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2021 SPECIAL SESSION I
21100820DBe it enacted by the General Assembly of Virginia:
1. That § 6.2-1317 of the Code of Virginia is amended and reenacted as follows:
§ 6.2-1317. Supervisory merger or transfer of assets of insolvent or financially unstable credit union.
A. If the Commission finds that (i) a state credit
union is insolvent, that an emergency exists, or [ its
financial stability is threatened financially unstable ] and
that (ii) its merger into another credit union is desirable for the
protection of its members, and if the board of directors of both credit unions
approves a plan of merging the insolvent such state credit union
into another state credit union or a federal credit union, compliance with §
13.1-895 shall be dispensed with as to both credit unions and the approval of
the Commission of such plan of merger shall be the equivalent of approval by
more than two-thirds of the members of both credit unions for all purposes of
Article 11 (§ 13.1-893.1 et seq.) and Article 12 (§ 13.1-899 et seq.) of
Chapter 10 of Title 13.1.
B. If the Commission finds that (i) a state credit
union is insolvent, that or [ its financial stability is
threatened financially unstable ] and (ii) the acquisition
of its assets by another state credit union or a federal credit union is in the
best interests of its members, and that an emergency exists, it may,
with the consent of the board of directors of both credit unions as to the
terms and conditions of such transfer, including the assumption of all or
certain liabilities, enter an order transferring some or all of the assets of
such insolvent state credit union to such other state or federal credit
union and no compliance with the provisions of §§ 13.1-899 and 13.1-900
shall not be required.
C. In the case either of such a merger or of such a sale of
assets, the Commission shall provide require that prompt notice
of its findings of insolvency or financial instability and of the merger
or sale of assets be sent to the members of record of the insolvent or
financially unstable state credit union for the purpose of providing such
members an opportunity to challenge the finding that the state credit union is
insolvent or financially unstable. The relevant books and records of
such insolvent credit union shall be preserved and be made available to
such members for a period of 30 days after such notice is sent. The
Commission's finding of insolvency or financial instability shall become
final if a hearing before the Commission is not requested by any such member
within such 30-day period.
D. If, after such hearing provided in subsection C, the
Commission finds that the state credit union was is solvent
and financially stable, it shall rescind its order entered pursuant to
subsection A or subsection B and the merger or transfer of assets shall be
rescinded. After such hearing, however, if the Commission finds that the state
credit union was is insolvent or financially unstable, its
order shall be final.
E. Notwithstanding the provisions of subsection B of § 6.2-1327, or any other provisions of this chapter, the Commission may order a merger pursuant to subsection A or a sale of assets pursuant to subsection B. The continuing credit union, upon approval of the Commission, shall amend its bylaws to incorporate the specified common bond of interest of the insolvent or financially unstable credit union.
F. The Commission may authorize a financial institution whose
deposits are insured by a federal agency to purchase any of the assets of or
assume any of the liabilities of a credit union that is insolvent or in
danger of insolvency financially unstable, provided that prior to
exercising this authority the Commission shall use every reasonable effort to
effect a merger or consolidation with or purchase and assumption by another
credit union and shall have been advised by the insuring organization that it
cannot effect a merger, consolidation, or other disposition of the insolvent
or financially unstable credit union acceptable to the Commission.
2. That § 6.2-1318 of the Code of Virginia is repealed.