§ 9-1105. Application to convert; examination; audit

   (a) Application to convert. -- To convert to a credit union, the mutual association shall deliver to the Commissioner:

   (1) A written application for conversion in the form that the Department of Labor, Licensing, and Regulation requires;

   (2) Any additional exhibits the Department may require;

   (3) Any filing fee set by the Department by regulation; and

   (4) Its proposed amended articles and bylaws.

(b) Examination required. -- Upon receipt of an application to convert, the Commissioner shall examine the mutual association.

(c) Scope of examination. -- The examination shall include, but not be limited to, the following:

   (1) The financial history and condition of the mutual association including:

      (i) The identification of overvalued assets, undisclosed nonperforming loans, and understated liabilities;

      (ii) The identification of assets that may become nonperforming assets upon conversion;

      (iii) The identification of loans in default and loans past due over 60 days;

      (iv) Review of material litigation affecting the mutual association, and the identification of significant judgments, orders or decrees affecting its financial status; and

      (v) Review of mortgage contracts, participating loans, and other commitments.

   (2) The management of the association.

(d) Audit as condition of approval. -- As a condition of approval of an application of conversion, the Commissioner may require a mutual association to have its books and records audited and certified under § 9-502 of this title.

HISTORY: 1988, ch. 635; 1992, ch. 22, § 1; 1995, ch. 120, § 19; 1996, ch. 326, § 2.