Share Insurance Conversions

National Credit Union Administration

§ 708b.301

Subpart C—Forms

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§ 708b.301 Conversion of insurance
(State Chartered Credit Union).
Unless the Regional Director approves the use of different forms, a
state chartered credit union must use
the forms in this section in connection
with a conversion to nonfederal insurance.
(a) Form letter notifying NCUA of intent to convert:
(insert name), NCUA Regional Director
(insert address of NCUA Regional Director)
Re: Notice of Intent to Convert to Private
Share Insurance
Dear Director (insert name):
In accordance with federal law at title 12,
United States Code Section 1785(b)(1)(D), I
request the National Credit Union Administration approve the conversion of (insert
name of credit union) from federal share insurance to private primary share insurance
with (insert name of private insurance company).
On (insert date), the board of directors of
(insert name of credit union) resolved to pursue the conversion from federal insurance to
private insurance. A copy of the resolution is
enclosed.
On (insert date), the credit union plans to
solicit the vote of our members on the conversion. The credit union will employ (insert
name, address, and telephone number of
independent entity) to conduct the member
vote. The credit union will use the form notice and ballot required by NCUA regulations, and will certify the results to NCUA as
required by NCUA regulations.
Aside from the notice and ballot, the credit
union (does)(does not) intend to provide its
members with additional written information about the conversion. I understand that
NCUA regulations forbid any communications to members, including communications
about NCUA insurance or private insurance,
that are inaccurate or deceptive.
(Insert name of State) allows credit unions
to obtain primary share insurance from (insert name of private insurance company). I
have enclosed a copy of a letter from (insert
name and title of state regulator) establishing that (insert name of private insurer)
has the authority to provide (insert name of
credit union) with primary share insurance.
I have enclosed a copy of a letter from (insert name of private insurer) indicating it
has accepted (insert name of credit union)
for primary share insurance and will insure
the credit union immediately upon the date
that it loses its federal share insurance.
I am aware of the requirements of 12 U.S.C.
1831t(b), including all notification and acknowledgment requirements.

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§ 708b.301

12 CFR Ch. VII (1–1–16 Edition)

The point of contact for conversion matters is (insert name and title of credit union
employee), who can be reached at (insert
telephone number).
Sincerely,
(signature)

1. To consider and act upon a proposal to
convert your account insurance from federal
insurance to private insurance.
2. To approve the action of the Board of Directors in authorizing the officers of the
credit union to carry out the proposed conversion.

Chief Executive Officer.

INSURANCE CONVERSION

Enclosures

(b) Form notice to members of intent
to convert and special meeting of members:
NOTICE OF PROPOSAL TO CONVERT TO NONFEDERALLY-INSURED
STATUS AND SPECIAL
MEETING OF MEMBERS
(INSERT NAME OF CONVERTING CREDIT UNION)
On (insert date), the board of directors of
your credit union approved a proposition to
convert from federal share (deposit) insurance to private insurance. You are encouraged to attend a special meeting of our credit union at (insert address) on (insert time
and date) to address this proposition.
PURPOSE OF MEETING
The meeting has two purposes:

Currently, your accounts have share insurance provided by the National Credit Union
Administration, an agency of the federal
government. The basic federal coverage is up
to $100,000, but accounts may be structured
in different ways, such as joint accounts,
payable-on-death accounts, or IRA accounts,
to achieve federal coverage of much more
than $100,000. If the conversion is approved,
your federal insurance will terminate on the
effective date of the conversion. Instead,
your accounts in the credit union will be insured up to $(insert dollar amount) by (insert
name of insurer), a corporation chartered by
the State of (insert name of State). The federal insurance provided by the National
Credit Union Administration is backed by
the full faith and credit of the United States
government. The private insurance you will
receive from (insert name of insurer), however, is not guaranteed by the federal or any
state or local government.

IF THIS CONVERSION IS APPROVED, AND THE (insert name of credit
union) FAILS, THE FEDERAL GOVERNMENT DOES NOT GUARANTEE YOU

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WILL GET YOUR MONEY BACK.

Also, because this conversion, if approved,
would result in the loss of federal share insurance, the credit union will, at any time
between the approval of the conversion and
the effective date of conversion and upon request by the member, permit all members
who have share certificates or other term accounts to close the federally-insured portion
of those accounts without an early withdrawal penalty. (This is an optional sentence. It may be deleted without the approval of the Regional Director. The members must be informed about this right, however, as described in 12 CFR 708b.204(c).)
The board of directors has concluded that
the proposed conversion is desirable for the
following reasons: (insert reasons). (This is
an optional paragraph. It may be deleted
without the prior approval of the Regional
Director.)
The proposed conversion will result in the
following one-time cost associated with the
conversion: (List the total estimated dollar
amount, including (1) the cost of conducting

the vote, (2) the cost of changing the credit
union’s name and insurance logo, and (3) attorney and consultant fees.)
The conversion must have the approval of
a majority of members who vote on the proposal, provided at least 20 percent of the
total membership participates in the voting.
Enclosed with this Notice of Special Meeting is a ballot. If you cannot attend the
meeting, please complete the ballot and return it to (insert name and address of independent entity conducting the vote) by no
later than (insert time and date). To be
counted, your ballot must reach us by that
date and time.
By order of the board of directors.
(signature of Board Presiding Officer)
(insert title and date)

(c) Form ballot:

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National Credit Union Administration

§ 708b.301

BALLOT FOR CONVERSION TO NONFEDERALLYINSURED STATUS
(INSERT NAME OF CONVERTING CREDIT UNION)
Name of Member: (insert name)
Account Number: (insert account number)
The credit union must receive this ballot
by (insert date and time for vote). Please
mail or bring it to: (Insert name of independent entity and address).
I understand if the conversion of the (insert name of credit union) is approved, the
National Credit Union Administration share

(deposit) insurance I now have, up to $100,000,
or possibly more if I use different account
structures, will terminate upon the effective
date of the conversion. Instead, my shares in
the (insert name of credit union) will be insured up to $(insert dollar amount) by (insert
name of insurer), a corporation chartered by
the State of (insert name of state). The federal insurance provided by the National
Credit Union Administration is backed by
the full faith and credit of the United States
Government. The private insurance provided
by (insert name of insurer) is not.

I FURTHER UNDERSTAND THAT IF THIS CONVERSION IS APPROVED
AND THE (insert name of credit union) FAILS, THE FEDERAL
GOVERNMENT DOES NOT GUARANTEE THAT I WILL GET MY MONEY
BACK.

I vote on the proposal as follows (check
one box):
[ ] Approve the conversion to private insurance and authorize the Board of Directors
to take all necessary action to accomplish
the conversion.
[ ] Do not approve the conversion to private insurance.
Signed:
Date:

lllllllllllllllllll
(Insert printed member’s name)
llllllllllllllllllll

(d) Form certification of member
vote to NCUA:

lpowell on DSK54DXVN1OFR with $$_JOB

CERTIFICATION OF VOTE ON CONVERSION TO
NONFEDERALLY-INSURED STATUS
We, the undersigned officers of the (insert
name of converting credit union), certify the
completion of the following actions:
1. At a meeting on (insert date), the Board
of Directors adopted a resolution to seek the
conversion of our primary share insurance
coverage from NCUA to (insert name of private insurer).
2. Not more than 30 nor less than 7 days before the date of the vote, copies of the notice
of special meeting and the ballot, as approved by the National Credit Union Administration, were mailed to our members.
3. The credit union arranged for the conduct of a special meeting of our members at
the time and place announced in the Notice
to consider and act upon the proposed conversion.
4. At the special meeting, the credit union
arranged for an explanation of the conversion to the members present at the special
meeting.

5. The (insert name), an entity independent
of the credit union, conducted the membership vote at the special meeting. The members voted as follows:
(insert) Number of total members
(insert) Number of members present at the
special meeting
(insert) Number of members present who
voted in favor of the conversion
(insert) Number of members present who
voted against the conversion
(insert) Number of additional written ballots in favor of the conversion
(insert) Number of additional written ballots opposed to the conversion
(insert ‘‘20% or more’’) OR (insert ‘‘Less
than 20%’’) of the total membership voted.
Of those who voted, a majority voted (insert
‘‘in favor of’’) OR (‘‘against’’) conversion.
The action of the members at the special
meeting was recorded in the minutes.
This certification signed the (insert date).
(signature of Board Presiding Officer)
(insert typed name and title)
(signature of Board Secretary)
(insert typed name and title)
I (insert name), an officer of the (insert
name of independent entity that conducted
the vote), hereby certify that the information recorded in paragraph 5 above is accurate.
This certification signed the (insert date):
(signature of officer of independent entity)
(typed name, title, and phone number)
[70 FR 3288, Jan. 24, 2005, as amended at 73
FR 30477, May 28, 2008]

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