Kruse, 123120 NDAGO, AGO 2020-L-10

Docket Nº:AGO 2020-L-10
Case Date:December 31, 2020
Court:North Dakota
 
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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...

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