| (a) Definitions. The following words and terms, when
used in this section, shall have the following meanings, unless the
context clearly indicates otherwise.
(1) Acquirer credit union--The credit union that will
continue in operation after the merger/consolidation.
(2) Acquiree credit union--The credit union that will
cease to exist as an operating credit union at the time of the merger/consolidation.
(3) Merger inducement--A promise by a credit union
to pay to the members of another credit union a sum of money or other
material benefit upon the successful completion of a merger of the
two credit unions.
(4) Substantial--An amount that is large in size, value,
or importance. For purposes of this section, an amount is substantial
if it exceeds $1,000.00 in total.
(b) Two or more credit unions organized under the laws
of this state, another state, or the United States, may merge/consolidate,
in whole or in part, with each other, or into a newly incorporated
credit union to the extent permitted by applicable law, subject to
the requirements of this rule. A credit union may not offer a merger
inducement to another credit union's members as a means of promoting
a merger of the two credit unions.
(c) Notice of Intent to Merge/Consolidate. The credit
unions shall notify the commissioner in writing of their intent to
merge/consolidate within ten days after the credit unions' boards
of directors formally agree in principle to merge/consolidate.
(d) Plan for Merger/Consolidation. Upon approval of
a proposition for merger/consolidation by the boards of directors,
the credit unions must prepare a plan for the proposed merger/consolidation.
The plan shall include:
(1) The terms and conditions of the merger/consolidation
including a detailed description of any substantial remuneration,
such as bonuses, deferred compensation, early payout of retirement
benefits, severance packages, retainers, services agreements, or other
substantial financial rewards or benefits that any board member or
senior management employee of the acquiree credit union may receive
in connection with the merger/consolidation;
(2) the current financial reports of each credit union;
(3) the combined financial reports of the two or more
credit unions;
(4) an analysis of the adequacy of the combined Allowance
for Loan and Lease Losses account;
(5) an explanation of any proposed adjustments to the
members' shares, or provisions for reserves, dividends, or undivided
profits;
(6) a summary of the products and services proposed
to be available to the members of the acquirer credit union, with
an explanation of any changes from the current products and services
provided to the members;
(7) a summary of the advantages and disadvantages of
the merger/consolidation;
(8) the projected location of the main office and any
branch location(s) after the merger/consolidation and whether any
existing office locations will be permanently closed; and
(9) any other items deemed critical to the merger/consolidation
agreement by the boards of directors.
(e) Submission of an Application to Merge/Consolidate
to Department.
(1) An application for approval of the merger/consolidation
will be complete when the following information is submitted to the
commissioner:
(A) the merger/consolidation plan, as described in
this rule;
(B) a copy of the corporate resolution of each board
of directors approving the merger/consolidation plan;
(C) the proposed Notice of Special Meeting of the members;
(D) a copy of the ballot form to be sent to the members;
(E) the current delinquent loan summaries for each
credit union;
(F) a statement as to whether the transaction is subject
to the Hart-Scott Rodino Act premerger notification filing requirements;
and
(G) a request for a waiver of the requirement that
the plan be approved by the members of any of the affected credit
unions, in the event the board(s) seek such a waiver, together with
a statement of the reason(s) for the waiver(s).
(2) If the acquirer credit union is organized under
the laws of another state or of the United States, the commissioner
may accept an application to merge or consolidate that is prescribed
by the state or federal supervisory authority of the acquirer credit
union, provided that the commissioner may require additional information
to determine whether to deny or approve the merger/consolidation.
The application will be deemed complete upon receipt of all information
requested by the commissioner.
(3) Notice of the proposed merger must be published
in the Texas Register and Department
Newsletter as prescribed in §91.104 (relating to Public Notice
and Comment on Certain Applications).
(f) Commissioner Action on the Application.
(1) The commissioner may grant preliminary approval
of an application for merger/consolidation conditioned upon specific
requirements being met, but final approval shall not be granted unless
such conditions have been met within the time specified in the preliminary
approval.
(2) The commissioner shall deny an application for
merger/consolidation if the commissioner finds any of the following:
(A) the financial condition of the acquirer credit
union before the merger/consolidation is such that it will likely
jeopardize the financial stability of the merging credit union or
prejudice the financial interests of the members, beneficiaries or
creditors of either credit union;
(B) the plan includes a change in the products or services
available to members of the acquiree credit union that substantially
harms the financial interests of the members, beneficiaries or creditors
of the acquiree credit union;
(C) the merger/consolidation would probably substantially
lessen the ability of the acquirer credit union to meet the reasonable
needs and convenience of members to be served;
(D) the credit unions do not furnish to the commissioner
all information requested by the commissioner which is material to
the application;
(E) the credit unions fail to obtain any approval required
from a federal or state supervisory authority; or
(F) the merger/consolidation would be contrary to law.
(3) For applications to merge/consolidate in which
the products and services of the acquirer credit union after merger/consolidation
are proposed to be substantially the same as those of the acquiree
and acquirer credit unions, the commissioner will presume that the
merger/consolidation will not significantly change or affect the availability
and adequacy of financial services in the local community.
(g) Procedures for Approval of Merger/Consolidation
Plan by the Members of Each Credit Union.
(1) The credit unions have the option of allowing their
members to vote on the plan in person at a meeting of the members,
by mail ballot, or both. With prior approval of the commissioner,
a credit union may accept member votes by an alternative method that
is reasonably calculated to ensure each member has an opportunity
to vote.
(2) Members shall be given advance notice of the meeting
in accordance with the credit union's bylaws. The notice of the meeting
shall:
(A) specify the purpose of the meeting and state the
date, time, and place of the special meeting;
(B) state the reasons for the proposed merger/consolidation;
(C) contain a summary of the merger plan and state
that any interested person may obtain more detailed information about
the merger from the credit union at its principal place of business,
or by any method approved in advance by the commissioner;
(D) provide the name and location of the acquirer credit
union;
(E) specify the methods permitted for casting votes;
and
(F) if applicable, be accompanied by a mail ballot.
(h) Completion of Merger/Consolidation.
(1) Upon approval of the merger/consolidation plan
by the membership, if applicable, the Certificate of Merger/Consolidation
shall be completed, signed and submitted to the commissioner for final
authority to combine the records. Necessary amendments to the acquirer
credit union's articles of incorporation or bylaws shall also be submitted
at this time.
(2) Upon receipt of the commissioner's written authorization,
the records of the credit unions shall be combined as of the effective
date of the merger/consolidation. The board of the directors of the
acquirer credit union shall certify the completion of the merger/consolidation
to the commissioner within 30 days after the effective date of the
merger/consolidation.
(3) Upon receipt by the commissioner of the completion
of the merger/consolidation certification, any article of incorporation
or bylaw amendments will be approved and the charter of the acquiree
credit union will be canceled.
|
| Source Note: The provisions of this §91.1003 adopted to be effective March 11, 1998, 23 TexReg 4568; amended to be effective November 16, 2005, 30 TexReg 7434; amended to be effective November 11, 2007, 32 TexReg 7924; amended to be effective November 8, 2009, 34 TexReg 7628; amended to be effective November 23, 2017, 42 TexReg 6509; amended to be effective May 31, 2020, 45 TexReg 3437 |
