Kentucky Statutes 286.6-700 – Suspension of credit union operations
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(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 subtitle, 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 suspension 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 union’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.
Effective: July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 742, effective July 15, 2010. — Created
1984 Ky. Acts ch. 202, sec. 1, effective July 13, 1984.
Formerly codified as KRS § 290.700.
Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286, and KRS references within this statute have been adjusted to conform with the 2006 renumbering of that code.
(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.
Terms Used In Kentucky Statutes 286.6-700
- Action: includes all proceedings in any court of this state. See Kentucky Statutes 446.010
- Answer: The formal written statement by a defendant responding to a civil complaint and setting forth the grounds for defense.
- Commissioner: means the commissioner of financial institutions. See Kentucky Statutes 286.6-005
- Credit union: means a cooperative, nonprofit association, incorporated under this subtitle, for the purposes of encouraging thrift among its members, creating a source of credit at a fair and reasonable rate of interest, and providing an opportunity for its members to use and control their own money on a democratic basis in order to improve their economic and social condition. See Kentucky Statutes 286.6-005
- Directors: when applied to corporations, includes managers or trustees. See Kentucky Statutes 446.010
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Registered mail: means any governmental, commercial, or electronic method of delivery that allows a document or package to have:
(a) Its chain of custody recorded in a register to enable its location to be tracked. See Kentucky Statutes 446.010 - Statute: A law passed by a legislature.
(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 suspension 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 union’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.
Effective: July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 742, effective July 15, 2010. — Created
1984 Ky. Acts ch. 202, sec. 1, effective July 13, 1984.
Formerly codified as KRS § 290.700.
Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the Kentucky Financial Services Code, KRS Chapter 286, and KRS references within this statute have been adjusted to conform with the 2006 renumbering of that code.