Vermont § 16101 - Conversions

§ 16101. Conversions

• (a) General. The provisions of this chapter shall apply whenever a national financial institution
  seeks to convert to a Vermont financial institution or whenever a Vermont financial
  institution seeks to convert or amend its charter in order to change its chartering
  authority, the nature or scope of its organizational authority, or to a different
  form of ownership; provided, however, that conversion from a Vermont financial institution
  into a national financial institution shall be as permitted in federal law, shall
  not require the Commissioner’s approval, and federal law shall be controlling to the
  extent the laws of this State are inconsistent. (b) Types of conversions. The types of conversions permitted under this chapter are as follows: (1) conversion from a national financial institution to a Vermont financial institution; (2) conversion from a Vermont financial institution to a national financial institution; (3) conversion of a special purpose financial institution into a universal financial institution
  or into another form of special purpose financial institution; (4) conversion of a universal financial institution into a special purpose financial institution; (5) conversion of a mutual financial institution or a cooperative financial institution
  into an investor-owned financial institution or into a credit union under chapters
  220-226 of this title; (6) conversion of a credit union under chapters 220-226 of this title into a mutual financial
  institution or a cooperative financial institution; or (7) conversion of an investor-owned financial institution into a mutual financial institution. (c) Manner of conversion. Any Vermont financial institution may convert under this chapter in the following
  manner: (1) the governing body of the financial institution shall approve the plan of conversion
  by at least a majority vote, unless a higher percentage is required by the institution’s
  organizational documents; (2) the approved plan of conversion, together with a certified copy of the authorizing
  resolution adopted by the governing body of the financial institution, shall be submitted
  to the Commissioner for approval pursuant to the requirements and procedures of chapter
  201, subchapter 7 of this title, except as provided in subsection (a) of this section; (3) the plan of conversion, as approved by the Commissioner, shall be submitted to the
  investors or mutual voters of the institution, as the case may be, for their approval
  at an annual meeting or at a special meeting called for that purpose as provided in
  subsections (e), (f), and (g) of this section; and (4) the approved plan shall be finalized as provided in subsection (h) of this section. (d) Contents of plan of conversion. The plan of conversion shall include: (1) the name of the institution and its location; (2) the type of the institution that the resulting institution is to be; (3) a method and schedule for terminating any nonconforming activities that would result
  from such conversion; (4) a statement of the competitive impact resulting from such conversion, including the
  loss of particular financial services in the market area resulting from such conversion; (5) a statement that the conversion is subject to approval of the Commissioner, except
  for conversions from a Vermont financial institution to a national financial institution; (6) a statement that the conversion is subject to approval of the institution’s investors
  or mutual voters, as the case may be; (7) in the case of a conversion involving a mutual or cooperative financial institution,
  the plan shall ensure that the interests of depositors and account holders in the
  net worth of the institution are treated equitably; and (8) such additional information as the Commissioner may require. (e) Notice to investors or mutual voters. Notice of the meeting shall be published at least once a week for three successive
  weeks in at least one newspaper of general circulation in the county where the institution’s
  principal office is located or in other newspapers as the Commissioner may designate.
  The notice shall be mailed to each investor of record or mutual voter at the address
  on the books of the institution at least 30 days prior to the date of the meeting. (f) Voting requirements. A majority of each class of equity interest, or a majority of the mutual voters of
  the institution casting votes, unless a higher percentage is required by the institution’s
  organizational documents, is necessary to approve the plan of conversion at the meeting.
  An affirmative vote constitutes approval of the adoption of any amendments to the
  organizational documents of the institution that are necessary to effectuate the transaction. (g) Rights of dissenting investors. For investor-owned institutions that are converting under this chapter, the rights
  of investors dissenting to the conversion are those specified in Title 11 or 11A,
  depending upon the organizational form of the institution; provided, however, the
  rights of dissenting investors in a national financial institution shall be governed
  by federal law. To the extent that dissenters’ rights are not addressed in Title 11
  or 11A or the rights contained in those titles are less beneficial to the dissenting
  investors than those rights listed in the institution’s organizational documents,
  the organizational documents shall govern. (h) Finalizing the plan of conversion. Except as provided in subsection (i) of this section, the financial institution shall
  effect its conversion as follows: (1) Upon approval by the investors or mutual voters of the institution, as the case may
  be, the institution shall submit the executed conversion plan to the Commissioner,
  together with all necessary amendments to the institution’s organizational documents,
  each certified by an officer of the institution. (2) The Commissioner shall issue to the resulting institution a certificate specifying
  the name of the converting institution and the name and organizational structure of
  the resulting institution. The resulting institution shall file one copy of the certificate
  issued by the Commissioner with the Secretary of State for recording. The certificate
  shall be conclusive evidence of the conversion and the correctness of all proceedings
  relating to the conversion in all courts and places. The certificate may be filed
  in any land records office to evidence the new name in which property of the converting
  institution is to be held. (3) Unless a later date is specified in the conversion plan, the conversion becomes effective
  upon filing of the certificate as provided in subdivision (2) of this subsection and
  the former charter of the converting institution shall terminate automatically. The
  Commissioner may file or order any financial institution to file conforming documents
  with the Secretary of State. (i) Completion of conversion into national financial institution. Upon completion of a conversion into a national financial institution, the national
  financial institution shall certify in writing to the Commissioner and the Secretary
  of State that the conversion has been completed under applicable federal law. The
  charter of the converting financial institution shall terminate automatically upon
  issuance of the national financial institution charter. (j) If the Commissioner disapproves the conversion plan, the Commissioner shall state
  the reasons for the disapproval in writing and furnish them to the institution. The
  institution shall be given a reasonable opportunity to amend the plan to eliminate
  the reasons for disapproval. (k) Authority for expedited conversion. Notwithstanding any other section of law or any organizational document of the financial
  institution, the Commissioner may order that a charter conversion become effective
  immediately when the Commissioner finds it is necessary for the protection of depositors,
  investors, or the public. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001; amended 2005, No. 16, § 3, eff. July 1, 2005.)