Montana § 32-3-805 - Membership Capital Accounts

§ 32-3-805. Membership Capital Accounts

Membership capital accounts. (1) A corporate credit union may issue membership capital accounts to members that are available to cover losses that exceed reserves and undivided earnings and paid-in capital. (2) (a) For purposes of this section, "membership capital account" means a share, deposit, term certificate, adjusted balance, or other account that: (i) is established, at a minimum, as a 3-year notice account; (ii) is limited to members; (iii) is not subject to share insurance coverage by the national credit union share insurance fund or other deposit insurers; and (iv) in the event of liquidation of the corporate credit union, is payable only after satisfaction of all liabilities of the liquidation estate, including uninsured obligations to shareholders and the national credit union share insurance fund. (b) Upon written notice of intent to withdraw membership capital, the balance of the account will be frozen with no annual adjustment until the conclusion of the notice period, except in the case of a credit union that is placed into liquidation, is purchased and assumed, or is merged. (c) Upon notification of intent to withdraw, the amount of the account on notice that may be considered membership capital is reduced by a constant monthly amortization that ensures that the recognition of membership capital is fully amortized at the end of the notice period. (d) The full balance of a membership capital account that has been placed on notice, not just the remaining nonamortized portion, is available to absorb losses in excess of reserves and undivided earnings and of paid-in capital until the funds are released by the corporate credit union at the conclusion of the notice period. (3) A membership capital account may not be used to pledge borrowings. (4) Corporate credit unions that issue membership capital accounts shall disclose the terms and conditions of the account when it is opened and at least annually thereafter.