N.D. Cent. Code § 6-06-08.4

6-06-08.4. Prompt corrective action

1. For purposes of this section, the net worth categories are defined as:

a. Well capitalized. A credit union with a net worth ratio of seven percent or greater

which meets any applicable risk-based net worth requirement.

b. Adequately capitalized. A credit union with a net worth ratio six percent or more

but less than seven percent which meets any applicable risk-based net worth

requirement as defined by the state credit union board by rule.

c. Undercapitalized. A credit union with a net worth ratio of four percent or more but

less than six percent or fails to meet any risk-based net worth requirement.

d. Significantly undercapitalized. A credit union with a net worth ratio of two percent

or more but less than four percent, fails to increase its net worth, or fails to submit

or materially implement a net worth restoration plan.

e. Critically undercapitalized. A credit union with a net worth ratio less than

two percent.

2. A credit union may be reclassified into the next subordinate net worth category by the

commissioner or the state credit union board if it is determined that the credit union is

in an unsafe or unsound condition or has not corrected unsafe or unsound practices of

which it was, or should have been, aware. The board or commissioner may order a

credit union that is adequately capitalized, undercapitalized, significantly

undercapitalized, or critically undercapitalized to take prompt corrective action to

increase the credit union's net worth. Additionally, the order may require a credit union

that is undercapitalized, significantly undercapitalized, or critically undercapitalized to

submit an acceptable net worth restoration plan to the commissioner. A credit union

may request a hearing before the state credit union board within ten days of the order

to review the factual basis used to issue the request for prompt corrective action. The

decision made by the board during this hearing is final. If a hearing is not requested,

the initial decision of the commissioner or board is final. For a significantly

undercapitalized credit union that has no reasonable prospect of becoming adequately

capitalized or a critically undercapitalized credit union, the commissioner or board may

take possession of the credit union or appoint a conservator or liquidating agent for the

credit union in accordance with chapter 6-07.2.