Ms. Lise Kruse
AGO 2020-L-10
Letter Opinion 2020-L-10
North Dakota Attorney General Opinion
December 31, 2020
Ms.
Lise Kruse
Department
of Financial Institutions
2000
Schafer St Suite G
Bismarck,
ND 58501-1204
Dear
Ms. Kruse:
Thank
you for requesting my opinion regarding the State Credit
Union Board’s (Board) authority over certain state
credit union transactions. Specifically, you inquired: 1)
whether the Board may authorize a credit union to purchase a
bank; 2) whether the purchasing credit union may provide
services to acquired former bank customers who reside outside
the purchasing credit union’s field of membership; 3)
whether the Board may expand the purchasing credit
union’s field of membership to include an additional 75
miles around the purchased bank’s former home office;
4) whether the Board may approve a merger of a credit union
into more than one other credit union, effectively splitting
the former credit union’s operations and field of
membership between the surviving credit unions, when a state
credit union is conserved by the Department of Financial
Institutions, or voluntarily when the membership of a going
concern credit union so elects. ; and 5) whether the Board
may authorize the sale of a credit union to a bank.
In my
opinion: 1) the Board may authorize a state credit
union’s acquisition of certain bank assets and
liabilities, provided such acquisition is permissible under
the credit union’s charter and applicable state and
federal law; 2) a purchasing credit union may not provide
services to acquired former bank customers who reside outside
the purchasing credit union’s field of membership; 3)
the Board may expand the purchasing credit union’s
field of membership to include an additional 75 miles around
the purchased bank’s former home office; 4) the Board
may approve a credit union merger into more than one
continuing credit union; and 5) the Board may authorize the
sale of a credit union to a bank.
ANALYSIS
1
North
Dakota Century Code Title 6 provides the powers afforded to
the State Credit Union Board and to state credit unions. The
Board’s powers generally involve “mak[ing] and
enforc[ing] such orders as are necessary or proper to protect
the public and the depositors or creditors” of credit
unions.1 One of the enumerated state credit union
powers, “[s]ubject to authorization by the state credit
union board, acting by order or rule, [is that] a state
credit union has the same powers as a federal credit union
and may engage in any activity in which a credit union could
engage if the credit union were federally chartered.”
2
Generally,
investments available to state and federal credit unions are
more limited than those available to banks and are prescribed
by relevant state and federal law.3Title 12 of the United States
Code provides a federal credit union’s powers, which
include “to invest its funds… (D) in shares or
accounts of savings...
