KRS 286.6-700: Suspension of credit union operations.

(1) If it appears that any credit union is bankrupt or insolvent, or that it has willfully

violated this subtitle, or is operating in an unsafe or unsound manner, the

commissioner may issue an order temporarily suspending the credit union's

operations for not less than thirty (30) nor more than sixty (60) days. The board of

directors shall be given notice by registered mail of such suspension, which notice

shall include a list of the reasons for such suspension, or a list of the specific

violations of this subt itle, or both. The commissioner shall also notify any

government agency or other organization insuring the accounts of the credit union

of any suspension.

(2) Upon receipt of such suspension notice, the credit union shall cease all operations,

except those authorized by the commissioner. The board of directors shall then file

with the commissioner a reply to the suspension notice, and may request a hearing

to present a plan of corrective actions proposed if it desires to continue operations.

The board may request that the credit union be declared insolvent and a liquidating

agent be appointed.

(3) Upon receipt from the suspended credit union of evidence that the conditions

causing the order of suspension have been corrected, the commissioner may revoke

the s uspension notice, permit the credit union to resume normal operations, and

notify any interested insuring agency of such action.

(4) If the commissioner, after issuing notice of suspension and providing an opportunity

for a hearing, rejects the credit unio n's plan to continue operations, the

commissioner may issue a notice of involuntary liquidation and appoint a

liquidating agent. The credit union may request the appropriate court to stay

execution of such action. Involuntary liquidation may not be ordered prior to the

conclusion of suspension procedures outlined in this section.

(5) If, within the suspension period, the credit union fails to answer the suspension

notice or request a hearing, the commissioner may then revoke the credit union's

charter, appoint a liquidating agent and liquidate the credit union.