North Dakota 2025-2026 Regular Session

North Dakota House Bill HB1507 Compare Versions

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1		-	Sixty-ninth Legislative Assembly of North Dakota
2		-	In Regular Session Commencing Tuesday, January 7, 2025
3		-	HOUSE BILL NO. 1507
4		-	(Representative Vollmer)
5		-	AN ACT to create and enact a new chapter to title 6 of the North Dakota Century Code, relating to the
6		-	establishment and organization of cooperative financial institutions; and to amend and reenact
7		-	sections 6-01-02, 6-01-15, 6-01-17.1, 6-02-02, 6-02-03, 6-03-02, 6-03-11, 6-03-13.1, 6-03-34,
8		-	6-05-01, 6-06-35, 6-07.2-09, 6-07.2-19, and 6-08-08.1 of the North Dakota Century Code,
9		-	relating to the application, powers, payment of claims, liquidation, and sale of cooperative
10		-	financial institutions.
	1	+	25.1258.02000
	2	+	Sixty-ninth
	3	+	Legislative Assembly
	4	+	of North Dakota
	5	+	Introduced by
	6	+	Representative Vollmer
	7	+	A BILL for an Act to create and enact a new chapter to title 6 of the North Dakota Century Code,
	8	+	relating to the establishment and organization of cooperative financial institutions; and to amend
	9	+	and reenact sections 6-01-02, 6-01-15, 6-01-17.1, 6-02-02, 6-02-03, 6-03-02, 6-03-11,
	10	+	6-03-13.1, 6-03-34, 6-05-01, 6-06-35, 6-07.2-09, 6-07.2-19, and 6-08-08.1 of the North Dakota
	11	+	Century Code, relating to the application, powers, payment of claims, liquidation, and sale of
	12	+	cooperative financial institutions.
11	13		BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
12		-	SECTION 1. AMENDMENT. Section 6-01-02 of the North Dakota Century Code is amended ~~and~~
13		-	reenacted as follows:
	14	+	SECTION 1. AMENDMENT. Section 6-01-02 of the North Dakota Century Code is amended
	15	+	and reenacted as follows:
14	16		6-01-02. Definitions.
15	17		As used in this title, unless the context or subject matter otherwise requires:
16		-	1."Association", "banking association", or "state banking association" means any corporation
17		-	organized under the laws of this state covering state banking associations, and all
18		-	corporations, limited liability companies, partnerships, firms, or associations whose business
19		-	in whole or in part consists of the taking of money on deposit, except national banks, trust
20		-	companies, and the Bank of North Dakota.
21		-	2."Bank" means any national bank, national banking association, corporation, state bank,
22		-	cooperative financial institution, state banking association, or savings bank, whether organized
23		-	under the laws of this state or of the United States, engaged in the business of banking.
24		-	3."Bank holding company" means bank holding company as defined in 12 U.S.C. 1841(a)(1).
25		-	4."Banking" means the business of receiving deposits, making loans, discounting commercial
26		-	paper, issuing drafts, traveler's checks, and similar instruments, handling and making
27		-	collections, cashing checks and drafts, and buying and selling exchange.
	18	+	1."Association", "banking association", or "state banking association" means any
	19	+	corporation organized under the laws of this state covering state banking associations,
	20	+	and all corporations, limited liability companies, partnerships, firms, or associations
	21	+	whose business in whole or in part consists of the taking of money on deposit, except
	22	+	national banks, trust companies, and the Bank of North Dakota.
	23	+	2."Bank" means any national bank, national banking association, corporation, state
	24	+	bank, cooperative financial institution, state banking association, or savings bank,
	25	+	whether organized under the laws of this state or of the United States, engaged in the
	26	+	business of banking.
	27	+	3."Bank holding company" means bank holding company as defined in 12 U.S.C.
	28	+	1841(a)(1).
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	30	+	ENGROSSED HOUSE BILL NO. 1507
	31	+	FIRST ENGROSSMENT
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	55	+	4."Banking" means the business of receiving deposits, making loans, discounting
	56	+	commercial paper, issuing drafts, traveler's checks, and similar instruments, handling
	57	+	and making collections, cashing checks and drafts, and buying and selling exchange.
28	58		5."Banking department" means the state department of financial institutions.
29		-	6."Banking institution" means any bank, trust company, or bank and trust company organized
30		-	under the laws of this state.
31		-	7."Branch" means a place of business where deposits are received, checks paid, or money lent
32		-	as a result of a bank that was merged into another bank pursuant to an interstate merger.
	59	+	6."Banking institution" means any bank, trust company, or bank and trust company
	60	+	organized under the laws of this state.
	61	+	7."Branch" means a place of business where deposits are received, checks paid, or
	62	+	money lent as a result of a bank that was merged into another bank pursuant to an
	63	+	interstate merger.
33	64		8."Commissioner" means the commissioner of financial institutions.
34		-	9."Cooperative financial institution" means an institution without capital stock organized ~~under~~
35		-	section 10 of this Act and operated for mutual purposes and without profit, and ~~which is~~
36		-	subject by law to supervision and examination by the department and federal ~~authority which~~
37		-	have supervision over such institutions.
38		-	10."Corporate central credit union" means a credit union operated for the primary purpose of
39		-	serving corporate accounts. A credit union is deemed to be a corporate central ~~credit union~~
40		-	when its total dollar amount of outstanding corporate loans plus corporate ~~share and deposit H. B. NO. 1507 - PAGE 2~~
41		-	holdings is equal to or greater than seventy-five percent of its ~~outstanding loans plus share~~
42		-	and deposit holdings.
43		-	10.11."Credit union" means a cooperative, nonprofit association organized for the purposes of
44		-	encouraging thrift among its members, creating a source of credit at a fair and ~~reasonable rate~~
45		-	of interest, and providing an opportunity for its members to improve ~~their economic and social~~
46		-	condition.
	65	+	9."Cooperative financial institution" means an institution without capital stock organized
	66	+	under section 10 of this Act and operated for mutual purposes and without profit, and
	67	+	which is subject by law to supervision and examination by the department and federal
	68	+	authority which have supervision over such institutions.
	69	+	10."Corporate central credit union" means a credit union operated for the primary purpose
	70	+	of serving corporate accounts. A credit union is deemed to be a corporate central
	71	+	credit union when its total dollar amount of outstanding corporate loans plus corporate
	72	+	share and deposit holdings is equal to or greater than seventy-five percent of its
	73	+	outstanding loans plus share and deposit holdings.
	74	+	10.11."Credit union" means a cooperative, nonprofit association organized for the purposes
	75	+	of encouraging thrift among its members, creating a source of credit at a fair and
	76	+	reasonable rate of interest, and providing an opportunity for its members to improve
	77	+	their economic and social condition.
47	78		11.12."Derivative transaction" means derivative transaction as defined in 12 U.S.C. 84(b)(3).
48		-	12.13."Electronic" means relating to technology having electrical, digital, magnetic, wireless, optical,
49		-	electromagnetic, or similar capabilities.
50		-	13.14."Electronic communication" means any form of communication, not directly involving the
51		-	physical transmission of paper that creates a record that may be retained, retrieved, and
52		-	reviewed by a recipient of the communication and may be directly reproduced in paper form
53		-	by the recipient through an automated process.
54		-	14.15."Electronic record" means a record created, generated, sent, communicated, received, or
55		-	stored by electronic means.
56		-	15.16."Electronic signature" means an electronic sound, symbol, or process attached to or logically
57		-	associated with a record and signed or adopted by a person with the intent to sign the record.
58		-	16.17."Financial corporation" means all entities regulated by the department of financial institutions,
59		-	excluding financial institutions and credit unions.
	79	+	12.13."Electronic" means relating to technology having electrical, digital, magnetic, wireless,
	80	+	optical, electromagnetic, or similar capabilities.
	81	+	13.14."Electronic communication" means any form of communication, not directly involving
	82	+	the physical transmission of paper that creates a record that may be retained,
	83	+	retrieved, and reviewed by a recipient of the communication and may be directly
	84	+	reproduced in paper form by the recipient through an automated process.
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	117	+	14.15."Electronic record" means a record created, generated, sent, communicated, received,
	118	+	or stored by electronic means.
	119	+	15.16."Electronic signature" means an electronic sound, symbol, or process attached to or
	120	+	logically associated with a record and signed or adopted by a person with the intent to
	121	+	sign the record.
	122	+	16.17."Financial corporation" means all entities regulated by the department of financial
	123	+	institutions, excluding financial institutions and credit unions.
60	124		17.18."Financial institution" means any bank, industrial loan company, or savings and loan
61	125		association organized under the laws of this state or of the United States.
62		-	18.19."Market value" means the highest price for which property can be sold in the open ~~market by a~~
63		-	willing seller to a willing purchaser, neither acting upon compulsion and ~~both exercising~~
64		-	reasonable judgment.
65		-	19.20."Merger" or "merge" means the merging or consolidation of two or more banks ~~including the~~
66		-	purchase of all or substantially all of the assets and assumption of ~~liabilities of a bank, facility,~~
67		-	or branch.
	126	+	18.19."Market value" means the highest price for which property can be sold in the open
	127	+	market by a willing seller to a willing purchaser, neither acting upon compulsion and
	128	+	both exercising reasonable judgment.
	129	+	19.20."Merger" or "merge" means the merging or consolidation of two or more banks
	130	+	including the purchase of all or substantially all of the assets and assumption of
	131	+	liabilities of a bank, facility, or branch.
68	132		20.21."Mutual investment corporation" or "mutual savings corporation" means a corporation
69		-	organized to engage in the investment or savings business, but having no capital ~~stock or a~~
70		-	nominal capital stock.
	133	+	organized to engage in the investment or savings business, but having no capital
	134	+	stock or a nominal capital stock.
71	135		21.22."National bank" or "national banking association" means an institution chartered by the
72	136		comptroller of the currency under the National Bank Act [12 U.S.C. 24].
73		-	22.23."Record" means information that is inscribed on a tangible medium or that is stored in an
74		-	electronic or other medium and is retrievable in perceivable form.
	137	+	22.23."Record" means information that is inscribed on a tangible medium or that is stored in
	138	+	an electronic or other medium and is retrievable in perceivable form.
75	139		23.24."Technology service provider" includes any person that provides services to a financial
76		-	institution, financial corporation, or credit union, including: core processing; information and
77		-	transaction processing and settlement activities that support banking functions such as
78		-	lending, deposit-taking, funds transfer, fiduciary, or trading activities; internet-related services;
79		-	security monitoring; and system development and maintenance.
80		-	24.25."Tier 1, tier 2, and tier 3 capital" means those terms as set under title 12, Code of Federal
81		-	Regulations, part 325, in effect on August 1, 2011.
82		-	25.26."Trust company" means any corporation formed for the purpose of transacting business as an
83		-	annuity, safe deposit, surety, or trust company. H. B. NO. 1507 - PAGE 3
84		-	SECTION 2. AMENDMENT. Section 6-01-15 of the North Dakota Century Code is amended and
85		-	reenacted as follows:
	140	+	institution, financial corporation, or credit union, including: core processing; information
	141	+	and transaction processing and settlement activities that support banking functions
	142	+	such as lending, deposit-taking, funds transfer, fiduciary, or trading activities;
	143	+	internet-related services; security monitoring; and system development and
	144	+	maintenance.
	145	+	24.25."Tier 1, tier 2, and tier 3 capital" means those terms as set under title 12, Code of
	146	+	Federal Regulations, part 325, in effect on August 1, 2011.
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	179	+	25.26."Trust company" means any corporation formed for the purpose of transacting
	180	+	business as an annuity, safe deposit, surety, or trust company.
	181	+	SECTION 2. AMENDMENT. Section 6-01-15 of the North Dakota Century Code is amended
	182	+	and reenacted as follows:
86	183		6-01-15. Officers and employees to be disinterested.
87		-	1.No officer or employee of this department may have any interest, directly or indirectly, in any
88		-	financial corporation or financial institution within the jurisdiction of the department of financial
89		-	institutions, nor in any corporation or institution engaged wholly or in part in the writing or
90		-	issuing of bonds of or for any such corporation or institution or any officer or employee thereof.
91		-	Provided, however, this prohibition does not apply to membership in a state-chartered credit
92		-	union or savings and loan associationcooperative financial institution.
93		-	2.For purposes of this section, "interest" means ownership of or investment in such corporations
94		-	or institutions.
95		-	SECTION 3. AMENDMENT. Section 6-01-17.1 of the North Dakota Century Code is amended and
96		-	reenacted as follows:
	184	+	1.No officer or employee of this department may have any interest, directly or indirectly,
	185	+	in any financial corporation or financial institution within the jurisdiction of the
	186	+	department of financial institutions, nor in any corporation or institution engaged wholly
	187	+	or in part in the writing or issuing of bonds of or for any such corporation or institution
	188	+	or any officer or employee thereof. Provided, however, this prohibition does not apply
	189	+	to membership in a state-chartered credit union or savings and loan
	190	+	associationcooperative financial institution.
	191	+	2.For purposes of this section, "interest" means ownership of or investment in such
	192	+	corporations or institutions.
	193	+	SECTION 3. AMENDMENT. Section 6-01-17.1 of the North Dakota Century Code is
	194	+	amended and reenacted as follows:
97	195		6-01-17.1. Application fees - Cost of transcript.
98		-	The following fees must accompany an application presented to the state banking board, ~~state~~
99		-	credit union board, or commissioner and must be paid by the commissioner into the ~~financial institutions~~
100		-	regulatory fund:
101		-	1.For a certificate of authority to organize a banking association, a fee of five thousand ~~dollars,~~
102		-	paid by the applicants.
103		-	2.A banking association's application for authority to remove its business to some place ~~within~~
104		-	the state other than the town in which it is presently located and to change its ~~name, a fee of~~
105		-	two thousand five hundred dollars.
	196	+	The following fees must accompany an application presented to the state banking board,
	197	+	state credit union board, or commissioner and must be paid by the commissioner into the
	198	+	financial institutions regulatory fund:
	199	+	1.For a certificate of authority to organize a banking association, a fee of five thousand
	200	+	dollars, paid by the applicants.
	201	+	2.A banking association's application for authority to remove its business to some place
	202	+	within the state other than the town in which it is presently located and to change its
	203	+	name, a fee of two thousand five hundred dollars.
106	204		3.National bank conversion to a state bank, a fee of two thousand five hundred dollars.
107		-	4.Application by two or more banks to merge or consolidate, a fee of one thousand five hundred
108		-	dollars.
109		-	5.Application by a person to sell, dispose, or purchase an association, banking institution, or
110		-	holding company, a fee of five hundred dollars unless a hearing is held before the board in
111		-	which case the fee is two thousand dollars.
112		-	6.A banking association's application to establish and operate a separate facility, a fee of one
113		-	thousand five hundred dollars. A banking institution that discontinues a facility established for
114		-	the purpose of providing educational opportunities to a high school is entitled to a refund of
115		-	any application fee paid.
116		-	7.A banking association's application to establish customer electronic funds transfer centers, a
117		-	fee not to exceed five hundred dollars.
118		-	8.For a certificate of authority to organize an annuity, safe deposit, surety, or trust company, a
119		-	fee of five thousand dollars.
	205	+	4.Application by two or more banks to merge or consolidate, a fee of one thousand five
	206	+	hundred dollars.
	207	+	5.Application by a person to sell, dispose, or purchase an association, banking
	208	+	institution, or holding company, a fee of five hundred dollars unless a hearing is held
	209	+	before the board in which case the fee is two thousand dollars.
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	243	+	6.A banking association's application to establish and operate a separate facility, a fee of
	244	+	one thousand five hundred dollars. A banking institution that discontinues a facility
	245	+	established for the purpose of providing educational opportunities to a high school is
	246	+	entitled to a refund of any application fee paid.
	247	+	7.A banking association's application to establish customer electronic funds transfer
	248	+	centers, a fee not to exceed five hundred dollars.
	249	+	8.For a certificate of authority to organize an annuity, safe deposit, surety, or trust
	250	+	company, a fee of five thousand dollars.
120	251		9.A banking association's application for authority to exercise trust powers, a fee of one
121	252		thousand five hundred dollars.
122		-	10.Application to organize a credit union, a fee of three hundred dollars, paid by the applicants.
123		-	11.Application for a credit union to establish a branch, a fee of three hundred dollars. H. B. NO. 1507 - PAGE 4
124		-	12.Application by a credit union to expand its field of membership, a fee of one hundred fifty
125		-	dollars.
126		-	13.Application by a federal credit union to convert to a state credit union, a fee of three hundred
127		-	dollars.
128		-	14.For a certificate of authority to organize a savings and loan associationcooperative financial
129		-	institution, a fee of five thousand dollars.
130		-	15.A savings and loan association'scooperative financial institution's application to establish and
131		-	operate a branch office, a fee of one thousand five hundred dollars.
132		-	16.A trust company's application or notification to establish an operating subsidiary or branch
133		-	office, a fee of five hundred dollars.
	253	+	10.Application to organize a credit union, a fee of three hundred dollars, paid by the
	254	+	applicants.
	255	+	11.Application for a credit union to establish a branch, a fee of three hundred dollars.
	256	+	12.Application by a credit union to expand its field of membership, a fee of one hundred
	257	+	fifty dollars.
	258	+	13.Application by a federal credit union to convert to a state credit union, a fee of three
	259	+	hundred dollars.
	260	+	14.For a certificate of authority to organize a savings and loan associationcooperative
	261	+	financial institution, a fee of five thousand dollars.
	262	+	15.A savings and loan association'scooperative financial institution's application to
	263	+	establish and operate a branch office, a fee of one thousand five hundred dollars.
	264	+	16.A trust company's application or notification to establish an operating subsidiary or
	265	+	branch office, a fee of five hundred dollars.
134	266		17.Application by two or more credit unions to merge, a fee of three hundred dollars.
135		-	18.A banking institution, credit union, or other financial institution to convert to a cooperative
136		-	financial institution, a fee of five thousand dollars.
137		-	The commissioner may cause a certified transcript to be prepared for any hearing conducted on an
138		-	application. The costs for the original and up to six copies of the transcript must be paid by the
139		-	applicant.
140		-	SECTION 4. AMENDMENT. Section 6-02-02 of the North Dakota Century Code is amended and
141		-	reenacted as follows:
	267	+	18.A banking institution, credit union, or other financial institution to convert to a
	268	+	cooperative financial institution, a fee of five thousand dollars.
	269	+	The commissioner may cause a certified transcript to be prepared for any hearing conducted on
	270	+	an application. The costs for the original and up to six copies of the transcript must be paid by
	271	+	the applicant.
	272	+	SECTION 4. AMENDMENT. Section 6-02-02 of the North Dakota Century Code is amended
	273	+	and reenacted as follows:
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142	307		6-02-02. Banking corporations - Who may form.
143	308		An association for carrying on the business of banking under this title may be formed by any
144		-	number of natural persons, not less than three, at least two-thirds of whom must be residents of ~~this~~
145		-	state. They shall enter into articles of association which must specify in general terms the ~~object for~~
146		-	which the association is formed and which may contain any other provisions, not ~~inconsistent with law,~~
147		-	which the association may see fit to adopt for the regulation of its ~~business and the conduct of its~~
148		-	affairs. These articles must be signed and acknowledged by the ~~persons uniting to form the association~~
149		-	and must be filed in the office of the secretary of state. ~~This section does not apply to a cooperative~~
150		-	financial institution.
151		-	SECTION 5. AMENDMENT. Section 6-02-03 of the North Dakota Century Code is amended ~~and~~
152		-	reenacted as follows:
	309	+	number of natural persons, not less than three, at least two-thirds of whom must be residents of
	310	+	this state. They shall enter into articles of association which must specify in general terms the
	311	+	object for which the association is formed and which may contain any other provisions, not
	312	+	inconsistent with law, which the association may see fit to adopt for the regulation of its
	313	+	business and the conduct of its affairs. These articles must be signed and acknowledged by the
	314	+	persons uniting to form the association and must be filed in the office of the secretary of state.
	315	+	This section does not apply to a cooperative financial institution.
	316	+	SECTION 5. AMENDMENT. Section 6-02-03 of the North Dakota Century Code is amended
	317	+	and reenacted as follows:
153	318		6-02-03. Capital stock, surplus, and federal deposit insurance requirements.
154		-	1.The capital stock of any banking association organized after June 30, 1987, must be not less
155		-	than one hundred thousand dollars. In addition to such capital requirements, there must be
156		-	subscribed and paid in at the time of organization a surplus of not less than fifty thousand
157		-	dollars. This subsection does not apply to cooperative financial institutions.
158		-	2.The state banking board may require such additional capital, surplus, and undivided profits as
159		-	it may determine necessary to properly serve the area and to protect the public interest.
160		-	3.All of the capital stock and surplus of every association must be paid in before it is authorized
161		-	to commence business and evidence of such payment either in actual money or a deposit in a
162		-	previously approved correspondent bank must be furnished to the commissioner before the
163		-	certificate of authority may be delivered to it.
164		-	4.A banking association shall secure federal deposit insurance corporation insurance of deposits
165		-	before it is authorized to commence business. Evidence of securing such insurance must be H. B. NO. 1507 - PAGE 5
166		-	furnished to the commissioner before the certificate of authority may be delivered to the
167		-	banking association.
168		-	SECTION 6. AMENDMENT. Section 6-03-02 of the North Dakota Century Code is amended and
169		-	reenacted as follows:
	319	+	1.The capital stock of any banking association organized after June 30, 1987, must be
	320	+	not less than one hundred thousand dollars. In addition to such capital requirements,
	321	+	there must be subscribed and paid in at the time of organization a surplus of not less
	322	+	than fifty thousand dollars. This subsection does not apply to cooperative financial
	323	+	institutions.
	324	+	2.The state banking board may require such additional capital, surplus, and undivided
	325	+	profits as it may determine necessary to properly serve the area and to protect the
	326	+	public interest.
	327	+	3.All of the capital stock and surplus of every association must be paid in before it is
	328	+	authorized to commence business and evidence of such payment either in actual
	329	+	money or a deposit in a previously approved correspondent bank must be furnished to
	330	+	the commissioner before the certificate of authority may be delivered to it.
	331	+	4.A banking association shall secure federal deposit insurance corporation insurance of
	332	+	deposits before it is authorized to commence business. Evidence of securing such
	333	+	insurance must be furnished to the commissioner before the certificate of authority
	334	+	may be delivered to the banking association.
	335	+	SECTION 6. AMENDMENT. Section 6-03-02 of the North Dakota Century Code is amended
	336	+	and reenacted as follows:
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170	369		6-03-02. Powers.
171		-	After an association has made and filed articles of association and an organization ~~certificate, it~~
172		-	becomes a body corporate, and as such, and in the name designated in the ~~certificate, it, subject to~~
173		-	section 6-03-01, has the power to:
174		-	1.Have a perpetual existence, unless it is sooner dissolved according to the provisions ~~of this~~
175		-	title, or unless its franchise becomes forfeited by a violation of law.
	370	+	After an association has made and filed articles of association and an organization
	371	+	certificate, it becomes a body corporate, and as such, and in the name designated in the
	372	+	certificate, it, subject to section 6-03-01, has the power to:
	373	+	1.Have a perpetual existence, unless it is sooner dissolved according to the provisions
	374	+	of this title, or unless its franchise becomes forfeited by a violation of law.
176	375		2.Make contracts.
177	376		3.Sue and be sued.
178		-	4.Elect or appoint directors, such board to consist of any number of members, not less ~~than~~
179		-	three nor more than twenty-five, at least two-thirds of whom must be citizens of ~~the United~~
180		-	States, and, by such board of directors, to appoint a president, who must ~~be a member of said~~
181		-	board, and such other employees as may be required, to define ~~their duties, to require bonds~~
182		-	of them and fix the penalty thereof, and to dismiss such ~~officers and employees, or any of~~
183		-	them, and appoint others to fill their places. This ~~subsection does not apply to a cooperative~~
184		-	financial institution.
185		-	5.Provide, by its board of directors, bylaws not inconsistent with the laws of this state to ~~regulate~~
186		-	the manner in which its directors and officers must be elected or appointed. ~~Vacancies in the~~
187		-	board of directors, not exceeding one-third of the whole membership ~~thereof in any calendar~~
188		-	year, must be filled by a majority vote of the remaining ~~members. The bylaws must provide a~~
189		-	method for filling vacancies exceeding that ~~number. This subsection does not apply to a~~
190		-	cooperative financial institution.
191		-	6.Provide, by its board of directors, bylaws not inconsistent with the laws of this state to ~~regulate~~
192		-	the manner in which its stock and property must be transferred, its business ~~conducted, and~~
193		-	the privileges granted to it by law exercised and enjoyed. This ~~subsection does not apply to a~~
194		-	cooperative financial institution.
	377	+	4.Elect or appoint directors, such board to consist of any number of members, not less
	378	+	than three nor more than twenty-five, at least two-thirds of whom must be citizens of
	379	+	the United States, and, by such board of directors, to appoint a president, who must
	380	+	be a member of said board, and such other employees as may be required, to define
	381	+	their duties, to require bonds of them and fix the penalty thereof, and to dismiss such
	382	+	officers and employees, or any of them, and appoint others to fill their places. This
	383	+	subsection does not apply to a cooperative financial institution.
	384	+	5.Provide, by its board of directors, bylaws not inconsistent with the laws of this state to
	385	+	regulate the manner in which its directors and officers must be elected or appointed.
	386	+	Vacancies in the board of directors, not exceeding one-third of the whole membership
	387	+	thereof in any calendar year, must be filled by a majority vote of the remaining
	388	+	members. The bylaws must provide a method for filling vacancies exceeding that
	389	+	number. This subsection does not apply to a cooperative financial institution.
	390	+	6.Provide, by its board of directors, bylaws not inconsistent with the laws of this state to
	391	+	regulate the manner in which its stock and property must be transferred, its business
	392	+	conducted, and the privileges granted to it by law exercised and enjoyed. This
	393	+	subsection does not apply to a cooperative financial institution.
195	394		7.Exercise, as determined by the board by order or rule, all the incidental powers as are
196	395		necessary to carry on the business of banking, including discounting and negotiating
197		-	promissory notes, bills of exchange, drafts, and other evidences of debt; receiving deposits;
198		-	buying and selling exchange, coin, and bullion; loaning money upon real or personal security,
199		-	or both; soliciting and receiving deposits in the nature of custodial accounts for the purpose of
200		-	health savings or similar health care cost funding accounts, retirement fund contracts, or
201		-	pension programs, and such custodial accounts are exempt from chapter 6-05; and providing
202		-	services to its customers involving electronic transfer of funds to the same extent that other
203		-	financial institutions chartered and regulated by an agency of the federal government are
204		-	permitted to provide those services within this state. A bank that provides electronic funds
205		-	transfer equipment and service to its customers, at premises separate from its main banking
	396	+	promissory notes, bills of exchange, drafts, and other evidences of debt; receiving
	397	+	deposits; buying and selling exchange, coin, and bullion; loaning money upon real or
	398	+	personal security, or both; soliciting and receiving deposits in the nature of custodial
	399	+	accounts for the purpose of health savings or similar health care cost funding
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	433	+	accounts, retirement fund contracts, or pension programs, and such custodial
	434	+	accounts are exempt from chapter 6-05; and providing services to its customers
	435	+	involving electronic transfer of funds to the same extent that other financial institutions
	436	+	chartered and regulated by an agency of the federal government are permitted to
	437	+	provide those services within this state. A bank that provides electronic funds transfer
	438	+	equipment and service to its customers, at premises separate from its main banking
206	439		house or duly authorized facility approved by the state banking board, must make the
207		-	equipment and service available for use by customers of any other bank upon the request of
208		-	the other bank to share its use and the agreement of the other bank to share pro rata all costs
209		-	incurred in connection with its installation and operation, and the electronic operations are not
210		-	deemed to be the establishment of a branch, nor of a separate facility. The electronic
211		-	operations at premises separate from its banking house or duly authorized facility must be
212		-	considered a customer electronic funds transfer center and may be established subject to
213		-	rules that the state banking board adopts. H. B. NO. 1507 - PAGE 6
	440	+	equipment and service available for use by customers of any other bank upon the
	441	+	request of the other bank to share its use and the agreement of the other bank to
	442	+	share pro rata all costs incurred in connection with its installation and operation, and
	443	+	the electronic operations are not deemed to be the establishment of a branch, nor of a
	444	+	separate facility. The electronic operations at premises separate from its banking
	445	+	house or duly authorized facility must be considered a customer electronic funds
	446	+	transfer center and may be established subject to rules that the state banking board
	447	+	adopts.
214	448		8.Enter into contracts, incur obligations, and generally to perform all acts necessary or
215		-	appropriate to take advantage of any and all memberships, loans, subscriptions, contracts,
216		-	grants, rights, or privileges which may be or become available or may inure to banking
217		-	institutions or to their depositors, creditors, stockholders, conservators, receivers, or
218		-	liquidators under the provisions of the federal Act creating the federal deposit insurance
219		-	corporation or under any other Act or regulation of Congress to aid, regulate, or safeguard
220		-	banking institutions and their depositors, including any amendments thereto or substitution
221		-	therefor, when authorized so to do by its board of directors.
222		-	9.Subscribe for and acquire any stock, debentures, bonds, or other types of securities of the
223		-	federal deposit insurance corporation and to comply with the lawful regulations and
	449	+	appropriate to take advantage of any and all memberships, loans, subscriptions,
	450	+	contracts, grants, rights, or privileges which may be or become available or may inure
	451	+	to banking institutions or to their depositors, creditors, stockholders, conservators,
	452	+	receivers, or liquidators under the provisions of the federal Act creating the federal
	453	+	deposit insurance corporation or under any other Act or regulation of Congress to aid,
	454	+	regulate, or safeguard banking institutions and their depositors, including any
	455	+	amendments thereto or substitution therefor, when authorized so to do by its board of
	456	+	directors.
	457	+	9.Subscribe for and acquire any stock, debentures, bonds, or other types of securities of
	458	+	the federal deposit insurance corporation and to comply with the lawful regulations and
224	459		requirements from time to time issued or made by such corporation.
225	460		10.Take, receive, and hold United States postal savings deposits and to take any action
226	461		necessary to procure the deposit of the same.
227		-	11.Enter into the business of dealing in securities and stock for the purpose of purchasing and
228		-	selling such securities and stock without recourse, solely upon the order, and for the account
229		-	of individual and institutional customers and to provide portfolio investment advisory,
230		-	management, information, forecasting, and research services to such customers in
231		-	combination with or separate from such purchases and sales.
232		-	12.Exercise fiduciary powers upon application as provided under section 6-05-01 as the board
233		-	may prescribe by rule.
234		-	13.Invest all moneys received by it in a trust, in authorized securities, and be responsible to the
235		-	owner or a third-party beneficiary for the validity, regularity, quality, value, and genuineness of
236		-	these investments and securities at the time made and for the safekeeping of these securities
237		-	and the evidences of the securities. When special directions are given in any order, judgment,
238		-	decree, will, or other written instrument as to the particular manner or the particular class or
239		-	kind of securities or property in which any investment may be made, a bank shall follow this
240		-	direction and, in such case, it is not further responsible by reason of the performance of the
241		-	trust. A bank may retain and continue any investment and security or securities coming into its
242		-	possession in any fiduciary capacity. For the faithful discharge of its duties and the discharge
243		-	of its trust, it is entitled to reasonable compensation or an amount as has been or may be
244		-	agreed upon by the parties and all necessary expenses, with legal interest on those amounts.
245		-	The trustee may acquire and retain securities of any open-end or closed-end management
246		-	type investment company or investment trust registered under the Federal Investment
247		-	Company Act of 1940 [Pub. L. 76-686; 54 Stat. 789; 15 U.S.C. 80a-1 - 80a-52]. The fact that
248		-	the banking institution, or an affiliate of the banking institution, is providing services to the
249		-	investment company or trust as investment advisor, sponsor, broker, distributor, custodian,
250		-	transfer agent, registrar, or otherwise and receiving compensation for the services does not
251		-	preclude the trustee from investing in the securities of that investment company or trust. The
252		-	banking institution and trust shall disclose to all current income beneficiaries of the trust the
253		-	rate, formula, and method of the compensation, and the relationship of ownership. No
254		-	compensation or commission paid or agreed to be paid to it for the negotiation of a loan or the
255		-	execution of a trust may be deemed interest within the meaning of the law, nor may any
256		-	excess thereof over the legal rate be deemed usury.
257		-	SECTION 7. AMENDMENT. Section 6-03-11 of the North Dakota Century Code is amended and
258		-	reenacted as follows:
	462	+	11.Enter into the business of dealing in securities and stock for the purpose of purchasing
	463	+	and selling such securities and stock without recourse, solely upon the order, and for
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	497	+	the account of individual and institutional customers and to provide portfolio
	498	+	investment advisory, management, information, forecasting, and research services to
	499	+	such customers in combination with or separate from such purchases and sales.
	500	+	12.Exercise fiduciary powers upon application as provided under section 6-05-01 as the
	501	+	board may prescribe by rule.
	502	+	13.Invest all moneys received by it in a trust, in authorized securities, and be responsible
	503	+	to the owner or a third-party beneficiary for the validity, regularity, quality, value, and
	504	+	genuineness of these investments and securities at the time made and for the
	505	+	safekeeping of these securities and the evidences of the securities. When special
	506	+	directions are given in any order, judgment, decree, will, or other written instrument as
	507	+	to the particular manner or the particular class or kind of securities or property in which
	508	+	any investment may be made, a bank shall follow this direction and, in such case, it is
	509	+	not further responsible by reason of the performance of the trust. A bank may retain
	510	+	and continue any investment and security or securities coming into its possession in
	511	+	any fiduciary capacity. For the faithful discharge of its duties and the discharge of its
	512	+	trust, it is entitled to reasonable compensation or an amount as has been or may be
	513	+	agreed upon by the parties and all necessary expenses, with legal interest on those
	514	+	amounts. The trustee may acquire and retain securities of any open-end or closed-end
	515	+	management type investment company or investment trust registered under the
	516	+	Federal Investment Company Act of 1940 [Pub. L. 76-686; 54 Stat. 789; 15 U.S.C.
	517	+	80a-1 - 80a-52]. The fact that the banking institution, or an affiliate of the banking
	518	+	institution, is providing services to the investment company or trust as investment
	519	+	advisor, sponsor, broker, distributor, custodian, transfer agent, registrar, or otherwise
	520	+	and receiving compensation for the services does not preclude the trustee from
	521	+	investing in the securities of that investment company or trust. The banking institution
	522	+	and trust shall disclose to all current income beneficiaries of the trust the rate, formula,
	523	+	and method of the compensation, and the relationship of ownership. No compensation
	524	+	or commission paid or agreed to be paid to it for the negotiation of a loan or the
	525	+	execution of a trust may be deemed interest within the meaning of the law, nor may
	526	+	any excess thereof over the legal rate be deemed usury.
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	559	+	SECTION 7. AMENDMENT. Section 6-03-11 of the North Dakota Century Code is amended
	560	+	and reenacted as follows:
259	561		6-03-11. Conversion, consolidation, or merger.
260		-	1.Any two or more banking institutions upon making application to the commissioner or ~~the state~~
261		-	banking board may consolidate or merge if authorized by the commissioner ~~or board into one~~
262		-	banking institution under the charter of either existing banking ~~institution on such terms and H. B. NO. 1507 - PAGE 7~~
263		-	conditions as lawfully may be agreed upon by a majority ~~of the board of directors of each~~
264		-	banking institution proposing to consolidate or merge ~~subject to rules adopted by the state~~
265		-	banking board.
266		-	2.Before becoming final, such consolidation or merger must be ratified and confirmed by ~~the~~
267		-	vote:
268		-	a.Vote of the shareholders of each such banking institution owning at least ~~two-thirds of its~~
269		-	capital stock outstanding at a meeting to be held on the call of the ~~directors. Notice of~~
270		-	such meeting and of the purpose thereof must be given to ~~each shareholder of record by~~
271		-	registered or certified mail at least ten days prior to ~~the meeting. The shareholders may~~
272		-	unanimously waive such notice and may ~~consent to such meeting and consolidation or~~
273		-	merger in writing.; or
	562	+	1.Any two or more banking institutions upon making application to the commissioner or
	563	+	the state banking board may consolidate or merge if authorized by the commissioner
	564	+	or board into one banking institution under the charter of either existing banking
	565	+	institution on such terms and conditions as lawfully may be agreed upon by a majority
	566	+	of the board of directors of each banking institution proposing to consolidate or merge
	567	+	subject to rules adopted by the state banking board.
	568	+	2.Before becoming final, such consolidation or merger must be ratified and confirmed by
	569	+	the vote:
	570	+	a.Vote of the shareholders of each such banking institution owning at least
	571	+	two-thirds of its capital stock outstanding at a meeting to be held on the call of the
	572	+	directors. Notice of such meeting and of the purpose thereof must be given to
	573	+	each shareholder of record by registered or certified mail at least ten days prior to
	574	+	the meeting. The shareholders may unanimously waive such notice and may
	575	+	consent to such meeting and consolidation or merger in writing.; or
274	576		b.Vote of the members of a cooperative financial institution.
275		-	(1)The proposition for a merger first must be approved by the board of directors, and
276		-	on a date set for a vote by the members either at a meeting or by written ballot filed
277		-	on or before the date, by a majority of the directors of the organization which seeks
278		-	the merger. Written notice of the proposition and the date set for the vote must be
279		-	delivered in person to each member or mailed to each member at the address
280		-	appearing on the records of the organization. The notice must be mailed between
281		-	seven and thirty days before the date of the merger. Approval of the proposition for
282		-	merger must be made by the affirmative vote of two - thirds of the members
283		-	participating in the meeting.
284		-	(2)Each member of the cooperative financial institution is entitled to one vote during a
285		-	regular or special meeting of the membership. Voting rights for a banking institution
286		-	or financial institution are determined by applicable law.
287		-	(3)At least forty - five days before consideration of a merger, the membership and board
288		-	acting upon the proposed change must be made aware of the merger under
289		-	consideration and day and time of the meeting the change will be acted upon.
290		-	(4)Promptly after the vote, and in no event later than ninety days thereafter, if the
291		-	proposition for merger was approved, the organization seeking the merger shall
292		-	provide the state banking board with the results of the vote, verified by the affidavits
293		-	of the president or vice president and secretary.
294		-	3.The capital stock and surplus of such consolidated banking institution must not be less than
295		-	that required under this title for the organization of a banking institution of the class of the
296		-	largest consolidating banking institution.
297		-	4.Immediately after the consolidation or merger a full report thereof, including a statement of the
298		-	assets and liabilities of the consolidated banking institution, must be made to the
299		-	commissioner by the surviving banking institution.
300		-	5.Any banking institution may without approval by any state authority convert into or merge or
301		-	consolidate with a national banking association as provided by federal law.
302		-	6.A national bank proposing to merge into a state-chartered bank shall grant the commissioner
303		-	discretionary authority to conduct an examination. The commissioner shall set fees for such
304		-	examination at an hourly rate sufficient to cover all reasonable expenses of the department of
305		-	financial institutions associated with the examination. Fees must be collected by the
306		-	commissioner and deposited in the financial institutions regulatory fund.
307		-	SECTION 8. AMENDMENT. Section 6-03-13.1 of the North Dakota Century Code is amended and
308		-	reenacted as follows: H. B. NO. 1507 - PAGE 8
	577	+	(1)The proposition for a merger first must be approved by the board of
	578	+	directors, and on a date set for a vote by the members either at a meeting or
	579	+	by written ballot filed on or before the date, by a majority of the directors of
	580	+	the organization which seeks the merger. Written notice of the proposition
	581	+	and the date set for the vote must be delivered in person to each member or
	582	+	mailed to each member at the address appearing on the records of the
	583	+	organization. The notice must be mailed between seven and thirty days
	584	+	before the date of the merger. Approval of the proposition for merger must
	585	+	be made by the affirmative vote of two - thirds of the members participating in
	586	+	the meeting.
	587	+	(2)Each member of the cooperative financial institution is entitled to one vote
	588	+	during a regular or special meeting of the membership. Voting rights for a
	589	+	banking institution or financial institution are determined by applicable law.
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	623	+	(3)At least forty - five days before consideration of a merger, the membership
	624	+	and board acting upon the proposed change must be made aware of the
	625	+	merger under consideration and day and time of the meeting the change will
	626	+	be acted upon.
	627	+	(4)Promptly after the vote, and in no event later than ninety days thereafter, if
	628	+	the proposition for merger was approved, the organization seeking the
	629	+	merger shall provide the state banking board with the results of the vote,
	630	+	verified by the affidavits of the president or vice president and secretary.
	631	+	3.The capital stock and surplus of such consolidated banking institution must not be less
	632	+	than that required under this title for the organization of a banking institution of the
	633	+	class of the largest consolidating banking institution.
	634	+	4.Immediately after the consolidation or merger a full report thereof, including a
	635	+	statement of the assets and liabilities of the consolidated banking institution, must be
	636	+	made to the commissioner by the surviving banking institution.
	637	+	5.Any banking institution may without approval by any state authority convert into or
	638	+	merge or consolidate with a national banking association as provided by federal law.
	639	+	6.A national bank proposing to merge into a state-chartered bank shall grant the
	640	+	commissioner discretionary authority to conduct an examination. The commissioner
	641	+	shall set fees for such examination at an hourly rate sufficient to cover all reasonable
	642	+	expenses of the department of financial institutions associated with the examination.
	643	+	Fees must be collected by the commissioner and deposited in the financial institutions
	644	+	regulatory fund.
	645	+	SECTION 8. AMENDMENT. Section 6-03-13.1 of the North Dakota Century Code is
	646	+	amended and reenacted as follows:
309	647		6-03-13.1. Separate facilities authorized.
310		-	Upon compliance with section 6-03-13.3, any bank organized under chapter 6-02 or section 10 of
311		-	this Act and under the supervision of the state banking board, and any national bank doing business in
312		-	this state, may maintain and operate separate and apart from its banking house facilities, in addition to
313		-	such service at its main banking house. Any activity incidental to the business of banking may be
314		-	transacted at a separate facility, including receiving deposits of every kind and nature, cashing checks
315		-	or orders to pay, issuing exchange, making loans, renting safe deposit boxes, exercising fiduciary
316		-	powers if authorized by the board, and receiving payments payable at the bank. Whenever any banking
317		-	institution that has been granted approval to establish and maintain a facility deems it advisable to
318		-	discontinue the maintenance of the facility, the banking institution may apply to the commissioner or
319		-	state banking board for cancellation and the commissioner or board may order the cancellation
	648	+	Upon compliance with section 6-03-13.3, any bank organized under chapter 6-02 or
	649	+	section 10 of this Act and under the supervision of the state banking board, and any national
	650	+	bank doing business in this state, may maintain and operate separate and apart from its
	651	+	banking house facilities, in addition to such service at its main banking house. Any activity
	652	+	incidental to the business of banking may be transacted at a separate facility, including
	653	+	receiving deposits of every kind and nature, cashing checks or orders to pay, issuing exchange,
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	687	+	making loans, renting safe deposit boxes, exercising fiduciary powers if authorized by the
	688	+	board, and receiving payments payable at the bank. Whenever any banking institution that has
	689	+	been granted approval to establish and maintain a facility deems it advisable to discontinue the
	690	+	maintenance of the facility, the banking institution may apply to the commissioner or state
	691	+	banking board for cancellation and the commissioner or board may order the cancellation
320	692		approval within the time the board specifies. The banking institution shall provide notice of the
321	693		application as required by the board by rule.
322		-	SECTION 9. AMENDMENT. Section 6-03-34 of the North Dakota Century Code is amended and
323		-	reenacted as follows:
324		-	6-03-34. Surplus fund required - Dividends only out of earnings not required for surplus.
325		-	The board of directors of any association organized under this title may declare and pay dividends
326		-	out of the net profits of the association subject to the limitations of this chapter. EveryExcept for
327		-	cooperative financial institutions, every such association, as its board of directors deems advisable,
328		-	shall ascertain, set apart, and convert into a surplus fund at least fifty percent of its net earnings until
329		-	such surplus fund equals one hundred percent of its common stock, and no dividend may be declared
330		-	upon its stock except from the remaining fifty percent of its net earnings.
331		-	SECTION 10. A new chapter to title 6 of the North Dakota Century Code is created and enacted as
332		-	follows:
	694	+	SECTION 9. AMENDMENT. Section 6-03-34 of the North Dakota Century Code is amended
	695	+	and reenacted as follows:
	696	+	6-03-34. Surplus fund required - Dividends only out of earnings not required for
	697	+	surplus.
	698	+	The board of directors of any association organized under this title may declare and pay
	699	+	dividends out of the net profits of the association subject to the limitations of this chapter.
	700	+	EveryExcept for cooperative financial institutions, every such association, as its board of
	701	+	directors deems advisable, shall ascertain, set apart, and convert into a surplus fund at least
	702	+	fifty percent of its net earnings until such surplus fund equals one hundred percent of its
	703	+	common stock, and no dividend may be declared upon its stock except from the remaining fifty
	704	+	percent of its net earnings.
	705	+	SECTION 10. A new chapter to title 6 of the North Dakota Century Code is created and
	706	+	enacted as follows:
333	707		Definitions.
334	708		1."Converted organization" means the banking institution, credit union, or other financial
335		-	institution previously authorized by the commissioner to engage in the business of banking
336		-	under the laws of this state and has been converted into a cooperative financial institution
337		-	under this chapter.
338		-	2."Member" means a holder of a cooperative financial institution savings, demand, or other
339		-	authorized deposit account.
340		-	3."Originating member" means an individual who seeks to form a cooperative financial institution
341		-	under this chapter.
	709	+	institution previously authorized by the commissioner to engage in the business of
	710	+	banking under the laws of this state and has been converted into a cooperative
	711	+	financial institution under this chapter.
	712	+	2."Member" means a holder of a cooperative financial institution savings, demand, or
	713	+	other authorized deposit account.
	714	+	3."Originating member" means an individual who seeks to form a cooperative financial
	715	+	institution under this chapter.
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342	747		Formation.
343		-	Fifteen or more originating members who intend to associate themselves by written ~~agreement and~~
344		-	a cooperative financial institution may, upon compliance with this title, become a ~~cooperative financial~~
345		-	institution, with all the powers and privileges and subject to the duties, ~~restrictions, and liabilities under~~
346		-	section 6 - 03 - 02.
	748	+	Fifteen or more originating members who intend to associate themselves by written
	749	+	agreement and a cooperative financial institution may, upon compliance with this title, become a
	750	+	cooperative financial institution, with all the powers and privileges and subject to the duties,
	751	+	restrictions, and liabilities under section 6 - 03 - 02.
347	752		Capital structure.
348		-	A cooperative financial institution formed under this chapter shall have a capital structure the state
349		-	banking board or commissioner determines is adequate. The cooperative financial institution shall
350		-	comply with prompt corrective actions requirements of section 6 - 01 - 04.4. A cooperative financial
351		-	institution is not authorized to issue capital stock, common stock, preferred stock, or other forms of
352		-	equity ownership authorized by this title for other types of banking associations. H. B. NO. 1507 - PAGE 9
	753	+	A cooperative financial institution formed under this chapter shall have a capital structure
	754	+	the state banking board or commissioner determines is adequate. The cooperative financial
	755	+	institution shall comply with prompt corrective actions requirements of section 6 - 01 - 04.4. A
	756	+	cooperative financial institution is not authorized to issue capital stock, common stock, preferred
	757	+	stock, or other forms of equity ownership authorized by this title for other types of banking
	758	+	associations.
353	759		Contents of agreement of association.
354		-	1.Before the formation of a cooperative financial institution under this chapter, the originating
355		-	members of the proposed cooperative financial institution shall execute a written agreement of
356		-	association to form a cooperative financial institution. The written agreement of association
357		-	must identify and comply with the capital structure required by the state banking board and
358		-	must specifically state:
359		-	a.That the originating members of the cooperative financial institution intend to associate
360		-	themselves with the intention of forming a cooperative financial institution;
	760	+	1.Before the formation of a cooperative financial institution under this chapter, the
	761	+	originating members of the proposed cooperative financial institution shall execute a
	762	+	written agreement of association to form a cooperative financial institution. The written
	763	+	agreement of association must identify and comply with the capital structure required
	764	+	by the state banking board and must specifically state:
	765	+	a.That the originating members of the cooperative financial institution intend to
	766	+	associate themselves with the intention of forming a cooperative financial
	767	+	institution;
361	768		b.The name of the cooperative financial institution;
362	769		c.The location of the principal office of the cooperative financial institution;
363		-	d.The purposes for which the cooperative financial institution is formed and the ~~nature of~~
364		-	the business the cooperative financial institution is to conduct; and
	770	+	d.The purposes for which the cooperative financial institution is formed and the
	771	+	nature of the business the cooperative financial institution is to conduct; and
365	772		e.The names and addresses of each originating member of the financial institution.
366		-	2.Each originating member shall subscribe to the agreement of association before submission to
367		-	the state banking board.
	773	+	2.Each originating member shall subscribe to the agreement of association before
	774	+	submission to the state banking board.
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368	805		Organization certificate - Contents.
369		-	Before formation of a cooperative financial institution under this chapter, originating members who
370		-	wish to associate themselves in a cooperative financial institution shall sign and execute an
371		-	organization certificate on a form prescribed by the commissioner, which must state:
372		-	1.The name of the cooperative financial institution. The name may not be the name of any other
373		-	bank, credit union, or financial intuition previously incorporated within the this state;
374		-	2.The location of the principal office of the cooperative financial institution at which business will
375		-	be conducted;
	806	+	Before formation of a cooperative financial institution under this chapter, originating
	807	+	members who wish to associate themselves in a cooperative financial institution shall sign and
	808	+	execute an organization certificate on a form prescribed by the commissioner, which must state:
	809	+	1.The name of the cooperative financial institution. The name may not be the name of
	810	+	any other bank, credit union, or financial intuition previously incorporated within the
	811	+	this state;
	812	+	2.The location of the principal office of the cooperative financial institution at which
	813	+	business will be conducted;
376	814		3.The names and places of residence of the originating members; and
377		-	4.The respective dates on which the cooperative financial institution will commence business.
378		-	Acknowledgment of organization certificate - Application for certificate of authority - Notice
379		-	of hearing.
380		-	The organization certificate must be notarized. The authenticated certificate must be transmitted to
381		-	the state banking board with a request for permission to present the certificate to the secretary of state,
382		-	with application for the issuance of a certificate of authority, as well as payment of an application fee.
383		-	The commissioner shall establish the application by rule. After receipt of the proposed organization
384		-	certificate, application, and application fee, the board shall publish the application in the official
385		-	newspaper of the county the cooperative financial institution is proposed to be established. The notice
386		-	must contain a statement of a time and place at which the board will hear the application and must
387		-	specify that any individual objecting the application may appear and show cause why the application
388		-	should not be approved.
	815	+	4.The respective dates on which the cooperative financial institution will commence
	816	+	business.
	817	+	Acknowledgment of organization certificate - Application for certificate of authority -
	818	+	Notice of hearing.
	819	+	The organization certificate must be notarized. The authenticated certificate must be
	820	+	transmitted to the state banking board with a request for permission to present the certificate to
	821	+	the secretary of state, with application for the issuance of a certificate of authority, as well as
	822	+	payment of an application fee. The commissioner shall establish the application by rule. After
	823	+	receipt of the proposed organization certificate, application, and application fee, the board shall
	824	+	publish the application in the official newspaper of the county the cooperative financial institution
	825	+	is proposed to be established. The notice must contain a statement of a time and place at which
	826	+	the board will hear the application and must specify that any individual objecting the application
	827	+	may appear and show cause why the application should not be approved.
389	828		Hearing by board - Conclusions - Management - Confidentiality.
390		-	1.At the hearing, the board shall inquire whether the originating members have the character,
391		-	integrity, reputation, and financial standing shown by a detailed financial statement, to
392		-	demonstrate the establishment of the proposed cooperative financial institution will be
393		-	beneficial to the public welfare of the community where the cooperative financial institution will H. B. NO. 1507 - PAGE 10
394		-	be located. The board shall keep financial statement furnished by the originating members
395		-	confidential.
396		-	2.The board shall inquire into the qualifications of the management of the proposed cooperative
397		-	financial institution, including any experience with financial institutions and other related
398		-	experience. The board shall keep any inquiry into the qualifications of the proposed
399		-	management confidential.
	829	+	1.At the hearing, the board shall inquire whether the originating members have the
	830	+	character, integrity, reputation, and financial standing shown by a detailed financial
	831	+	statement, to demonstrate the establishment of the proposed cooperative financial
	832	+	institution will be beneficial to the public welfare of the community where the
	833	+	cooperative financial institution will be located. The board shall keep financial
	834	+	statement furnished by the originating members confidential.
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	867	+	2.The board shall inquire into the qualifications of the management of the proposed
	868	+	cooperative financial institution, including any experience with financial institutions and
	869	+	other related experience. The board shall keep any inquiry into the qualifications of the
	870	+	proposed management confidential.
400	871		3.The board shall hear any reasons advanced by the originating members as to why the
401	872		members should be permitted to organize the cooperative financial institution.
402		-	4.At the conclusion of the hearing, the board shall make a statement in writing of its conclusions
403		-	and conditions, if any, and if it finds the proposed cooperative financial institution may not be
404		-	permitted to organize, the board shall state the reasons why. If approval is granted, a copy of
405		-	the board's order must be attached to the organization certificate and both must be presented
406		-	to the secretary of state. A determination to approve the organization of the cooperative
407		-	financial institution must be joined by a majority of all the members of the board.
	873	+	4.At the conclusion of the hearing, the board shall make a statement in writing of its
	874	+	conclusions and conditions, if any, and if it finds the proposed cooperative financial
	875	+	institution may not be permitted to organize, the board shall state the reasons why. If
	876	+	approval is granted, a copy of the board's order must be attached to the organization
	877	+	certificate and both must be presented to the secretary of state. A determination to
	878	+	approve the organization of the cooperative financial institution must be joined by a
	879	+	majority of all the members of the board.
408	880		Determination of board - Recording of organization certificate.
409		-	1.If the state banking board votes to approve the application to organize a cooperative ~~financial~~
410		-	institution, the organization certificate and permission of the board must be ~~recorded in the~~
411		-	county where the cooperative financial institution will be established ~~and must be transmitted~~
412		-	to the secretary of state.
	881	+	1.If the state banking board votes to approve the application to organize a cooperative
	882	+	financial institution, the organization certificate and permission of the board must be
	883	+	recorded in the county where the cooperative financial institution will be established
	884	+	and must be transmitted to the secretary of state.
413	885		2.The secretary of state shall certify the facts to the state banking board and record the
414		-	document in the secretary of state's office. The secretary of state shall issue a certificate of
415		-	authority to the cooperative financial institution.
416		-	3.The secretary of state shall send the certificate to the commissioner. The commissioner may
417		-	not issue the certificate until an examination is made and the certificate of the commissioner
418		-	stating the capital structure as required by the state banking board has been acquired, federal
419		-	deposit insurance corporation insurance of deposits has been secured, and all conditions of
420		-	the law have been complied with strictly.
421		-	4.If the determination of the state banking board is against the organization of the cooperative
422		-	financial institution, the organization certificate may not be recorded in the office of recorder
423		-	and may not be accepted by the secretary of state.
	886	+	document in the secretary of state's office. The secretary of state shall issue a
	887	+	certificate of authority to the cooperative financial institution.
	888	+	3.The secretary of state shall send the certificate to the commissioner. The
	889	+	commissioner may not issue the certificate until an examination is made and the
	890	+	certificate of the commissioner stating the capital structure as required by the state
	891	+	banking board has been acquired, federal deposit insurance corporation insurance of
	892	+	deposits has been secured, and all conditions of the law have been complied with
	893	+	strictly.
	894	+	4.If the determination of the state banking board is against the organization of the
	895	+	cooperative financial institution, the organization certificate may not be recorded in the
	896	+	office of recorder and may not be accepted by the secretary of state.
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424	929		Conversion to or from a cooperative financial institution.
425		-	1.Any banking institution, credit union, or financial institution authorized by the commissioner to
426		-	engage in the business of banking under the laws of this state, laws of the United States, or
427		-	laws of another state may be converted into a cooperative financial institution.
428		-	2.A cooperative financial institution may convert to a federal savings association by complying
429		-	with the following requirements:
430		-	a.The proposition for conversion must be approved by a majority of the directors of the
431		-	organization that seeks conversion. If approved by a majority of the directors, the
432		-	directors shall set a date for a vote by the members either at a meeting or by written
433		-	ballot to be filed on or before the date. Written notice of the proposition and the date set
434		-	for the vote must be delivered in person to each member or mailed to each member at
435		-	the address for the member appearing on the records of the organization, between seven
436		-	and thirty days before the date. Conversion must be approved by two - thirds of the
437		-	members participating in the vote. H. B. NO. 1507 - PAGE 11
	930	+	1.Any banking institution, credit union, or financial institution authorized by the
	931	+	commissioner to engage in the business of banking under the laws of this state, laws
	932	+	of the United States, or laws another state may be converted into a cooperative
	933	+	financial institution.
	934	+	2.A cooperative financial institution may convert to a federal savings association by
	935	+	complying with the following requirements:
	936	+	a.The proposition for conversion must be approved by a majority of the directors of
	937	+	the organization that seeks conversion. If approved by a majority of the directors,
	938	+	the directors shall set a date for a vote by the members either at a meeting or by
	939	+	written ballot to be filed on or before the date. Written notice of the proposition
	940	+	and the date set for the vote must be delivered in person to each member or
	941	+	mailed to each member at the address for the member appearing on the records
	942	+	of the organization, between seven and thirty days before the date. Conversion
	943	+	must be approved by two - thirds of the members participating in the vote.
438	944		b.Each member of the credit union is entitled to one vote during regular or special
439	945		meetings of the membership.
440	946		c.The voting rights for a banking institution or financial institution are determined by
441	947		applicable law.
442		-	d.Forty - five days before consideration of a conversion, the membership or board ~~acting on~~
443		-	the proposed change must be notified of the bylaw change under ~~consideration and of~~
444		-	~~the~~ date and time of the meeting the change will be acted on.
445		-	e.Promptly after the vote is taken, but no more than ninety days after, if the ~~proposition for~~
446		-	conversion was approved, the organization seeking conversion ~~shall provide the state~~
447		-	banking board with the results of the vote, verified by the ~~affidavits of the president or~~
448		-	vice president and secretary.
	948	+	d.Forty - five days before consideration of a conversion, the membership or board
	949	+	acting on the proposed change must be notified of the bylaw change under
	950	+	consideration and of date and time of the meeting the change will be acted on.
	951	+	e.Promptly after the vote is taken, but no more than ninety days after, if the
	952	+	proposition for conversion was approved, the organization seeking conversion
	953	+	shall provide the state banking board with the results of the vote, verified by the
	954	+	affidavits of the president or vice president and secretary.
449	955		f.A cooperative financial institution converting to a federal savings association shall
450		-	provide notice of completion of subdivisions a, b, c, d and e, and may not be subject to
451		-	any other provision of this chapter. The converted cooperative financial institution shall
452		-	provide notice to the state banking board upon commencement of operations as a
453		-	federal savings association, at which time the state charter must be terminated.
454		-	3.If a cooperative financial institution converts to a state-chartered credit union, the institution
455		-	shall:
	956	+	provide notice of completion of subdivisions a, b, c, d and e, and may not be
	957	+	subject to any other provision of this chapter. The converted cooperative financial
	958	+	institution shall provide notice to the state banking board upon commencement of
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	991	+	operations as a federal savings association, at which time the state charter must
	992	+	be terminated.
	993	+	3.If a cooperative financial institution converts to a state-chartered credit union, the
	994	+	institution shall:
456	995		a.Obtain federal deposit insurance.
457		-	b.File with the commissioner an organization certificate as required in section 6 - 06 - 02 and
458		-	all other documentation necessary as determined by the commissioner.
	996	+	b.File with the commissioner an organization certificate as required in section
	997	+	6 - 06 - 02 and all other documentation necessary as determined by the
	998	+	commissioner.
459	999		c.Obtain approval from the state credit union board.
460	1000		Application for conversion.
461		-	1.A banking institution, credit union, or financial institution may be converted to a ~~cooperative~~
462		-	financial institution under this chapter through submission of an ~~application, which must~~
463		-	include:
464		-	a.A statement of the results of the vote to approve the conversion, along with ~~affidavits of~~
465		-	the president or vice president and secretary;
466		-	b.A completed form, prescribed by the commissioner, requesting an amendment to ~~the~~
467		-	organization certificate;
	1001	+	1.A banking institution, credit union, or financial institution may be converted to a
	1002	+	cooperative financial institution under this chapter through submission of an
	1003	+	application, which must include:
	1004	+	a.A statement of the results of the vote to approve the conversion, along with
	1005	+	affidavits of the president or vice president and secretary;
	1006	+	b.A completed form, prescribed by the commissioner, requesting an amendment to
	1007	+	the organization certificate;
468	1008		c.A copy of the executed bylaws to establish the cooperative financial institution;
469	1009		d.An application fee, as established by the commissioner by rule; and
470		-	e.An affirmation from the organization granting discretionary authority to the commissioner
471		-	to conduct an examination before the conversion date.
472		-	2.The commissioner shall set fees for an examination at an hourly rate sufficient to cover all
473		-	reasonable expenses of the department associated with the examination. Fees must be
474		-	collected by the commissioner, transferred to the state treasurer, and deposited in the financial
475		-	institution regulatory fund.
476		-	3.When the commissioner determines all requirements have been met, the commissioner shall
477		-	notify the applicant and the state banking board. The board shall instruct the secretary of state
478		-	to issue an amended organization certificate for the converted organization to operate as a
479		-	cooperative financial institution. After issuance of the amended organization certificate, the H. B. NO. 1507 - PAGE 12
480		-	organization becomes a cooperative financial institution and ceases to operate as originally
481		-	organized. The cooperative financial institution is vested with all assets of the prior
482		-	organization and is responsible for all of the obligations of the converted organization to the
483		-	same extent as though the conversion had not taken place.
	1010	+	e.An affirmation from the organization granting discretionary authority to the
	1011	+	commissioner to conduct an examination before the conversion date.
	1012	+	2.The commissioner shall set fees for an examination at an hourly rate sufficient to
	1013	+	cover all reasonable expenses of the department associated with the examination.
	1014	+	Fees must be collected by the commissioner, transferred to the state treasurer, and
	1015	+	deposited in the financial institution regulatory fund.
	1016	+	3.When the commissioner determines all requirements have been met, the
	1017	+	commissioner shall notify the applicant and the state banking board. The board shall
	1018	+	instruct the secretary of state to issue an amended organization certificate for the
	1019	+	converted organization to operate as a cooperative financial institution. After issuance
	1020	+	of the amended organization certificate, the organization becomes a cooperative
	1021	+	financial institution and ceases to operate as originally organized. The cooperative
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	1055	+	financial institution is vested with all assets of the prior organization and is responsible
	1056	+	for all of the obligations of the converted organization to the same extent as though
	1057	+	the conversion had not taken place.
484	1058		Benefit to directors or management.
485		-	1.A director or senior management official of a converted organization may not receive ~~any~~
486		-	economic benefit in connection with a conversion of the converted organization ~~other than~~
487		-	reasonable director fees, compensation, and other benefits paid to the ~~directors or senior~~
488		-	management officials in the ordinary course of business.
489		-	2.For purposes of this section "senior management official" means a chief executive ~~officer, an~~
490		-	assistant chief executive officer, a chief financial officer, and any other ~~senior executive officer~~
491		-	as may be defined by the state bank board.
	1059	+	1.A director or senior management official of a converted organization may not receive
	1060	+	any economic benefit in connection with a conversion of the converted organization
	1061	+	other than reasonable director fees, compensation, and other benefits paid to the
	1062	+	directors or senior management officials in the ordinary course of business.
	1063	+	2.For purposes of this section "senior management official" means a chief executive
	1064	+	officer, an assistant chief executive officer, a chief financial officer, and any other
	1065	+	senior executive officer as may be defined by the state bank board.
492	1066		Adoption of rules.
493		-	The commissioner may adopt rules necessary to carry out the conversion of a banking institution,
494		-	credit union, or other financial institution to or from a cooperative financial institution under this chapter.
	1067	+	The commissioner may adopt rules necessary to carry out the conversion of a banking
	1068	+	institution, credit union, or other financial institution to or from a cooperative financial institution
	1069	+	under this chapter.
495	1070		Review by commissioner.
496		-	The commissioner shall review the process for the conversion member vote and procedures
497		-	applicable to the member vote. The commissioner shall report the commissioner's findings to the state
498		-	banking board. If the commissioner or the state banking board disapproves of the methods by which the
499		-	conversion member vote was taken or procedures applicable to the member vote, the member vote
500		-	must be retaken as directed by the commissioner or the state banking board.
	1071	+	The commissioner shall review the process for the conversion member vote and
	1072	+	procedures applicable to the member vote. The commissioner shall report the commissioner's
	1073	+	findings to the state banking board. If the commissioner or the state banking board disapproves
	1074	+	of the methods by which the conversion member vote was taken or procedures applicable to
	1075	+	the member vote, the member vote must be retaken as directed by the commissioner or the
	1076	+	state banking board.
501	1077		Membership, voting, meetings, and bylaws.
502		-	1.Each member of the cooperative financial institution is entitled to one vote during ~~regular or~~
503		-	special meetings of the membership.
	1078	+	1.Each member of the cooperative financial institution is entitled to one vote during
	1079	+	regular or special meetings of the membership.
504	1080		2.Voting may be conducted in - person or digital as outlined in the cooperative financial
505		-	institution's bylaws. Proxy voting is permitted as authorized in the bylaws. A quorum for a
506		-	meeting must be defined in the bylaws.
507		-	3.Changes to a cooperative financial institution's charter or bylaws require a majority vote of the
508		-	membership at an annual or special membership meeting or a two - thirds majority vote of the
509		-	board of directors. Fifteen days before consideration of a bylaw change, the membership or
510		-	board acting upon the proposed change must be made aware of the bylaw change under
511		-	consideration and the day and time of the meeting the change will be acted upon. No
512		-	amendment to the bylaws are effective until reviewed for appropriateness and compliance with
513		-	applicable law and approved by the state banking board.
514		-	4.A cooperative financial institution shall conduct at least one meeting of the membership
515		-	annually. Meetings:
516		-	a.Must be noticed at least fifteen days before the meeting date and include the time, place,
517		-	and agenda for any items considered at the meeting.
	1081	+	institution's bylaws. Proxy voting is permitted as authorized in the bylaws. A quorum
	1082	+	for a meeting must be defined in the bylaws.
	1083	+	3.Changes to a cooperative financial institution's charter or bylaws require a majority
	1084	+	vote of the membership at an annual or special membership meeting or a two - thirds
	1085	+	majority vote of the board of directors. Fifteen days before consideration of a bylaw
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	1119	+	change, the membership or board acting upon the proposed change must be made
	1120	+	aware of the bylaw change under consideration and day and time of the meeting the
	1121	+	change will be acted upon. No amendment to the bylaws are effective until reviewed
	1122	+	for appropriateness and compliance with applicable law and approved by the state
	1123	+	banking board.
	1124	+	4.A cooperative financial institution shall conduct at least one meeting of the
	1125	+	membership annually. Meetings:
	1126	+	a.Must be noticed at least fifteen days before the meeting date and include the
	1127	+	time, place, and agenda for any items considered at the meeting.
518	1128		b.May be conducted virtually if permitted within the bylaws.
519	1129		5.At the annual meeting the membership shall:
520		-	a.Fill any vacancies on the board of directors as outlined in the bylaws; and ~~H. B. NO. 1507 - PAGE 13~~
	1130	+	a.Fill any vacancies on the board of directors as outlined in the bylaws; and
521	1131		b.Review the financial conditions of the cooperative financial institution, financial
522		-	performance since the prior annual meeting, and the projection for the upcoming year.
523		-	6.Special meetings of the membership may be called by the board of directors as outlined in the
	1132	+	performance since the prior annual meeting, and the projection for the upcoming
	1133	+	year.
	1134	+	6.Special meetings of the membership may be called by the board of directors as
	1135	+	outlined in the bylaws.
	1136	+	7.The board of directors:
	1137	+	a.May exercise powers of the cooperative financial institution not expressly
	1138	+	reserved for the members.
	1139	+	b.May not be fewer than five or more than fifteen members as outlined in the
524	1140		bylaws.
525		-	7.The board of directors:
526		-	a.May exercise powers of the cooperative financial institution not expressly reserved for
527		-	the members.
528		-	b.May not be fewer than five or more than fifteen members as outlined in the bylaws.
529		-	c.Must be elected to terms of one to three years and until their successors are elected, and
530		-	shall serve staggered terms with approximately one - third of the board positions up for
531		-	consideration at any given annual meeting, as outlined in the bylaws.
	1141	+	c.Must be elected to terms of one to three years and until their successors are
	1142	+	elected, and shall serve staggered terms with approximately one - third of the
	1143	+	board positions up for consideration at any given annual meeting, as outlined in
	1144	+	the bylaws.
532	1145		d.Must be elected from the membership of the cooperative financial institution, and
533		-	nomination shall be made of any member in good standing and following a nomination
534		-	process as outlined in the bylaws.
535		-	e.Must set the time and place of meetings as outlined in the bylaws, with a minimum of
536		-	twenty - four hours' notice required unless waived by all members of the board.
537		-	f.Shall elect from among the elected board members, officers, including the positions of
538		-	chair, vice chair, treasurer, and recorder, with duties and responsibilities as outlined in the
539		-	bylaws.
540		-	g.Must be independent and the majority of board of directors may not be employees of the
541		-	cooperative financial institution.
	1146	+	nomination shall be made of any member in good standing and following a
	1147	+	nomination process as outlined in the bylaws.
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	1179	+	e.Must set the time and place of meetings as outlined in the bylaws, with a
	1180	+	minimum of twenty - four hours' notice required unless waived by all members of
	1181	+	the board.
	1182	+	f.Shall elect from among the elected board members, officers, including the
	1183	+	positions of chair, vice chair, treasurer, and recorder, with duties and
	1184	+	responsibilities as outlined in the bylaws.
	1185	+	g.Must be independent and the majority of board of directors may not be
	1186	+	employees of the cooperative financial institution.
542	1187		h.Must be made up of at least two members with appropriate banking experience.
543		-	i.Must be made up of at least two-thirds members who are both citizens of the ~~United~~
544		-	States and North Dakota residents.
	1188	+	i.Must be made up of at least two-thirds members who are both citizens of the
	1189	+	United States and North Dakota residents.
545	1190		j.May remove a board member as outlined in the bylaws.
546		-	8.The board of directors may terminate membership in a cooperative financial institution ~~for~~
547		-	cause as outlined in the bylaws.
548		-	SECTION 11. AMENDMENT. Section 6-05-01 of the North Dakota Century Code is ~~amended and~~
549		-	reenacted as follows:
	1191	+	8.The board of directors may terminate membership in a cooperative financial institution
	1192	+	for cause as outlined in the bylaws.
	1193	+	SECTION 11. AMENDMENT. Section 6-05-01 of the North Dakota Century Code is
	1194	+	amended and reenacted as follows:
550	1195		6-05-01. Who may form - Corporation has perpetual existence.
551		-	Any number of persons, not less than nine, at least three of whom must be residents of this state,
552		-	may associate themselves and form a corporation for the purpose of transacting business as an
553		-	annuity, safe deposit, and trust company. Its existence shall be perpetual.
554		-	At the time and place stated, and through any sources of information at its command, the board
555		-	shall examine and consider all relevant factors, including whether the place where such company is
556		-	proposed to be located is in need of a further annuity, safe deposit, and trust company, whether the
557		-	proposed institution is adapted to the filling of such need, and whether the proposed incorporators are
558		-	possessed of such character, integrity, reputation, and financial standing as shown by a detailed
559		-	financial statement to be furnished by them, that their connection with the company will be beneficial to
560		-	the public welfare of the community in which such company is proposed to be established. The board
561		-	shall hear any reasons advanced by the applicants why they should be permitted to organize the
562		-	proposed institution and any reasons advanced by any person why such institution should not be H. B. NO. 1507 - PAGE 14
563		-	permitted to be organized. At the termination of such hearing, the board shall make a brief statement in
564		-	writing of its conclusions, and if it finds that the proposed institution should not be permitted to organize,
565		-	it shall state briefly the reasons why. A copy of such conclusions either shall be endorsed upon or
566		-	attached to the organization certificate, together with the refusal or grant of permission to the proposed
567		-	incorporators to present the said organization certificate to the secretary of state. A determination in
568		-	favor of such organization must be joined in by a majority of the members of the board.
569		-	Any banking association organized under chapter 6-02 or section 10 of this Act may apply to the
570		-	board for an order authorizing the applicant to exercise fiduciary powers. If the determination of the
571		-	board is in favor of the applicant, the board shall make its order authorizing the applicant to engage in
572		-	the business of a trust company upon its showing full compliance with sections 6-05-03, 6-05-04, and
573		-	6-05-05 except the capital stock of the banking association shall not be required to be divided in shares
574		-	of one hundred dollars each as provided by section 6-05-03. Sections 6-05-06 and 6-05-07 are not
575		-	applicable to banking associations granted authority to engage in the business of a trust company by
576		-	the board. Thereafter, such banking association must be subject to the jurisdiction of the board as to its
577		-	trust company operations the same as trust companies organized under chapter 6-05.
	1196	+	Any number of persons, not less than nine, at least three of whom must be residents of this
	1197	+	state, may associate themselves and form a corporation for the purpose of transacting business
	1198	+	as an annuity, safe deposit, and trust company. Its existence shall be perpetual.
	1199	+	At the time and place stated, and through any sources of information at its command, the
	1200	+	board shall examine and consider all relevant factors, including whether the place where such
	1201	+	company is proposed to be located is in need of a further annuity, safe deposit, and trust
	1202	+	company, whether the proposed institution is adapted to the filling of such need, and whether
	1203	+	the proposed incorporators are possessed of such character, integrity, reputation, and financial
	1204	+	standing as shown by a detailed financial statement to be furnished by them, that their
	1205	+	connection with the company will be beneficial to the public welfare of the community in which
	1206	+	such company is proposed to be established. The board shall hear any reasons advanced by
	1207	+	the applicants why they should be permitted to organize the proposed institution and any
	1208	+	reasons advanced by any person why such institution should not be permitted to be organized.
	1209	+	At the termination of such hearing, the board shall make a brief statement in writing of its
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	1243	+	conclusions, and if it finds that the proposed institution should not be permitted to organize, it
	1244	+	shall state briefly the reasons why. A copy of such conclusions either shall be endorsed upon or
	1245	+	attached to the organization certificate, together with the refusal or grant of permission to the
	1246	+	proposed incorporators to present the said organization certificate to the secretary of state. A
	1247	+	determination in favor of such organization must be joined in by a majority of the members of
	1248	+	the board.
	1249	+	Any banking association organized under chapter 6-02 or section 10 of this Act may apply
	1250	+	to the board for an order authorizing the applicant to exercise fiduciary powers. If the
	1251	+	determination of the board is in favor of the applicant, the board shall make its order authorizing
	1252	+	the applicant to engage in the business of a trust company upon its showing full compliance
	1253	+	with sections 6-05-03, 6-05-04, and 6-05-05 except the capital stock of the banking association
	1254	+	shall not be required to be divided in shares of one hundred dollars each as provided by section
	1255	+	6-05-03. Sections 6-05-06 and 6-05-07 are not applicable to banking associations granted
	1256	+	authority to engage in the business of a trust company by the board. Thereafter, such banking
	1257	+	association must be subject to the jurisdiction of the board as to its trust company operations
	1258	+	the same as trust companies organized under chapter 6-05.
578	1259		Any corporation organized and authorized to transact the business of fidelity insurance and
579		-	corporate suretyship prior to July 1, 1983, pursuant to the former sections 6-05-08 and 6-05-19 through
580		-	6-05-24 and sections 6-05-30 through 6-05-33 may continue to operate under the provisions of those
581		-	sections as they existed on June 30, 1983.
582		-	SECTION 12. AMENDMENT. Section 6-06-35 of the North Dakota Century Code is amended and
583		-	reenacted as follows:
584		-	6-06-35. Conversion from state to federal credit union and from federal to state credit union
585		-	and from state credit union to building and loan associationa cooperative financial institution.
586		-	1.A state credit union may be converted into a federal credit union under the laws of the United
587		-	States by complying with the following requirements:
588		-	a.The proposition for such conversion must first be approved, and a date set for a vote
589		-	thereon by the members either at a meeting to be held on such date or by written ballot
590		-	to be filed on or before such date, by a majority of the directors of the state credit union.
591		-	Written notice of the proposition and of the date set for the vote must then be delivered in
592		-	person to each member or mailed to each member at the address for such member
593		-	appearing on the records of the credit union, not more than thirty nor less than seven
594		-	days prior to such date. Approval of the proposition for conversion must be by the
595		-	affirmative vote of two-thirds of the members present at the meeting.
596		-	b.A statement of the results of the vote, verified by the affidavits of the president or vice
597		-	president and the secretary, must be filed with the state credit union board within ten
598		-	days after the vote is taken.
599		-	c.Promptly after the vote is taken and in no event later than ninety days thereafter, if the
600		-	proposition for conversion was approved by such vote, the credit union shall take such
601		-	action as may be necessary under the applicable federal law to make it a federal credit
602		-	union, and within ten days after receipt of the federal credit union charter there must be
603		-	filed with the state credit union board a copy of the charter thus issued. Upon such filing,
604		-	the credit union must cease to be a state credit union.
605		-	d.Upon ceasing to be a state credit union, such credit union is no longer subject to any of
606		-	the provisions of the North Dakota credit union law. The successor federal credit union is
607		-	vested with all of the assets and shall continue to be responsible for all of the obligations
608		-	of the state credit union to the same extent as though the conversion had not taken
609		-	place. H. B. NO. 1507 - PAGE 15
610		-	2.a.A federal credit union, organized under the laws of the United States may be converted
611		-	into a state credit union by:
612		-	(1)Complying with all federal requirements requisite to enabling it to convert to a state
613		-	credit union or to cease being a federal credit union;
614		-	(2)Filing with the state credit union board proof of such compliance, satisfactory to the
615		-	commissioner;
	1260	+	corporate suretyship prior to July 1, 1983, pursuant to the former sections 6-05-08 and 6-05-19
	1261	+	through 6-05-24 and sections 6-05-30 through 6-05-33 may continue to operate under the
	1262	+	provisions of those sections as they existed on June 30, 1983.
	1263	+	SECTION 12. AMENDMENT. Section 6-06-35 of the North Dakota Century Code is
	1264	+	amended and reenacted as follows:
	1265	+	6-06-35. Conversion from state to federal credit union and from federal to state credit
	1266	+	union and from state credit union to building and loan associationa cooperative financial
	1267	+	institution.
	1268	+	1.A state credit union may be converted into a federal credit union under the laws of the
	1269	+	United States by complying with the following requirements:
	1270	+	a.The proposition for such conversion must first be approved, and a date set for a
	1271	+	vote thereon by the members either at a meeting to be held on such date or by
	1272	+	written ballot to be filed on or before such date, by a majority of the directors of
	1273	+	the state credit union. Written notice of the proposition and of the date set for the
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	1307	+	vote must then be delivered in person to each member or mailed to each
	1308	+	member at the address for such member appearing on the records of the credit
	1309	+	union, not more than thirty nor less than seven days prior to such date. Approval
	1310	+	of the proposition for conversion must be by the affirmative vote of two-thirds of
	1311	+	the members present at the meeting.
	1312	+	b.A statement of the results of the vote, verified by the affidavits of the president or
	1313	+	vice president and the secretary, must be filed with the state credit union board
	1314	+	within ten days after the vote is taken.
	1315	+	c.Promptly after the vote is taken and in no event later than ninety days thereafter,
	1316	+	if the proposition for conversion was approved by such vote, the credit union shall
	1317	+	take such action as may be necessary under the applicable federal law to make it
	1318	+	a federal credit union, and within ten days after receipt of the federal credit union
	1319	+	charter there must be filed with the state credit union board a copy of the charter
	1320	+	thus issued. Upon such filing, the credit union must cease to be a state credit
	1321	+	union.
	1322	+	d.Upon ceasing to be a state credit union, such credit union is no longer subject to
	1323	+	any of the provisions of the North Dakota credit union law. The successor federal
	1324	+	credit union is vested with all of the assets and shall continue to be responsible
	1325	+	for all of the obligations of the state credit union to the same extent as though the
	1326	+	conversion had not taken place.
	1327	+	2.a.A federal credit union, organized under the laws of the United States may be
	1328	+	converted into a state credit union by:
	1329	+	(1)Complying with all federal requirements requisite to enabling it to convert to
	1330	+	a state credit union or to cease being a federal credit union;
	1331	+	(2)Filing with the state credit union board proof of such compliance,
	1332	+	satisfactory to the commissioner;
616	1333		(3)Filing with the commissioner an organization certificate and bylaws, both in
617	1334		triplicate, as required by section 6-06-02; and
618		-	(4)Granting discretionary authority to the commissioner to conduct an examination
619		-	prior to the conversion date.
620		-	The commissioner shall set fees for such examination at an hourly rate sufficient to cover
621		-	all reasonable expenses of the department of financial institutions associated with the
622		-	examination. Fees must be collected by the commissioner, transferred to the state
623		-	treasurer, and deposited in the financial institutions regulatory fund.
624		-	b.When the commissioner has been satisfied that all of such requirements and all other
625		-	requirements of the North Dakota law have been complied with, the commissioner shall
626		-	notify the applicants and the state credit union board of that fact, and the board shall
627		-	instruct the secretary of state to issue a charter in accordance with section 6-06-02. Upon
628		-	issuance of the charter, the federal credit union shall become a state credit union and
629		-	ceases to be a federal credit union. The state credit union is vested with all of the assets
630		-	and shall continue to be responsible for all of the obligations of the federal credit union to
631		-	the same extent as though the conversion had not taken place.
632		-	3.After July 31, 2009, a state credit union may convert to a building and loan association by
633		-	complying with the following requirements:
634		-	a.The proposal for a conversion first must be approved and a date set for a vote on the
635		-	proposal by the members either at a meeting to be held on such date or by written ballot
636		-	to be filed on or before such date by a majority of the directors of the credit union.
637		-	Approval of the proposal for the conversion must be by the affirmative vote of two-thirds
638		-	of the members voting.
639		-	b.A state credit union that proposes to convert to a building and loan association shall
640		-	submit notice to each of the credit union's members who are eligible to vote on the matter
641		-	of the credit union's intent to convert:
	1335	+	(4)Granting discretionary authority to the commissioner to conduct an
	1336	+	examination prior to the conversion date.
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	1369	+	The commissioner shall set fees for such examination at an hourly rate sufficient
	1370	+	to cover all reasonable expenses of the department of financial institutions
	1371	+	associated with the examination. Fees must be collected by the commissioner,
	1372	+	transferred to the state treasurer, and deposited in the financial institutions
	1373	+	regulatory fund.
	1374	+	b.When the commissioner has been satisfied that all of such requirements and all
	1375	+	other requirements of the North Dakota law have been complied with, the
	1376	+	commissioner shall notify the applicants and the state credit union board of that
	1377	+	fact, and the board shall instruct the secretary of state to issue a charter in
	1378	+	accordance with section 6-06-02. Upon issuance of the charter, the federal credit
	1379	+	union shall become a state credit union and ceases to be a federal credit union.
	1380	+	The state credit union is vested with all of the assets and shall continue to be
	1381	+	responsible for all of the obligations of the federal credit union to the same extent
	1382	+	as though the conversion had not taken place.
	1383	+	3.After July 31, 2009, a state credit union may convert to a building and loan association
	1384	+	by complying with the following requirements:
	1385	+	a.The proposal for a conversion first must be approved and a date set for a vote on
	1386	+	the proposal by the members either at a meeting to be held on such date or by
	1387	+	written ballot to be filed on or before such date by a majority of the directors of
	1388	+	the credit union. Approval of the proposal for the conversion must be by the
	1389	+	affirmative vote of two-thirds of the members voting.
	1390	+	b.A state credit union that proposes to convert to a building and loan association
	1391	+	shall submit notice to each of the credit union's members who are eligible to vote
	1392	+	on the matter of the credit union's intent to convert:
642	1393		(1)Ninety days before the date of the member vote on the conversion;
643	1394		(2)Sixty days before the date of the member vote on the conversion; and
644	1395		(3)Thirty days before the date of the member vote on the conversion.
645		-	c.A state credit union that proposes to convert to a building and loan association shall
646		-	submit a notice to the state credit union board of the credit union's intent to convert at
647		-	least ninety days before the date of the completion of the conversion.
648		-	d.Upon completion of a conversion, the state credit union is no longer subject to any of the
649		-	provisions of this chapter.
650		-	e.A director or senior management official of a state credit union may not receive any
651		-	economic benefit in connection with a conversion of the state credit union other than
652		-	reasonable director fees and reasonable compensation and other benefits paid to
653		-	directors or senior management officials of the converted institution in the ordinary H. B. NO. 1507 - PAGE 16
654		-	course of business. As used in this subdivision, the term senior management official
655		-	means a chief executive officer, an assistant chief executive officer, a chief financial
656		-	officer, and any other senior executive officer as may be defined by the state credit union
657		-	board.
658		-	f.Before January 1, 2009, the state credit union board shall adopt rules applicable to state
659		-	credit union conversion to a building and loan association which are consistent with the
660		-	conversion rules of the national credit union administration.
661		-	g.The commissioner shall review the methodology by which the conversion member vote
662		-	was taken and procedures applicable to the member vote. The commissioner shall report
663		-	the commissioner's findings to the state credit union board. If the commissioner or the
664		-	state credit union board disapproves of the methods by which the conversion member
665		-	vote was taken or procedures applicable to the member vote, the member vote must be
666		-	retaken as directed by the commissioner or the state credit union boardA credit union
667		-	may convert to a cooperative financial institution following the procedures outlined in
668		-	section 10 of this Act .
669		-	SECTION 13. AMENDMENT. Section 6-07.2-09 of the North Dakota Century Code is amended and
670		-	reenacted as follows:
	1396	+	c.A state credit union that proposes to convert to a building and loan association
	1397	+	shall submit a notice to the state credit union board of the credit union's intent to
	1398	+	convert at least ninety days before the date of the completion of the conversion.
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	1431	+	d.Upon completion of a conversion, the state credit union is no longer subject to
	1432	+	any of the provisions of this chapter.
	1433	+	e.A director or senior management official of a state credit union may not receive
	1434	+	any economic benefit in connection with a conversion of the state credit union
	1435	+	other than reasonable director fees and reasonable compensation and other
	1436	+	benefits paid to directors or senior management officials of the converted
	1437	+	institution in the ordinary course of business. As used in this subdivision, the term
	1438	+	senior management official means a chief executive officer, an assistant chief
	1439	+	executive officer, a chief financial officer, and any other senior executive officer as
	1440	+	may be defined by the state credit union board.
	1441	+	f.Before January 1, 2009, the state credit union board shall adopt rules applicable
	1442	+	to state credit union conversion to a building and loan association which are
	1443	+	consistent with the conversion rules of the national credit union administration.
	1444	+	g.The commissioner shall review the methodology by which the conversion
	1445	+	member vote was taken and procedures applicable to the member vote. The
	1446	+	commissioner shall report the commissioner's findings to the state credit union
	1447	+	board. If the commissioner or the state credit union board disapproves of the
	1448	+	methods by which the conversion member vote was taken or procedures
	1449	+	applicable to the member vote, the member vote must be retaken as directed by
	1450	+	the commissioner or the state credit union boardA credit union may convert to a
	1451	+	cooperative financial institution following the procedures outlined in section 10 of
	1452	+	this Act.
	1453	+	SECTION 13. AMENDMENT. Section 6-07.2-09 of the North Dakota Century Code is
	1454	+	amended and reenacted as follows:
671	1455		6-07.2-09. Payment of claims.
672		-	1.All claims against the institution's estate, proved to the receiver's satisfaction or approved by
673		-	the circuit court, must be paid in the following order:
674		-	a.Administration expenses, including compensation of each regular officer or employee of
675		-	the receiver for the time actually devoted to the liquidation of the institution at an amount
676		-	not to exceed the compensation paid to the officer or employee for the performance of
677		-	the officer's or employee's regular duties; actual expenses of each regular officer and
678		-	employee necessarily incurred in the performance of the officer's or employee's duties;
679		-	compensation and expenses of any special representative, assistant, accountant, agent,
680		-	or attorney employed by the receiver; court costs; and if the commissioner is acting as
681		-	receiver, such reasonable general overhead expenses as may be incurred by the
682		-	commissioner in the liquidation of the affairs of the institution which shall be ascertained,
	1456	+	1.All claims against the institution's estate, proved to the receiver's satisfaction or
	1457	+	approved by the circuit court, must be paid in the following order:
	1458	+	a.Administration expenses, including compensation of each regular officer or
	1459	+	employee of the receiver for the time actually devoted to the liquidation of the
	1460	+	institution at an amount not to exceed the compensation paid to the officer or
	1461	+	employee for the performance of the officer's or employee's regular duties; actual
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	1495	+	expenses of each regular officer and employee necessarily incurred in the
	1496	+	performance of the officer's or employee's duties; compensation and expenses of
	1497	+	any special representative, assistant, accountant, agent, or attorney employed by
	1498	+	the receiver; court costs; and if the commissioner is acting as receiver, such
	1499	+	reasonable general overhead expenses as may be incurred by the commissioner
	1500	+	in the liquidation of the affairs of the institution which shall be ascertained,
683	1501		determined, and fixed by the commissioner.
684	1502		b.Claims given priority under other provisions of state or federal law.
685		-	c.Deposit obligations, except that notwithstanding sections 6-03-67 and 41-04-31, ~~if a~~
686		-	depositor is indebted to an insolvent bank, the insolvent bank has a right to ~~setoff against~~
687		-	the depositor's account.
	1503	+	c.Deposit obligations, except that notwithstanding sections 6-03-67 and 41-04-31,
	1504	+	if a depositor is indebted to an insolvent bank, the insolvent bank has a right to
	1505	+	setoff against the depositor's account.
688	1506		d.Other general liabilities.
689	1507		e.Debt subordinated to the claims of depositors and general creditors.
690	1508		f.Equity capital securities.
691		-	g.For credit unions and cooperative financial institutions, pro rata distribution to ~~members~~
692		-	computed based on the total amount in each member's deposit ~~accounts as of the date~~
693		-	of liquidation.
694		-	2.Interest on a claim may not be paid until all claims within the same class have ~~received the full~~
695		-	principal amount of claim.
696		-	SECTION 14. AMENDMENT. Section 6-07.2-19 of the North Dakota Century Code is ~~amended and~~
697		-	reenacted as follows: ~~H. B. NO. 1507 - PAGE 17~~
	1509	+	g.For credit unions and cooperative financial institutions, pro rata distribution to
	1510	+	members computed based on the total amount in each member's deposit
	1511	+	accounts as of the date of liquidation.
	1512	+	2.Interest on a claim may not be paid until all claims within the same class have
	1513	+	received the full principal amount of claim.
	1514	+	SECTION 14. AMENDMENT. Section 6-07.2-19 of the North Dakota Century Code is
	1515	+	amended and reenacted as follows:
698	1516		6-07.2-19. Voluntary liquidation of a credit union or cooperative financial institution.
699		-	1.A credit union or cooperative financial institution may go into voluntary liquidation ~~following a~~
700		-	vote of the majority of the board of directors and approval by the majority of ~~its members in~~
701		-	writing or by a vote in favor of the liquidation by a majority of the ~~members of the credit union~~
702		-	or cooperative financial institution at a regular meeting of ~~the members or at a special meeting~~
703		-	called for that purpose.
	1517	+	1.A credit union or cooperative financial institution may go into voluntary liquidation
	1518	+	following a vote of the majority of the board of directors and approval by the majority of
	1519	+	its members in writing or by a vote in favor of the liquidation by a majority of the
	1520	+	members of the credit union or cooperative financial institution at a regular meeting of
	1521	+	the members or at a special meeting called for that purpose.
704	1522		a.When authorization for liquidation is to be obtained at a meeting of members:
705	1523		(1)Notice in writing must be given to each member at least ten days before the
706		-	meeting and the notice must inform members they have the right to vote on the
707		-	proposed liquidation.
708		-	(2)The minutes of the meeting must show the number of members present and the
709		-	number that voted for and against liquidation.
710		-	b.If approval by a majority of all members of a credit union is not obtained at the meeting of
711		-	members, authorization for voluntary liquidation may be obtained by having a majority of
712		-	members sign a statement in substantially the following form: We the undersigned
713		-	members of the _____ Credit Union, Charter No. _____, hereby request the dissolution
714		-	of our credit union.
	1524	+	meeting and the notice must inform members they have the right to vote on
	1525	+	the proposed liquidation.
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	1559	+	(2)The minutes of the meeting must show the number of members present and
	1560	+	the number that voted for and against liquidation.
	1561	+	b.If approval by a majority of all members of a credit union is not obtained at the
	1562	+	meeting of members, authorization for voluntary liquidation may be obtained by
	1563	+	having a majority of members sign a statement in substantially the following form:
	1564	+	We the undersigned members of the _____ Credit Union, Charter No. _____,
	1565	+	hereby request the dissolution of our credit union.
715	1566		c.If approval by a majority of all members of a cooperative financial institution is not
716		-	obtained at the meeting of members, authorization for voluntary liquidation may be
717		-	obtained by having a majority of members sign a statement in substantially ~~the following~~
718		-	form: We the undersigned members of the _____ cooperative ~~financial institution,~~
719		-	Charter No. _____, hereby request the dissolution of our ~~cooperative financial~~
720		-	institutions.
	1567	+	obtained at the meeting of members, authorization for voluntary liquidation may
	1568	+	be obtained by having a majority of members sign a statement in substantially
	1569	+	the following form: We the undersigned members of the _____ cooperative
	1570	+	financial institution, Charter No. _____, hereby request the dissolution of our
	1571	+	cooperative financial institutions.
721	1572		2.The board of directors of a credit union or cooperative financial institution in voluntary
722	1573		liquidation:
723		-	a.Is responsible for conserving the assets, for expediting the liquidation, and for equitably
724		-	distributing the assets to members.
725		-	b.Shall determine all persons handling or having access to funds of the credit union or
726		-	cooperative financial institution are adequately covered by surety bond.
727		-	c.Shall appoint a custodian for the credit union's or cooperative financial institution's
728		-	records that are to be retained for five years after the charter is canceled.
729		-	d.May appoint a liquidating agent and delegate part or all of these responsibilities to the
730		-	agent and may authorize reasonable compensation for the agent's services. A liquidating
731		-	agent must be adequately bonded for faithful performance of the agent's duties, and the
732		-	coverage must remain in effect or the discovery period extended for at least four months
733		-	after the final distribution of assets.
734		-	3.The supervisory committee, a certified public accountant hired by the supervisory committee,
735		-	or if the bylaws do not establish a supervisory committee, a certified public accountant hired
736		-	by the board of directors, is responsible for making periodic audits of the credit union's or
737		-	cooperative financial institution's records, at least quarterly, during the period of liquidation.
	1574	+	a.Is responsible for conserving the assets, for expediting the liquidation, and for
	1575	+	equitably distributing the assets to members.
	1576	+	b.Shall determine all persons handling or having access to funds of the credit union
	1577	+	or cooperative financial institution are adequately covered by surety bond.
	1578	+	c.Shall appoint a custodian for the credit union's or cooperative financial
	1579	+	institution's records that are to be retained for five years after the charter is
	1580	+	canceled.
	1581	+	d.May appoint a liquidating agent and delegate part or all of these responsibilities
	1582	+	to the agent and may authorize reasonable compensation for the agent's
	1583	+	services. A liquidating agent must be adequately bonded for faithful performance
	1584	+	of the agent's duties, and the coverage must remain in effect or the discovery
	1585	+	period extended for at least four months after the final distribution of assets.
	1586	+	3.The supervisory committee, a certified public accountant hired by the supervisory
	1587	+	committee, or if the bylaws do not establish a supervisory committee, a certified public
	1588	+	accountant hired by the board of directors, is responsible for making periodic audits of
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	1621	+	the credit union's or cooperative financial institution's records, at least quarterly, during
	1622	+	the period of liquidation.
738	1623		4.Within three days after the decision of the board of directors to submit the question of
739		-	liquidation to the members, the president shall notify the commissioner and the ~~regional~~
740		-	director of the national credit union administration or federal deposit insurance ~~corporation as~~
741		-	appropriate in writing, setting forth in detail:
742		-	a.The reasons for the proposed action; ~~H. B. NO. 1507 - PAGE 18~~
	1624	+	liquidation to the members, the president shall notify the commissioner and the
	1625	+	regional director of the national credit union administration or federal deposit insurance
	1626	+	corporation as appropriate in writing, setting forth in detail:
	1627	+	a.The reasons for the proposed action;
743	1628		b.The previous month-end balance sheet and income statement; and
744		-	c.A written plan for the liquidation of assets, payment of creditors, and payment of shares
745		-	to be completed within one year of the date of membership approval to liquidate.
746		-	5.Within three days after the action of the members on the question of liquidation, the president
747		-	shall notify the commissioner and the regional director of the national credit union
748		-	administration or federal deposit insurance corporation as appropriate in writing as to whether
749		-	a majority of the members approved the proposed liquidation.
750		-	6.Within ten days of the decision to liquidate by the board of directors, a notice of the decision
751		-	must be handed to each member, electronically distributed, or mailed to the member's last-
752		-	known address to confirm in writing the shares and deposits held by the member in the credit
753		-	union or cooperative financial institution and the loans owed by the member to the credit union
754		-	or cooperative financial institution.
755		-	7.Within ten days of the approval of a majority of the members of a credit union or cooperative
756		-	financial institution of a proposal to liquidate, the board of directors of the credit union or
757		-	cooperative financial institution shall have prepared and mailed to all creditors a notice of
758		-	liquidation containing instructions to present claims to the credit union or cooperative financial
759		-	institution within ninety days for payment. New creditor claims subsequent to this notice which
760		-	are necessary for the continued operation of the credit union during liquidation must continue
761		-	to be paid upon authorization of the board of directors or liquidating agent.
762		-	8.Immediately upon the decision of the membership to liquidate, the credit union or cooperative
763		-	financial institution may continue to do all things under the original corporate name of the
764		-	institution, to sue and be sued, to execute conveyances and other instruments, to take, hold,
765		-	and own property, and to do all other things as may be necessary to realize upon the
766		-	institution's remaining assets for the benefit of the institution's members, but not to engage or
767		-	continue in any new or other business under the institution's charter or otherwise. At the
768		-	discretion of the board of directors or the liquidating agent, transactions upon membership
769		-	transactional accounts may continue to be honored up to the federal insurance limit until the
770		-	accounts are sold or otherwise liquidated.
	1629	+	c.A written plan for the liquidation of assets, payment of creditors, and payment of
	1630	+	shares to be completed within one year of the date of membership approval to
	1631	+	liquidate.
	1632	+	5.Within three days after the action of the members on the question of liquidation, the
	1633	+	president shall notify the commissioner and the regional director of the national credit
	1634	+	union administration or federal deposit insurance corporation as appropriate in writing
	1635	+	as to whether a majority of the members approved the proposed liquidation.
	1636	+	6.Within ten days of the decision to liquidate by the board of directors, a notice of the
	1637	+	decision must be handed to each member, electronically distributed, or mailed to the
	1638	+	member's last-known address to confirm in writing the shares and deposits held by the
	1639	+	member in the credit union or cooperative financial institution and the loans owed by
	1640	+	the member to the credit union or cooperative financial institution.
	1641	+	7.Within ten days of the approval of a majority of the members of a credit union or
	1642	+	cooperative financial institution of a proposal to liquidate, the board of directors of the
	1643	+	credit union or cooperative financial institution shall have prepared and mailed to all
	1644	+	creditors a notice of liquidation containing instructions to present claims to the credit
	1645	+	union or cooperative financial institution within ninety days for payment. New creditor
	1646	+	claims subsequent to this notice which are necessary for the continued operation of
	1647	+	the credit union during liquidation must continue to be paid upon authorization of the
	1648	+	board of directors or liquidating agent.
	1649	+	8.Immediately upon the decision of the membership to liquidate, the credit union or
	1650	+	cooperative financial institution may continue to do all things under the original
	1651	+	corporate name of the institution, to sue and be sued, to execute conveyances and
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	1685	+	other instruments, to take, hold, and own property, and to do all other things as may
	1686	+	be necessary to realize upon the institution's remaining assets for the benefit of the
	1687	+	institution's members, but not to engage or continue in any new or other business
	1688	+	under the institution's charter or otherwise. At the discretion of the board of directors or
	1689	+	the liquidating agent, transactions upon membership transactional accounts may
	1690	+	continue to be honored up to the federal insurance limit until the accounts are sold or
	1691	+	otherwise liquidated.
771	1692		9.At the commencement of voluntary liquidation of a credit union or cooperative financial
772		-	institution, the treasurer or agent conducting the liquidation shall file with the commissioner a
773		-	financial and statistical report and a schedule showing the name, book number or account
774		-	number, share balance, and loan balance of each member.
775		-	10.Credit unions or cooperative financial institution in the process of voluntary liquidation shall file
776		-	with the commissioner a financial and statistical report as of December thirty-first or within
777		-	thirty days after such date. Additional reports, as determined by the commissioner to be
778		-	necessary, must be furnished promptly on written request.
779		-	11.When deemed advisable by the commissioner, an examination of the books and records of a
780		-	credit union or cooperative financial institution may be made before, during, or following
781		-	completion of voluntary liquidation. The commissioner shall set fees for the examination at an
782		-	hourly rate sufficient to cover all reasonable expenses of the department of financial
783		-	institutions associated with the examination. Fees must be collected by the commissioner and
784		-	deposited in the financial institutions regulatory fund.
785		-	12.If at any time during the liquidation of credit union assets or cooperative financial institution, it
786		-	is found the value of remaining assets will not be sufficient to cover the claims of creditors and
787		-	shareholders, the board of directors or, if appointed, the liquidating agent shall immediately
788		-	notify the commissioner and the regional director of the national credit union administration or
789		-	federal deposit insurance corporation as appropriate. Further liquidation of credit union or
790		-	cooperative financial institution assets or distributions to shareholders after notice requires
791		-	written approval from the commissioner. H. B. NO. 1507 - PAGE 19
792		-	13.With the written approval of the commissioner, a partial distribution of the credit union's or
793		-	cooperative financial institution's assets may be made to its members from cash funds
794		-	available on authorization by its board of directors or by a duly authorized liquidating agent
795		-	whose appointment specifically includes the authority. Partial distributions cannot exceed the
796		-	national credit union share insurance limit.
797		-	14.When all assets of the credit union or cooperative financial institution have been converted to
798		-	cash or found to be worthless and all loans and debts owing to it have been collected, sold, or
799		-	found to be uncollectible and all obligations of the credit union or cooperative financial
800		-	institution have been paid, with the exception of amounts due its members:
801		-	a.The books must be closed and the pro rata distribution to members computed. This
802		-	computation must be based on the total amount in each member's share accounts as of
803		-	the date the board of directors voted to voluntarily liquidate.
804		-	b.The amount of gain or loss must be entered in each member's share account and should
805		-	be entered in the member's passbook or statement of account.
806		-	c.Promptly, funds must be distributed to each member. The funds must be mailed to such
807		-	members at their last-known addresses, electronically transmitted to the members
808		-	designated account, or handed to them in person.
809		-	d.The passbooks or written confirmations submitted by members to verify balances must
810		-	be retained with the credit union or cooperative financial institution records.
811		-	e.Unclaimed share accounts subject to the escheat or abandoned property laws of the
812		-	state or the state of the members' residence must be paid to the state as required by
813		-	such laws.
814		-	f.The commissioner must be promptly notified of the date final distribution of assets to the
815		-	members is started.
816		-	g.In the event of a loss on members share accounts, a claim must be submitted by the
817		-	board of directors or the liquidating agent if appointed, to the national credit union
818		-	administration or federal deposit insurance corporation as appropriate, private share
819		-	insurance if available, and bonding company.
820		-	15.Within one hundred twenty days after the final distribution to members is started, the credit
821		-	union or cooperative financial institution shall furnish to the commissioner's office a schedule
822		-	of unpaid claims. The board of directors of the credit union or cooperative financial institution
823		-	or the liquidating agent if appointed shall report money in the account of a member who failed
824		-	to surrender their passbooks or confirm their balances, final distribution checks not cashed
825		-	within one hundred twenty days, and any unpaid claims to the unclaimed property division of
826		-	the board of university and school lands pursuant to chapter 47-30.2.
827		-	SECTION 15. AMENDMENT. Section 6-08-08.1 of the North Dakota Century Code is amended and
828		-	reenacted as follows:
829		-	6-08-08.1. Sale or purchase of associations, banking institutions, or holding companies -
830		-	Notification to commissioner - Hearing.
831		-	1.No person, acting directly or indirectly or through or in concert with one or more other persons,
832		-	may purchase or otherwise acquire control of an association or banking institution unless the
833		-	state banking board or commissioner has been given prior written notice by application of the
834		-	proposed disposition or acquisition. The written application must include such information as
835		-	the state banking board shall specify. The transaction may not be consummated before the
836		-	board or commissioner has granted approval. H. B. NO. 1507 - PAGE 20
	1693	+	institution, the treasurer or agent conducting the liquidation shall file with the
	1694	+	commissioner a financial and statistical report and a schedule showing the name,
	1695	+	book number or account number, share balance, and loan balance of each member.
	1696	+	10.Credit unions or cooperative financial institution in the process of voluntary liquidation
	1697	+	shall file with the commissioner a financial and statistical report as of December thirty-
	1698	+	first or within thirty days after such date. Additional reports, as determined by the
	1699	+	commissioner to be necessary, must be furnished promptly on written request.
	1700	+	11.When deemed advisable by the commissioner, an examination of the books and
	1701	+	records of a credit union or cooperative financial institution may be made before,
	1702	+	during, or following completion of voluntary liquidation. The commissioner shall set
	1703	+	fees for the examination at an hourly rate sufficient to cover all reasonable expenses
	1704	+	of the department of financial institutions associated with the examination. Fees must
	1705	+	be collected by the commissioner and deposited in the financial institutions regulatory
	1706	+	fund.
	1707	+	12.If at any time during the liquidation of credit union assets or cooperative financial
	1708	+	institution, it is found the value of remaining assets will not be sufficient to cover the
	1709	+	claims of creditors and shareholders, the board of directors or, if appointed, the
	1710	+	liquidating agent shall immediately notify the commissioner and the regional director of
	1711	+	the national credit union administration or federal deposit insurance corporation as
	1712	+	appropriate. Further liquidation of credit union or cooperative financial institution
	1713	+	assets or distributions to shareholders after notice requires written approval from the
	1714	+	commissioner.
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	1747	+	13.With the written approval of the commissioner, a partial distribution of the credit
	1748	+	union's or cooperative financial institution's assets may be made to its members from
	1749	+	cash funds available on authorization by its board of directors or by a duly authorized
	1750	+	liquidating agent whose appointment specifically includes the authority. Partial
	1751	+	distributions cannot exceed the national credit union share insurance limit.
	1752	+	14.When all assets of the credit union or cooperative financial institution have been
	1753	+	converted to cash or found to be worthless and all loans and debts owing to it have
	1754	+	been collected, sold, or found to be uncollectible and all obligations of the credit union
	1755	+	or cooperative financial institution have been paid, with the exception of amounts due
	1756	+	its members:
	1757	+	a.The books must be closed and the pro rata distribution to members computed.
	1758	+	This computation must be based on the total amount in each member's share
	1759	+	accounts as of the date the board of directors voted to voluntarily liquidate.
	1760	+	b.The amount of gain or loss must be entered in each member's share account and
	1761	+	should be entered in the member's passbook or statement of account.
	1762	+	c.Promptly, funds must be distributed to each member. The funds must be mailed
	1763	+	to such members at their last-known addresses, electronically transmitted to the
	1764	+	members designated account, or handed to them in person.
	1765	+	d.The passbooks or written confirmations submitted by members to verify balances
	1766	+	must be retained with the credit union or cooperative financial institution records.
	1767	+	e.Unclaimed share accounts subject to the escheat or abandoned property laws of
	1768	+	the state or the state of the members' residence must be paid to the state as
	1769	+	required by such laws.
	1770	+	f.The commissioner must be promptly notified of the date final distribution of
	1771	+	assets to the members is started.
	1772	+	g.In the event of a loss on members share accounts, a claim must be submitted by
	1773	+	the board of directors or the liquidating agent if appointed, to the national credit
	1774	+	union administration or federal deposit insurance corporation as appropriate,
	1775	+	private share insurance if available, and bonding company.
	1776	+	15.Within one hundred twenty days after the final distribution to members is started, the
	1777	+	credit union or cooperative financial institution shall furnish to the commissioner's
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	1811	+	office a schedule of unpaid claims. The board of directors of the credit union or
	1812	+	cooperative financial institution or the liquidating agent if appointed shall report money
	1813	+	in the account of a member who failed to surrender their passbooks or confirm their
	1814	+	balances, final distribution checks not cashed within one hundred twenty days, and
	1815	+	any unpaid claims to the unclaimed property division of the board of university and
	1816	+	school lands pursuant to chapter 47-30.2.
	1817	+	SECTION 15. AMENDMENT. Section 6-08-08.1 of the North Dakota Century Code is
	1818	+	amended and reenacted as follows:
	1819	+	6-08-08.1. Sale or purchase of associations, banking institutions, or holding
	1820	+	companies - Notification to commissioner - Hearing.
	1821	+	1.No person, acting directly or indirectly or through or in concert with one or more other
	1822	+	persons, may purchase or otherwise acquire control of an association or banking
	1823	+	institution unless the state banking board or commissioner has been given prior written
	1824	+	notice by application of the proposed disposition or acquisition. The written application
	1825	+	must include such information as the state banking board shall specify. The
	1826	+	transaction may not be consummated before the board or commissioner has granted
	1827	+	approval.
837	1828		2.The applicant shall publish notice of the application as required by the board by rule.
838		-	3.The commissioner shall determine if the application is complete and notify the applicant of the
839		-	determination. If the commissioner determines the application is incomplete, the commissioner
840		-	shall request additional information deemed necessary to complete the application.
841		-	4.If not approved by the commissioner, the commissioner shall submit the application to the
842		-	board. The board may approve or disapprove the application if the board determines that:
843		-	a.The character, reputation, general fitness, financial standing, and responsibility of the
844		-	persons proposed as new stockholders, directors, or officers is such that the interests of
845		-	the other stockholders, depositors, and creditors of the institution and the public generally
846		-	will be jeopardized by the change in control and management.
847		-	b.The qualifications of management do not include adequate experience with financial
848		-	institutions or other approved related experience.
849		-	5.Within three business days after the board's decision to disapprove an application, the board
850		-	shall notify the applicant in writing of the disapproval. The notice must provide a statement of
851		-	the basis for the disapproval.
852		-	6.Within twenty days after receipt of the notice of disapproval, the applicant may request a
853		-	hearing on the disapproval. The board must conduct a hearing, if requested, under the
854		-	provisions of chapter 28-32. At the conclusion of the hearing, the board shall by order approve
855		-	or disapprove the application on the basis of the record at the hearing.
856		-	7.For purposes of this section, "control" means ownership or control, directly, indirectly, or
857		-	through the actions of one or more persons of the power to vote twenty-five percent or more of
858		-	any class of voting securities of an association, banking institution, controlling bank holding
859		-	company, or the direct or indirect power to control in any manner the election of a majority of
860		-	the directors of an association or banking institution, or to direct the management or policies of
861		-	an association or banking institution, whether by individuals, corporations, limited liability
862		-	companies, partnerships, trusts, or other entities or organizations of any type.
863		-	8.The following acquisitions of voting securities of a North Dakota state chartered bank, which
864		-	would otherwise require submission of an application under this section, are not subject to the
865		-	application requirements if the acquiring person notifies the commissioner within ninety days
866		-	after the acquisition and provides any relevant information requested by the commissioner:
867		-	acquisition of voting securities through inheritance; acquisition of voting securities as a bona
868		-	fide gift; and acquisition of voting securities in satisfaction of a debt previously contracted in
869		-	good faith. This subsection does not limit the authority of the commissioner to require a party
870		-	to submit a written application to the board under subsection 1.
871		-	9.This section does not apply to a cooperative financial institution. H. B. NO. 1507 - PAGE 21
872		-	____________________________ ____________________________
873		-	Speaker of the House President of the Senate
874		-	____________________________ ____________________________
875		-	Chief Clerk of the House Secretary of the Senate
876		-	This certifies that the within bill originated in the House of Representatives of the Sixty-ninth Legislative
877		-	Assembly of North Dakota and is known on the records of that body as House Bill No. 1507.
878		-	House Vote: Yeas 87 Nays 3 Absent 4
879		-	Senate Vote:Yeas 44 Nays 0 Absent 3
880		-	____________________________
881		-	Chief Clerk of the House
882		-	Received by the Governor at ________M. on _____________________________________, 2025.
883		-	Approved at ________M. on __________________________________________________, 2025.
884		-	____________________________
885		-	Governor
886		-	Filed in this office this ___________day of _______________________________________, 2025,
887		-	at ________ o’clock ________M.
888		-	____________________________
889		-	Secretary of State
	1829	+	3.The commissioner shall determine if the application is complete and notify the
	1830	+	applicant of the determination. If the commissioner determines the application is
	1831	+	incomplete, the commissioner shall request additional information deemed necessary
	1832	+	to complete the application.
	1833	+	4.If not approved by the commissioner, the commissioner shall submit the application to
	1834	+	the board. The board may approve or disapprove the application if the board
	1835	+	determines that:
	1836	+	a.The character, reputation, general fitness, financial standing, and responsibility of
	1837	+	the persons proposed as new stockholders, directors, or officers is such that the
	1838	+	interests of the other stockholders, depositors, and creditors of the institution and
	1839	+	the public generally will be jeopardized by the change in control and
	1840	+	management.
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	1873	+	b.The qualifications of management do not include adequate experience with
	1874	+	financial institutions or other approved related experience.
	1875	+	5.Within three business days after the board's decision to disapprove an application, the
	1876	+	board shall notify the applicant in writing of the disapproval. The notice must provide a
	1877	+	statement of the basis for the disapproval.
	1878	+	6.Within twenty days after receipt of the notice of disapproval, the applicant may request
	1879	+	a hearing on the disapproval. The board must conduct a hearing, if requested, under
	1880	+	the provisions of chapter 28-32. At the conclusion of the hearing, the board shall by
	1881	+	order approve or disapprove the application on the basis of the record at the hearing.
	1882	+	7.For purposes of this section, "control" means ownership or control, directly, indirectly,
	1883	+	or through the actions of one or more persons of the power to vote twenty-five percent
	1884	+	or more of any class of voting securities of an association, banking institution,
	1885	+	controlling bank holding company, or the direct or indirect power to control in any
	1886	+	manner the election of a majority of the directors of an association or banking
	1887	+	institution, or to direct the management or policies of an association or banking
	1888	+	institution, whether by individuals, corporations, limited liability companies,
	1889	+	partnerships, trusts, or other entities or organizations of any type.
	1890	+	8.The following acquisitions of voting securities of a North Dakota state chartered bank,
	1891	+	which would otherwise require submission of an application under this section, are not
	1892	+	subject to the application requirements if the acquiring person notifies the
	1893	+	commissioner within ninety days after the acquisition and provides any relevant
	1894	+	information requested by the commissioner: acquisition of voting securities through
	1895	+	inheritance; acquisition of voting securities as a bona fide gift; and acquisition of voting
	1896	+	securities in satisfaction of a debt previously contracted in good faith. This subsection
	1897	+	does not limit the authority of the commissioner to require a party to submit a written
	1898	+	application to the board under subsection 1.
	1899	+	9.This section does not apply to a cooperative financial institution.
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