N.D. Cent. Code § 6-07.2-19

6-07.2-19. Voluntary liquidation of a credit union or cooperative financial institution

1. A credit union or cooperative financial institution may go into voluntary liquidation

following a vote of the majority of the board of directors and approval by the majority of

its members in writing or by a vote in favor of the liquidation by a majority of the

members of the credit union or cooperative financial institution at a regular meeting of

the members or at a special meeting called for that purpose.

a. When authorization for liquidation is to be obtained at a meeting of members:

(1) Notice in writing must be given to each member at least ten days before the

meeting and the notice must inform members they have the right to vote on

the proposed liquidation.

(2) The minutes of the meeting must show the number of members present and

the number that voted for and against liquidation.

b. If approval by a majority of all members of a credit union is not obtained at the

meeting of members, authorization for voluntary liquidation may be obtained by

having a majority of members sign a statement in substantially the following form:

We the undersigned members of the _____ Credit Union, Charter No. _____,

hereby request the dissolution of our credit union.

c. If approval by a majority of all members of a cooperative financial institution is not

obtained at the meeting of members, authorization for voluntary liquidation may

be obtained by having a majority of members sign a statement in substantially the

following form: We the undersigned members of the _____ cooperative financial

institution, Charter No. _____, hereby request the dissolution of our cooperative

financial institution.

2. The board of directors of a credit union or cooperative financial institution in voluntary

liquidation:

a. Is responsible for conserving the assets, for expediting the liquidation, and for

equitably distributing the assets to members.

b. Shall determine all persons handling or having access to funds of the credit union

or cooperative financial institution are adequately covered by surety bond.

c. Shall appoint a custodian for the credit union's or cooperative financial

institution's records that are to be retained for five years after the charter is

canceled.

d. May appoint a liquidating agent and delegate part or all of these responsibilities to

the agent and may authorize reasonable compensation for the agent's services. A

liquidating agent must be adequately bonded for faithful performance of the

agent's duties, and the coverage must remain in effect or the discovery period

extended for at least four months after the final distribution of assets.

3. The supervisory committee, a certified public accountant hired by the supervisory

committee, or if the bylaws do not establish a supervisory committee, a certified public

accountant hired by the board of directors, is responsible for making periodic audits of

the credit union's or cooperative financial institution's records, at least quarterly, during

the period of liquidation.

4. Within three days after the decision of the board of directors to submit the question of

liquidation to the members, the president shall notify the commissioner and the

regional director of the national credit union administration or federal deposit insurance

corporation as appropriate in writing, setting forth in detail:

a. The reasons for the proposed action;

b. The previous month-end balance sheet and income statement; and

c. A written plan for the liquidation of assets, payment of creditors, and payment of

shares to be completed within one year of the date of membership approval to

liquidate.

5. Within three days after the action of the members on the question of liquidation, the

president shall notify the commissioner and the regional director of the national credit

union administration or federal deposit insurance corporation as appropriate in writing
ets, payment of creditors, and payment of

shares to be completed within one year of the date of membership approval to

liquidate.

5. Within three days after the action of the members on the question of liquidation, the

president shall notify the commissioner and the regional director of the national credit

union administration or federal deposit insurance corporation as appropriate in writing

as to whether a majority of the members approved the proposed liquidation.

6. Within ten days of the decision to liquidate by the board of directors, a notice of the

decision must be handed to each member, electronically distributed, or mailed to the

member's last-known address to confirm in writing the shares and deposits held by the

member in the credit union or cooperative financial institution and the loans owed by

the member to the credit union or cooperative financial institution.

7. Within ten days of the approval of a majority of the members of a credit union or

cooperative financial institution of a proposal to liquidate, the board of directors of the

credit union or cooperative financial institution shall have prepared and mailed to all

creditors a notice of liquidation containing instructions to present claims to the credit

union or cooperative financial institution within ninety days for payment. New creditor

claims subsequent to this notice which are necessary for the continued operation of

the credit union during liquidation must continue to be paid upon authorization of the

board of directors or liquidating agent.

8. Immediately upon the decision of the membership to liquidate, the credit union or

cooperative financial institution may continue to do all things under the original

corporate name of the institution, to sue and be sued, to execute conveyances and

other instruments, to take, hold, and own property, and to do all other things as may be

necessary to realize upon the institution's remaining assets for the benefit of the

institution's members, but not to engage or continue in any new or other business

under the institution's charter or otherwise. At the discretion of the board of directors or

the liquidating agent, transactions upon membership transactional accounts may

continue to be honored up to the federal insurance limit until the accounts are sold or

otherwise liquidated.

9. At the commencement of voluntary liquidation of a credit union or cooperative financial

institution, the treasurer or agent conducting the liquidation shall file with the

commissioner a financial and statistical report and a schedule showing the name, book

number or account number, share balance, and loan balance of each member.

10. Credit unions or cooperative financial institutions in the process of voluntary liquidation

shall file with the commissioner a financial and statistical report as of December thirty-

first or within thirty days after such date. Additional reports, as determined by the

commissioner to be necessary, must be furnished promptly on written request.

11. When deemed advisable by the commissioner, an examination of the books and

records of a credit union or cooperative financial institution may be made before,

during, or following completion of voluntary liquidation. The commissioner shall set

fees for the examination at an hourly rate sufficient to cover all reasonable expenses of

the department of financial institutions associated with the examination. Fees must be

collected by the commissioner and deposited in the financial institutions regulatory

fund.

12. If at any time during the liquidation of credit union assets or cooperative financial

institution, it is found the value of remaining assets will not be sufficient to cover the

claims of creditors and shareholders, the board of directors or, if appointed, the

liquidating agent shall immediately notify the commissioner and the regional director of
he financial institutions regulatory

fund.

12. If at any time during the liquidation of credit union assets or cooperative financial

institution, it is found the value of remaining assets will not be sufficient to cover the

claims of creditors and shareholders, the board of directors or, if appointed, the

liquidating agent shall immediately notify the commissioner and the regional director of

the national credit union administration or federal deposit insurance corporation as

appropriate. Further liquidation of credit union or cooperative financial institution

assets or distributions to shareholders after notice requires written approval from the

commissioner.

13. With the written approval of the commissioner, a partial distribution of the credit union's

or cooperative financial institution's assets may be made to its members from cash

funds available on authorization by its board of directors or by a duly authorized

liquidating agent whose appointment specifically includes the authority. Partial

distributions cannot exceed the national credit union share insurance limit.

14. When all assets of the credit union or cooperative financial institution have been

converted to cash or found to be worthless and all loans and debts owing to it have

been collected, sold, or found to be uncollectible and all obligations of the credit union

or cooperative financial institution have been paid, with the exception of amounts due

its members:

a. The books must be closed and the pro rata distribution to members computed.

This computation must be based on the total amount in each member's share

accounts as of the date the board of directors voted to voluntarily liquidate.

b. The amount of gain or loss must be entered in each member's share account and

should be entered in the member's passbook or statement of account.

c. Promptly, funds must be distributed to each member. The funds must be mailed

to such members at their last-known addresses, electronically transmitted to the

members designated account, or handed to them in person.

d. The passbooks or written confirmations submitted by members to verify balances

must be retained with the credit union or cooperative financial institution records.

e. Unclaimed share accounts subject to the escheat or abandoned property laws of

the state or the state of the members' residence must be paid to the state as

required by such laws.

f. The commissioner must be promptly notified of the date final distribution of assets

to the members is started.

g. In the event of a loss on members share accounts, a claim must be submitted by

the board of directors or the liquidating agent if appointed, to the national credit

union administration or federal deposit insurance corporation as appropriate,

private share insurance if available, and bonding company.

15. Within one hundred twenty days after the final distribution to members is started, the

credit union or cooperative financial institution shall furnish to the commissioner's

office a schedule of unpaid claims. The board of directors of the credit union or

cooperative financial institution or the liquidating agent if appointed shall report money

in the account of a member who failed to surrender their passbooks or confirm their

balances, final distribution checks not cashed within one hundred twenty days, and

any unpaid claims to the unclaimed property division of the board of university and

school lands pursuant to chapter 47-30.2.