(1) If it appears that any credit union is bankrupt or insolvent, or that it has wilfully violated this chapter, or is operating in an unsafe or unsound manner, the board may issue an order temporarily suspending the credit union's operations for not more than sixty days. The board of directors shall be given notice by registered mail of such suspension, which notice shall include a list of the reasons for such suspension, and a list of the specific violations of this chapter, if any. The board shall also notify the insuring organization of any suspension.
(2) Upon receipt of such suspension notice, the credit union shall cease all operations, except those authorized by the board. The board of directors shall then file with the board a reply to the suspension notice, and may request a hearing to present a plan of corrective actions proposed if the board desires to continue operations. The board of directors may request that the credit union be declared insolvent and a liquidating agent be appointed.
(3) Upon receipt of evidence from the suspended credit union that the conditions causing the order of suspension have been corrected, the board may revoke the suspension notice, permit the credit union to resume normal operations, and notify the insuring organization.
(4) If the board, after issuing notice of suspension and providing an opportunity for a hearing, rejects the credit union's plan to continue operations, the board may issue a notice of involuntary liquidation and appoint a liquidating agent. However, before issuing the notice of involuntary liquidation the board shall make an effort to merge the troubled credit union with another credit union. Involuntary liquidation may not be ordered prior to the conclusion of suspension procedures outlined in this section.
(5) If, within the suspension period, the credit union fails to answer the suspension notice or request a hearing, the board may then revoke the credit union's charter, appoint a liquidating agent, and liquidate the credit union.
(6) In the event of liquidation, the assets of the credit union or the proceeds from any disposition of the assets shall be applied and distributed in the following sequence:
(a) secured creditors up to the value of their collateral;
(b) costs and expenses of liquidation;
(c) wages due the employees of the credit union;
(d) costs and expenses incurred by creditors in successfully opposing the release of the credit union from certain debts as allowed by the board;
(e) taxes owed to the United States or any other governmental unit;
(f) debts owed to the United States;
(g) general creditors, secured creditors to the extent their claims exceed the value of their collateral, and owners of deposit accounts to the extent such accounts are uninsured;
(h) members, to the extent of uninsured share accounts and the organization that insured the accounts of the credit union.
HISTORY: 1996 Act No. 371, Section 1, eff May 29, 1996.
Structure South Carolina Code of Laws
Title 34 - Banking, Financial Institutions and Money
Chapter 26 - South Carolina Credit Union Act
Section 34-26-100. Short title.
Section 34-26-110. Definitions.
Section 34-26-200. Responsibility of Board of Financial Institutions.
Section 34-26-210. Discretionary powers of board.
Section 34-26-260. Form of credit union annual report to board.
Section 34-26-320. Model articles of incorporation to facilitate organization of credit unions.
Section 34-26-330. Amendment of articles of incorporation and bylaws.
Section 34-26-340. Name requirements of credit unions.
Section 34-26-350. Principal place of business of credit union; other locations.
Section 34-26-360. Fiscal year.
Section 34-26-380. Conduct of business out-of-state by credit union; necessity of board approval.
Section 34-26-390. Exemption of credit union from business license tax.
Section 34-26-400. Particular powers of cooperative credit union; loans to other credit unions.
Section 34-26-410. Additional powers of credit union.
Section 34-26-420. Powers incidental to purpose of credit union; limitations.
Section 34-26-500. Requirements of membership; eligible groups; requirement of board approval.
Section 34-26-510. Organizations eligible for credit union membership.
Section 34-26-520. Eligibility of other credit unions.
Section 34-26-530. Application for membership; appeal of membership denial.
Section 34-26-540. Retention of membership.
Section 34-26-550. Member liability for credit union debt.
Section 34-26-560. Expulsion; request for hearing.
Section 34-26-570. Annual and other meetings of credit union membership.
Section 34-26-580. Special meetings; grounds and proceedings.
Section 34-26-600. Authority of board of directors.
Section 34-26-605. Membership of board; term of office; board appointment of credit committee.
Section 34-26-610. Filing of record of names and addresses of membership.
Section 34-26-615. Board vacancies; credit and supervisory committee vacancies.
Section 34-26-620. Prohibition against compensation for services; accident insurance; expenses.
Section 34-26-625. Conflicts of interest; limitation on persons with pecuniary interest.
Section 34-26-630. Election of officers.
Section 34-26-635. Appointment of executive committee.
Section 34-26-640. Meetings of board; frequency of meetings.
Section 34-26-645. Duties of board.
Section 34-26-650. Credit committee supervision of member loans.
Section 34-26-655. Appointment of credit committee loan officers.
Section 34-26-660. Purpose and composition of credit union supervisory committee; term of office.
Section 34-26-665. Suspension of member; supervisory committee report to board.
Section 34-26-670. Suspension or removal of supervisory committee member.
Section 34-26-700. Share accounts; par value; pledged shares.
Section 34-26-730. Withdrawal of deposited funds; withdrawal notice.
Section 34-26-740. Payments on share accounts.
Section 34-26-750. Ownership interests in share accounts; joint accounts.
Section 34-26-760. Share accounts held in trust; beneficiaries.
Section 34-26-770. Payable-on-death share accounts; effect of transfer of account.
Section 34-26-780. Account lien; right of set-off.
Section 34-26-800. Loans and lines of credit; establishment of written policies.
Section 34-26-810. Interest rates.
Section 34-26-820. Incidental fees and expenses.
Section 34-26-830. Loan application.
Section 34-26-840. Limitation of size of loan; in general.
Section 34-26-850. Limitation on loan advances by approved line of credit; periodic review.
Section 34-26-860. Limitation on size of loan secured by real estate; approved collateral.
Section 34-26-870. Credit union participation in joint loan with other credit union.
Section 34-26-880. Credit union participation in federal or state loan programs; other powers.
Section 34-26-900. Provision of member services; in general.
Section 34-26-910. Insurance for officers, agents, and employees.
Section 34-26-920. Marketing arrangements.
Section 34-26-940. Retirement, pension, profit-sharing, and deferred income accounts.
Section 34-26-1000. Investment of credit union funds; investment committee.
Section 34-26-1010. Designation of depositories.
Section 34-26-1020. Permissible investments of credit union funds.
Section 34-26-1110. Permissible use of reserve; effect of liquidation of credit union.
Section 34-26-1120. Special reserves.
Section 34-26-1200. Dissolution; voluntary liquidation; distribution of assets.
Section 34-26-1300. Corporate credit union.
Section 34-26-1310. Purposes of corporate credit union.
Section 34-26-1320. Corporate credit union membership.
Section 34-26-1330. Application to form corporate credit union.
Section 34-26-1340. Powers and privileges of corporate credit union.
Section 34-26-1370. Board of directors of corporate credit union meetings.
Section 34-26-1380. Corporate credit union reserve requirements; exemptions.