3 AAC 03.310. Merger

(a) Any proposed credit union merger of a state chartered or federally chartered credit union with a credit union established under AS 06.45 must be accomplished under a merger plan filed with and approved by the department.

(b) A merger may be accomplished if the following procedures are completed:

(1) adoption of a merger plan by the board of directors of each credit union;

(2) notification to the department;

(3) investigation by the department and notice of intent;

(4) approval of notice of meetings by the department;

(5) approval by members of the merging credit unions;

(6) final determination; and

(7) implementation.

(c) Adoption of Merger Plan. A majority of the board of directors of each credit union must, by resolution adopted by each board, approve a merger plan which sets out:

(1) the name of the credit union proposing to merge and the name of the credit union into which it proposes to merge, referred to in this chapter as the surviving credit union;

(2) the terms and conditions of the proposed merger;

(3) any amendments to the articles of incorporation of the surviving credit union caused by the merger;

(4) current financial reports of each credit union;

(5) current delinquent loan schedules annotated to reflect collection problems;

(6) combined financial reports; and

(7) other provisions as required by the department.

(d) Notification to the Department. The board of directors of each credit union must notify the department of its action on a proposed merger. The notice must include

(1) the merger plan adopted by the boards;

(2) a proposed notice of meeting of members to approve the merger if required by the bylaws of the credit union which shall be in conformance with the bylaws and must contain

(A) a summary of the proposed merger plan;

(B) a statement of reasons for the proposed merger;

(D) a statement to inform the members that they have the right to vote on the merger proposal at the meeting.

(e) Investigation and Notice of Intent. The department will conduct an investigation of the application and, if the department finds that the application is in order and that the merger proposal complies with state law and regulations, it will issue a public notice of the department's intent to approve the merger and to issue a certificate of merger and authority. The notice must inform the public of the date by which opposition in writing to the department's approved action must be received.

(f) Approval of Meeting Notice. If the department determines that the proposed notice of meeting is adequate, the department will issue an approval and return the notice to the appropriate credit union for distribution.

(g) Membership Meetings. Members of the credit unions must vote on the merger proposal at separate meetings to be held within 120 days after the department's approval of the proposed merger. The merger proposal must be approved by an affirmative vote of a majority of the members of a credit union organized under AS 06.45 present at a meeting called to approve the plan. The boards of directors of the credit unions shall promptly notify the department of the results of the membership vote. The credit unions must also provide the department with the following:

(1) statements expressing the opinion of NCUA and, where applicable, another state's credit union supervisory agency regarding the merger proposal;

(2) application and agreements for insurance of member accounts by NCUA if the merging credit union is not already insured by NCUA;

(3) a check or money order for $1,000 made payable to the State of Alaska as a partial prepayment of investigation expenses incurred by the department in accordance with AS 06.01.010 ; and

(4) other materials as required by the department.

(h) Final Determination. If the department does not receive a request for hearing within the time specified in the public notice required by (e) of this section, or determines after a hearing that the application is in order and all requirements have been met, the department will approve the application and issue a certificate of merger and authority.

(i) Implementation.

(1) The surviving credit union must notify the department of completion of the merger and forward the following documents to the department:

(A) financial reports for each credit union before the completion of merger;

(B) a financial report for the surviving credit union after the completion of merger;

(2) If the department is satisfied that the merger has been accomplished in accordance with the approved merger plan, it will terminate the corporate status of the credit union which has lost its identity in the merger if the credit union was organized under AS 06.45.

(3) A surviving credit union is vested with all of the assets and is responsible for all the obligations of a merging credit union.

History: Eff. 1/21/81, Register 77

Authority: AS 06.45.010

AS 06.45.290

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