2023 Indiana Code › Title 28. Financial Institutions › Article 7. Specialized Financial Institutions › Chapter 1. Credit Unions › 28-7-1-19.3. Classification as Significantly Undercapitalized or Lower; Mandatory Supervisory Requirements and Restrictions; Discretionary Supervisory Actions; Conservatorship or Liquidation

Sec. 19.3. (a) A credit union that is classified as significantly undercapitalized or lower must do the following:
(1) Increase the credit union's net worth in accordance with section 19.1 of this chapter.
(2) Submit a net worth restoration plan to the director at the time and in the manner specified by the director.
(3) Beginning on the effective date of the credit union's classification as significantly undercapitalized or lower, not permit the credit union's assets to increase beyond the credit union's assets as of the end of the preceding quarter except as permitted under section 19.2(a)(3)(A) or 19.2(a)(3)(B) of this chapter.
(4) Beginning on the effective date of the credit union's classification as significantly undercapitalized or lower, not increase the total dollar amount of member business loans (including loans outstanding and unused commitments to lend) above the total dollar amount of member business loans (including loans outstanding and unused commitments to lend) as of the end of the preceding quarter.
(b) Subject to the applicable procedures for issuing, reviewing, and enforcing directives under this chapter, the director may, by directive, take one (1) or more of the following actions with respect to a significantly undercapitalized credit union (or with respect to a director, officer, or employee of such a credit union) if the director determines that the action is necessary to carry out the purposes of section 19(b) of this chapter:
(1) Prohibit the credit union from, directly or indirectly:
(A) acquiring any interest in any business entity or financial institution;
(B) establishing or acquiring any additional branch office; or
(C) engaging in any new line of business;
except as permitted by the director and the credit union's share insurer.
(2) Restrict the credit union's transactions with a credit union service organization, or require the credit union to reduce or divest the credit union's ownership interest in a credit union service organization.
(3) Restrict the dividend rates that the credit union pays on shares, as determined by the director and the credit union's share insurer.
(4) Prohibit any growth in the credit union's assets, or in a category of assets, or require the credit union to reduce the credit union's assets or a category of the credit union's assets.
(5) Require the credit union or the credit union's credit union service organization to alter, reduce, or terminate any activity that poses excessive risk to the credit union, as determined by the director.
(6) Prohibit the credit union from accepting all or certain nonmember deposits, as specified by the director.
(7) Order a new election of the credit union's board of directors.
(8) Require the credit union to dismiss from office one (1) or more directors or senior executive officers. A dismissal under this subdivision shall not be construed to be a formal administrative action for removal.
(9) Require the credit union to employ qualified senior executive officers, who, if the director and the credit union's share insurer so specify, shall be subject to the approval of the director and the credit union's share insurer.
(10) Limit the compensation of one (1) or more senior executive officers of the credit union to that officer's average rate of compensation (excluding bonuses and profit sharing) during the four (4) calendar quarters preceding the effective date of the credit union's classification as significantly undercapitalized or lower, and prohibit the payment of a bonus or profit share to the officer. If the director exercises the discretionary supervisory authority authorized by this subdivision, the director may permit the credit union to compensate a senior executive officer without the limitations described in this subdivision, or with less stringent limitations than those described in this subdivision, with the prior written approval of the director and the credit union's share insurer.
(11) Restrict or require any other action by the credit union, to the extent the director and the credit union's share insurer determine that the restriction or requirement will carry out the purposes of section 19(b) of this chapter better than any of the restrictions or requirements set forth in subdivisions (1) through (10).
(12) Require the credit union to merge with another financial institution if one (1) or more grounds exist for placing the credit union into conservatorship or into liquidation.
(c) Notwithstanding any other mandatory or discretionary supervisory requirements or restrictions set forth in this section, if a credit union is classified as significantly undercapitalized or lower (including by reclassification in accordance with 12 CFR 702.102(b)), the director and the credit union's share insurer may place the credit union into conservatorship or into liquidation if the credit union has no reasonable prospect of becoming well capitalized, as determined by the director.
As added by P.L.197-2023, SEC.17.