N.Y. Banking Law § 487-a: Conversion of a credit union into a mutual savings bank

§ 487-a. Conversion of a credit union into a mutual savings bank. 1.

Any credit union having its place of business in this state may convert

to a mutual savings bank, subject to the requirements and procedures set

forth in the laws and regulations governing mutual savings banks.

2. A proposal for a conversion described in this section shall first

be approved, and a date set for a vote thereon by the members (either at

a meeting to be held on that date or by written ballot to be filed on or

before that date), by a majority of the directors of the credit union.

Approval of the proposal for conversion shall be by the affirmative vote

of a majority of the members of the credit union who vote on the

proposal.

3. A credit union that proposes to convert to a mutual savings bank

under this section shall submit notice to each of its members who is

eligible to vote on the matter of its intent to convert. Such notice

must adequately describe the purpose and subject matter of the vote to

be taken at the meeting or by submission of a written ballot. Such

notice shall be submitted:

a. ninety days before the date of the member vote on the conversion;

b. sixty days before the date of the member vote on the conversion;

and

c. thirty days before the date of the member vote on the conversion.

The notice submitted thirty days before the date of the member vote on

the conversion shall contain a written ballot, and shall clearly inform

the member that the member may vote at the meeting or by submitting the

written ballot. Such notice also shall state the date, time and place of

the meeting.

4. The superintendent shall require a credit union that proposes to

convert to a mutual savings bank under this section to submit a notice

to the superintendent of its intent to convert during the ninety-day

period preceding the date of the completion of the conversion,

accompanied by an investigation fee as prescribed pursuant to section

eighteen-a of this chapter.

5. No director or senior management official of a credit union may

receive any economic benefit in connection with a conversion of the

credit union as described in this section, other than:

a. director fees; and

b. compensation and other benefits paid to directors or senior

management officials of the converted institution in the ordinary course

of business.

c. For purposes of this subdivision, the term "senior management

official" means a chief executive officer, an assistant chief executive

officer, a chief financial officer, and any other senior executive

officer as defined by the appropriate federal banking agency pursuant to

section 32(f) of the Federal Deposit Insurance Act, 12 U.S.C. 1831i(f).

6. The member vote concerning charter conversion under this section

shall be verified by the superintendent. If the superintendent

disapproves of the methods by which the member vote was taken or

procedures applicable to the member vote, the member vote shall be taken

again, as directed by the superintendent.

7. Upon completion of a conversion described in this section, the

credit union shall no longer be subject to any of the provisions of this

article.

When the superintendent shall have approved the organization

certificate and the proposed bylaws and shall have issued the

authorization certificate, as provided in article six of this chapter,

the credit union shall cease to be a credit union and shall thereupon be

converted into a mutual savings bank; provided, however, that such

credit union shall be deemed to be continued for the purpose of

prosecuting or defending suits and of enabling it to wind up its affairs

as a credit union and to dispose of and convey its property.

At the time when such conversion becomes effective, all the property

of the credit union shall immediately by act of law and without any

conveyance or transfer become the property of the mutual savings bank

and the mutual savings bank shall succeed to all the rights, obligations

and relations of the credit union.