Credit Unions - Mergers and Consolidations - Alteration of Voting Requirement

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
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*sb0783*

SENATE BILL 783
I1 (6lr1932)
ENROLLED BILL
— Finance/Economic Matters —
Introduced by Senator Jackson

Read and Examined by Proofreaders:

_______________________________________________
Proofreader.
_______________________________________________
Proofreader.

Sealed with the Great Seal and presented to the Governor, for his approval this

_______ day of _______________ at _________________ _______ o’clock, ________M.

______________________________________________
President.

CHAPTER ______

AN ACT concerning 1

Credit Unions – Mergers and Consolidations – Alteration of Voting Requirement 2

FOR the purpose of authorizing a majority of the board of a surviving credit union to 3
approve a proposed merger without the affirmative vote of a majority of the members 4
of the surviving credit union, subject to certain requirements; and generally relating 5
to credit union mergers and consolidations. 6

BY repealing and reenacting, without amendments, 7
Article – Financial Institutions 8
Section 6–803(a) and (b)(1) 9
Annotated Code of Maryland 10
(2020 Replacement Volume and 2025 Supplement) 11

BY repealing and reenacting, with amendments, 12
Article – Financial Institutions 13
2 SENATE BILL 783

Section 6–803(d) through (g) 1
Annotated Code of Maryland 2
(2020 Replacement Volume and 2025 Supplement) 3

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 4
That the Laws of Maryland read as follows: 5

Article – Financial Institutions 6

6–803. 7

(a) (1) In this section the following words have the meanings indicated. 8

(2) “Merging credit union” means a credit union that is absorbed or 9
acquired by another credit union in a merger and ceases to exist after the merger. 10

(3) “New credit union” means a credit union that is created when two or 11
more credit unions consolidate to form a newly created credit union. 12

(4) “Surviving credit union” means a credit union that absorbs or acquires 13
another credit union in a merger and continues to exist after the merger. 14

(b) (1) (i) With the approval of the Commissioner, any credit union may 15
merge or consolidate as provided in this section. 16

(ii) A merger or consolidation under this section may be with a credit 17
union organized under the laws of the United States, this State, or any other state. 18

(d) (1) A majority of the board of each credit union proposing a [merger or] 19
consolidation shall: 20

[(1)] (I) Adopt a resolution that declares that the [merger or ] 21
consolidation is advisable; and 22

[(2)] (II) Set a date for a vote on the proposed [merger or] consolidation 23
by the members of each credit union party to the [merger or] consolidation at any annual 24
or special meeting of the membership or by mail ballot to be filed on or before that date. 25

(2) (I) A MAJORITY OF THE BOAR D OF EACH CREDIT UNI ON 26
PROPOSING A MERGER S HALL ADOPT A RESOLUT ION THAT DECLARES TH AT THE 27
MERGER IS ADVISABLE;. 28

(II) A MAJORITY OF THE BOAR D OF EACH MERGING CR EDIT 29
UNION PROPOSING THE MERGER SHALL SET A DATE FOR A VOTE ON THE PROPOSED 30
MERGER BY THE MEMBER S OF EACH MERGING CR EDIT UNION AT ANY AN NUAL OR 31
SENATE BILL 783 3

SPECIAL MEETING OF T HE MEMBERSHIP OR BY MAIL BALLOT TO BE FILED ON OR 1
BEFORE THAT DATE; AND. 2

(III) A MAJORITY OF THE BOAR D OF THE SURVIVING C REDIT 3
UNION PROPOSING THE MERGER MAY SET A DAT E FOR A VOTE ON THE PROPOSED 4
MERGER BY THE MEMBER S OF THE SURVIVING C REDIT UNION AT ANY A NNUAL OR 5
SPECIAL MEETING OF THE MEMBERSHIP OR BY MAIL BALLOT TO BE FI LED ON OR 6
BEFORE THAT DATE. 7

(e) The Commissioner, at the request of [the] A board, may: 8

(1) Waive the vote of the members; and 9

(2) Substitute any reasonable method of determining the approval by the 10
members. 11

(f) (1) [The merger or] A consolidation shall be in accordance with a plan that: 12

[(1)] (I) States the field of membership type that the [surviving or] new 13
credit union will have; 14

[(2)] (II) Is agreed to by a majority of the board of each credit union party 15
to the [merger or] consolidation; and 16

[(3)] (III) Unless provided otherwise by the Commissioner, is approved by 17
the members of each credit union party to the [merger or consolidation,] CONSOLIDATION 18
by the affirmative vote of a majority of t he members of each credit union party to the 19
[merger or] consolidation who vote on the proposal. 20

(2) A MERGER SHALL BE IN ACCORDANCE WITH A PLAN THAT: 21

(I) STATES THE FIELD OF M EMBERSHIP TYPE THAT THE 22
SURVIVING CREDIT UNION WILL HAVE; 23

(II) IS AGREED TO BY A MAJOR ITY OF THE BOARD OF EACH 24
CREDIT UNION PARTY TO THE MERGER; AND 25

(III) UNLESS PROVIDED OTHERWISE BY THE COMMISSIONER, IS 26
APPROVED BY THE MEMB ERS OF EACH MERGING CREDIT UNION PARTY T O THE 27
MERGER BY THE AFFIRM ATIVE VOTE OF A MAJO RITY OF THE MEMBERS OF EACH 28
MERGING CREDIT UNION PARTY TO THE MERGER WHO VOTE ON THE PROPOSAL. 29

(g) (1) [After] UNLESS CONSISTENT WITH THIS SECTION THE A PPROVAL 30
BY THE MEMBERS IS BOTH NOT REQUIRED AND NOT OBTAINED, AFTER agreement by 31
4 SENATE BILL 783

the board and approval by th e members of each credit union party to the merger or 1
consolidation, two officers of each credit union party to the merger or consolidation shall 2
execute a certificate of merger or consolidation. 3

(2) The certificate of merger or consolidation shall include as to each credit 4
union party to the merger or consolidation: 5

(i) The time and place of the meeting of the board at which the plan 6
was agreed to; 7

(ii) The vote by which the plan was agreed to by the board; 8

(iii) A copy of the resolution or other action by which the plan was 9
agreed to by the board; AND 10

(iv) UNLESS CONSISTENT WIT H THIS SECTION THE A PPROVAL 11
BY THE MEMBERS IS BOTH NOT REQUIRED AND NOT OBTAINED: 12

1. The date on or by which the plan was approved by the 13
members of each credit union; and 14

[(v)] 2. Unless provided otherwise by the Commissioner, the vote 15
by which the plan was approved by the members of each credit union. 16

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 17
October 1, 2026. 18

Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
President of the Senate.
________________________________________________________________________________
Speaker of the House of Delegates.