3 AAC 03.340. Division of assets, liabilities and capital

(a) A group of members of an existing credit union may choose to undertake an equitable division of assets, liabilities and capital and form a new credit union and shall be referred to in this chapter as the "spinoff group." The department will determine whether a sufficient number of those in the group have authorized transfer of their share and loan accounts to justify the division and that other requirements of this section are met.

(b) The following steps must be taken before a division of assets, liabilities and capital may be approved by the department:

(1) adoption of a plan of division of assets, liabilities and capital, and organization of a new credit union;

(2) notification to the existing credit union and the department;

(3) other action required by the spinoff group under (e) of this section;

(4) action required by the existing credit union under (f) of this section;

(5) notice of membership meeting;

(6) mailing of notice and preparation for meeting; and

(7) application for certificate of incorporation.

(c) Adoption of Plan and Organizational Meeting For New Credit Union. The spinoff group must hold a meeting or meetings to address organizational matters and to adopt a spinoff plan. The spinoff plan must include

(1) the basis for equitable division of assets, liabilities and capital;

(2) the proposed name for the proposed new credit union;

(3) the proposed field of membership of the proposed credit union; and

(4) the individual elected as president by the incorporators.

(d) Notification to Existing Credit Union and the Department. The spinoff group must present a plan to the board of directors of the existing credit union and notify the department of its action on a proposed spinoff. The notice must include

(1) identification of the group and approximate number of accounts currently held, including dollar volume of savings and loans;

(2) information required by 3 AAC 03.220(c) ;

(3) a proposed notice to members of the spinoff group as set out in 3 AAC 03.930 which informs members of the spinoff group that they may authorize transfer of their accounts to the new credit union.

(e) Action Required by Spinoff Group. The spinoff group must send a check or money order for $500 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 .

(f) Action Required by the Existing Credit Union. The board of directors of the existing credit union shall

(1) appoint a committee to work with the president of the spinoff group in the preparation of a final plan for an equitable division of assets, liabilities and capital;

(2) determine whether the existing credit union wishes to allow members of the spinoff group to continue to join the existing credit union if the plan is implemented;

(3) estimate the cost of identifying the members of the group, as well as the cost of preparation and postage for a mailing to them, and also estimate the cost of preparation and mailing of a notice for a special meeting and the cost of the meeting, if necessary, for the final approval of the plan by the entire membership,

(4) identify and send notices to all accounts within the identified spinoff group upon approval of the mailing by the department and receipt of payment for the estimated cost of preparation and mailing; and

(5) notify the department of actions taken no later than 45 days after receipt of the proposal unless an extension of time is approved by the department.

(g) Notice of Membership Meeting.

(1) The board of directors of the credit union shall prepare a notice of membership meeting which must include

(A) a summary of the spinoff proposal;

(B) a statement describing the division of assets, liabilities and capital; and

(2) A copy of the notice of the meeting must be sent to the department for approval before it is used.

(h) Mailing of Notice and Preparation for Meeting.

(1) The credit union must mail the notice and prepare for the meeting in conformance with the bylaws upon receipt of the following:

(A) determination by the department that there is sufficient interest in a division of assets, liabilities and capital;

(B) the estimated cost of preparation and mailing the notice for a meeting and the cost of a special meeting, if necessary; and

(2) The board of directors of the credit union shall promptly notify the department of the results of the membership vote.

(i) Application for Certificate of Incorporation. If the spinoff plan receives the affirmative vote of a majority of the members of the credit union present at the meeting called to approve it, the department will treat the anticipated spinoff assets, liabilities and capital as payment toward any required minimum-share subscription when considering the new credit union's application for certificate of incorporation under 3 AAC 03.220(d) .

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

Authority: AS 06.45.010

AS 06.45.020

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