deleted text begin seven or more members, deleted text end upon
deleted text begin authority deleted text end new text begin the affirmative vote new text end of deleted text begin two-thirds deleted text end new text begin a majority new text end of the members deleted text begin present and entitled
to vote and who shall have voted for such conversion deleted text end new text begin who vote on the proposal, a quorum
being present, new text end at a regular or special meeting upon deleted text begin 14 days mailed deleted text end new text begin at least seven but not
more than 30 days' new text end written notice to each member deleted text begin at the member's last known address deleted text end clearly
stating that such conversion is to be acted upon, and upon approval of the commissioner of
commerce, may execute a certificate of incorporation under the provisions of the state Credit
Union Act, which, in addition to the other requirements of law, shall state the authority
derived from the shareholders of such federal credit union; and upon recording such
certificate as required by law, it shall become a legal state credit union and the members of
the federal credit union shall without further action be members of the state credit union.
This includes members of the federal credit union on the basis of acceptance of small
employer groups provided the commissioner may require contemporaneous filing of
applications under section 52.05, subdivision 2. Thereupon the assets of the federal credit
union, subject to its liabilities not liquidated under the federal law before such incorporation,
shall vest in and become the property of such state credit union and the members upon
request shall be entitled to a new passbook showing existing share and loan balances. The
commissioner of commerce shall approve or disapprove of the conversion within 60 days
of the date the proposal is presented.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2019.
new text end

Sec. 2.

Minnesota Statutes 2018, section 52.203, is amended to read:

52.203 MERGER OR CONSOLIDATION.

Any credit union chartered by this state may merge with and be absorbed by any other
state or federal credit union, and any credit union chartered by this or any other state or any
federal credit union may be merged into a successor credit union chartered by this state,
upon approval of all regulatory agencies concerned, and upon compliance with this section
as regards the credit union chartered by this state. At the time of filing with the commissioner
of any proposed merger or consolidation plan, the credit unions proposing to merge or
consolidate shall submit a fee of $100 payable to the commissioner of commerce. The fee
shall be paid in equal parts by the credit unions' party to the proposal.

A credit union may be absorbed after deleted text begin two-thirds deleted text end new text begin a majority new text end of its members deleted text begin present and
entitled to vote deleted text end new text begin who vote on the proposal new text end have voted in favor of the merger at a special
meeting called by a majority of the board of directors for that purpose, upon deleted text begin 14 deleted text end new text begin at least 45
but no more than 90 calendar new text end days mailed written notice to each member at the member's
last known address new text begin if by mail, or by other verifiable means, new text end clearly stating the purpose of
the special meeting, or at any regular meeting after like notice of the purpose has been given.
Thereafter, the board of directors may execute an agreement of merger with the successor
credit union, subject to approval of the agreement by the commissioner of commerce. The
commissioner shall approve or disapprove of the agreement within 60 days of the date the
agreement is submitted. The approved agreement must be filed with the secretary of state.

If the successor credit union which absorbs one or more credit unions is chartered by
this state it may execute an agreement of merger upon approval of the agreement by the
commissioner of commerce and by the board of directors of the credit union. The
commissioner of commerce shall approve the merger agreement if it is in the best interest
of the credit unions involved. In any event, the commissioner of commerce shall approve
or disapprove of the merger agreement within 60 days of the date the agreement is submitted.
Members of, and persons eligible for membership in, the credit union being absorbed have
all rights of membership in the successor credit union.

The charter and license and all other rights and property of the credit union being absorbed
is deemed to be transferred to and invested in the successor credit union upon execution
and approval of the merger agreement without further action. Any pending action or other
judicial proceeding to which the credit union being absorbed is a party at the date of merger
does not abate by reason of the merger. If the credit union being absorbed is chartered by
this state, its corporate existence ceases upon the execution and approval of the merger
agreement without further action.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2019.
new text end