C.R.S.
Section 11-30-120
Suspension
- liquidation
- procedures
(1)
Intentionally left blank —Ed.(a)
If it appears that any credit union is insolvent, or that it has willfully violated any provision of this article, or that it is operating in an unsafe or unsound manner, the commissioner may issue his order for such credit union to show cause why its operations should not be suspended until such insolvency, violation, or manner of operation is rectified and afford the credit union an opportunity for a hearing not less than ten days nor more than twenty days after such order. Such order shall be in writing and delivered by registered or certified mail. If the credit union fails to answer such order or if any officer or director of or attorney for the credit union fails to appear at the time set for the hearing, the commissioner either may revoke the certificate of incorporation of the credit union or may order the immediate suspension of operations of the credit union, except the collection of payments on outstanding loans or other obligations due the credit union, or both, and may enforce any such order by an action, filed in the district court of the judicial district wherein the principal office of the credit union is located, seeking to enjoin further operations or to appoint a receiver for such credit union.(b)
Any credit union to which an order to show cause has been issued pursuant to paragraph (a) of this subsection (1) may include with any answer or may present at any hearing resulting from such order its proposed plan to continue operations and rectify the insolvency, violation, or manner of operation specified in said order; or the credit union may request that it be dissolved and liquidated and a liquidating agent be appointed by the commissioner. Any credit union may request a stay of execution of any order of the commissioner revoking its certificate of incorporation or suspending its operations by filing an action in the district court for the judicial district in which the principal office of the credit union is located, within ten days after the issuance of such order.(c)
If the commissioner revokes the charter of the credit union, he shall appoint a liquidating agent to liquidate the assets of the credit union pursuant to subsection (3) of this section.(d)
If in the opinion of the board an emergency exists which may result in serious losses to the members, the board may revoke the charter of a credit union and immediately appoint a liquidating agent without notice or a hearing. Notice of the board’s emergency determination shall be posted on the premises of the credit union that is the subject of the determination. Within ten days after an emergency determination by the board, the credit union or the directors of the credit union may file an application with the board to rescind such determination. The filing of an application to rescind a determination shall not act as a stay of the board’s action pursuant to this subsection (1). The board shall grant the application if it finds that its action was unauthorized and upon granting an application shall rescind its action and restore the credit union to its board of directors. If no application is filed within ten days after the board’s emergency determination, all action taken by the board shall be final.(1.5)
Intentionally left blank —Ed.(a)
The commissioner may appoint himself or herself or a third party as conservator of any credit union and immediately take possession and control of the business and assets of the credit union if the commissioner determines that:(I)
Such action is necessary to conserve the assets of the credit union or to protect the interests of its members from acts or omissions of the existing management;(II)
The credit union, by a resolution of its board of directors, consents to such action;(III)
There is a willful violation of a cease-and-desist order that results in the credit union being operated in an unsafe or unsound manner; or(IV)
The credit union is significantly undercapitalized and has no reasonable prospect of becoming adequately capitalized.(b)
The commissioner may appoint a conservator and take immediate possession of the credit union without prior notice or a hearing; except that, within ten days after the conservator is appointed, the credit union may file an appeal with the board requesting the board to rescind the commissioner’s appointment of a conservator. Upon receipt of a timely appeal, the board shall set a date for a hearing and determine whether the commissioner’s appointment should be rescinded; except that such appeal shall not act as a stay of the commissioner’s action. If the board finds the commissioner’s action was unauthorized, the board shall restore control of the credit union to its board of directors. If no appeal is filed within ten days after the commissioner’s appointment of a conservator, any action taken by the commissioner shall be final.(c)
In extraordinary circumstances, upon order of the board, any hearing conducted pursuant to this subsection (1.5) shall be exempt from any provision of law requiring that proceedings of the board be conducted publicly. Such extraordinary circumstances occur when specific concern arises about prompt withdrawal of moneys from the credit union.(d)
The conservator shall have all the powers of the members, directors, officers, and committees of the credit union and shall be authorized to operate the credit union in its own name or to conserve its assets as directed by the commissioner. The conservator shall conduct the business of the credit union and make regular reports to the commissioner until such time as the commissioner has determined that the purposes of conservatorship have been accomplished and the credit union should be returned to the control of its board of directors. All costs incident to the conservatorship shall be paid out of the assets of the credit union. If the commissioner determines that the purposes of the conservatorship will not be accomplished, the commissioner may proceed with the involuntary liquidation of the credit union in the manner described in subsection (1) of this section.(e)
If a conservator is appointed, and is other than the national credit union administration, another approved insurer, or an employee of the division of financial services, the conservator and any assistants shall provide a bond, payable to the credit union and executed by a surety company authorized to do business in this state, which meets with the approval of the financial services board, for the faithful discharge of their duties in connection with such conservatorship and the accounting for all moneys coming into their hands. The cost of such bond shall be paid from the assets of the credit union. Suit may be maintained on such bond by any person injured by a breach of the conditions thereof. This requirement may be deemed met if the financial services board determines that the credit union’s fidelity bond covers the conservator and any assistants.(2)
Any credit union may be voluntarily dissolved and liquidated upon majority vote of the entire membership thereof at a meeting especially called for the purpose or at the annual meeting where notice of such proposed action is mailed to the members at least thirty days prior to such meeting. In either event, a copy of the notice shall be delivered to the commissioner not less than ten days prior to such meeting. Any member of a credit union may cast his ballot for or against such dissolution and liquidation by mail within twenty days after such meeting. If a majority of the members of the credit union vote in favor of dissolution and liquidation, the board of directors, within five days after the close of voting, shall notify the commissioner of such action and specify the names and addresses of the directors and officers of the credit union who will conduct the dissolution and liquidation of the credit union. Upon such favorable vote, the credit union shall cease to do business except for the collection of payments on outstanding loans or other obligations due the credit union.(3)
Under any procedure to dissolve and liquidate a credit union pursuant to subsection (1) or (2) of this section, the credit union shall continue in existence for the purpose of discharging its debts, collecting and distributing its assets, and doing all acts required in order to wind up its business, and it may sue and be sued for the enforcement of its debts and operations until its affairs are fully adjusted in liquidation. The assets of the credit union shall be used to pay: First, the expenses incidental to liquidation; second, liabilities due nonmembers; and third, deposits and savings club accounts. Any remaining assets shall be distributed to the members proportionately to the shares held by each member as of the date of dissolution.(4)
Upon the liquidation and distribution of all assets of the credit union which may be reasonably expected to be collectible, the board of directors or the liquidating agent, as the case may be, shall execute in duplicate a certificate of dissolution, prescribed by the commissioner, upon which date the credit union shall cease to exist, and file the same with the secretary of state.
Source:
Section 11-30-120 — Suspension - liquidation - procedures, https://leg.colorado.gov/sites/default/files/images/olls/crs2023-title-11.pdf (accessed Oct. 20, 2023).
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