Organization and Commencing Business

V.S.A. tit. 8, ch. 221, subch. 1

in effect

8 V.S.A. § 31101 Application to organize

31101. Application to organize (a) Application. Seven or more individuals, all of whom are within the proposed field of membership to be served by the credit union and all of whom are of legal age, may agree in writing to associate themselves for the purpose of forming a credit union pursuant to this chapter, and those persons shall be considered as the “organizers” of the applicant. The organizers shall file with the Commissioner a written application for permission to organize a credit union. The application shall contain the following: (1) the name by which the credit union will be known, which name shall be in compliance with the requirements of section 31202 of this title; (2) the purpose for which it is to be formed; (3) the city or town within this State where the credit union’s principal office is to be located; (4) the par value of the shares of the credit union, which must be at least $5.00, but not greater than $25.00; (5) the names, addresses, and occupations of the organizers of the credit union, together with a statement as to the character, reputation, financial responsibility, and competence of such persons; (6) documents that set forth the proposed credit union’s organizational structure and business plan, including: (A) a copy of the organizational and governing documents; (B) the names of the people who are to serve as the directors of the credit union until the initial meeting of the members or until their successors are elected and qualified, and the names, addresses, and occupations of the directors who will be voted on by the members at the initial meeting, together with a statement as to the character, reputation, and financial responsibility of each; (C) a business plan, including a three-year financial projection; (D) a list of the names, addresses, and official positions of the persons who are to be responsible for the conduct of the affairs of the applicant, including all members of the governing body, all members of any committees, and the executive officers; a statement as to the character, reputation, financial responsibility, and competence and experience in financial services and business of such persons, and such disclosure and conflict of interest statements as required by sections 31310 and 31313 of this title; (7) the proposed field of membership, specified in detail; (8) a survey of the demographic makeup of potential members that demonstrates that the potential members within the proposed field of membership are sufficient to support the likely success of the proposed credit union; (9) copies of any application filed with any other supervisory agency; and (10) any additional information the Commissioner may require. (b) Fees. At the time of making the application, the applicant shall pay to the Commissioner the charter fee required by section 30202 of this title. The Commissioner may charge the applicant for other services in accordance with section 30202. (c) Publication of notice. After determining that the application required by this section is complete, the Commissioner shall advise the organization or the organizers of the entity to publish any notice that will be required by the Commissioner under chapter 220, subchapter 8 of this title. Added 2005, No. 16, § 1, eff. July 1, 2005; amended 2021, No. 105 (Adj. Sess.), § 323, eff. July 1, 2022.

8 V.S.A. § 31102 Issuance of certificate of approval; refusal to issue certificate of approval

31102. Issuance of certificate of approval; refusal to issue certificate of approval (a) Certificate of approval. The Commissioner shall determine whether a certificate of approval shall be granted to organize a credit union and shall make the decision in accordance with the requirements of chapter 220, subchapter 8 of this title. (b) Conditions. A grant of a certificate of approval may include such terms and conditions as the Commissioner determines necessary. These may include conditions regarding the organizational form of the credit union under this chapter. (c) Effect of refusal to issue certificate of approval. If the Commissioner refuses to issue a certificate of approval, the organizers may file a new application after one year from the date of the refusal. Added 2005, No. 16, § 1, eff. July 1, 2005.

8 V.S.A. § 31103 Requirements to commence business; minimum initial share deposits; certificate of authority

31103. Requirements to commence business; minimum initial share deposits; certificate of authority (a) At the time the certificate of approval is issued, the Commissioner shall issue an order granting permission to organize that shall set forth the minimum amount of share deposits that the credit union will be required to have to commence business, which in no event shall be less than $25,000.00. (b) The Commissioner may, in particular cases, require different minimum share deposit requirements for different credit unions, and in determining the minimum amount of share deposits for a proposed credit union, may consider such factors as the population of the area where the proposed credit union is to be located, the field of membership for the proposed credit union, competition in that locale, the projected volume and type of business to be conducted, the inherent risks in the business to be conducted, and the need to protect members and other creditors of the credit union. (c) All share deposits shall be in the form of cash or pledges, unless otherwise approved by the Commissioner. (d) Upon receipt of a certificate of approval pursuant to section 31102 of this title, the organizers set forth in the application for permission to organize shall hold the credit union’s charter until such time as the requirements of this subchapter are met or the Commissioner determines that said requirements have not been met. (e)(1) Within 30 days of receipt of a certificate of approval pursuant to section 31102 of this title, the first meeting of the organizers of the credit union shall be called by a notice signed by the organizer or organizers, if any were designated in the application for that purpose, or by a majority of the organizers. Such notice shall state the time, place, and purposes of the meeting. A copy of the notice shall be given to each organizer at least three days before the date appointed for the meeting, or left at each organizer’s residence or usual place of business, or deposited in the post office and addressed to such organizer at that organizer’s residence or usual place of business, and another copy thereof, together with an affidavit of one of the organizers that the notice has been duly served, shall be recorded with the records of the credit union. If all the organizers, in writing indorsed upon the application to organize, waive such notice and fix the time, place, and purposes of the meeting, no notice is required. (2) At such meeting or at any adjournment thereof, the organizers shall by ballot select a temporary secretary, adopt the organizational documents of the credit union, and, in such manner as the internal governance document or the law provides, elect directors and officers. All persons so elected shall qualify for their offices as provided in subchapter 3 of this chapter. (3) The temporary secretary shall make and attest to a record of the proceedings until the secretary has been chosen and sworn, including a record of such choice and qualification. (4) The secretary shall file copies of the organizational documents with the Commissioner within 10 days after their adoption. Within 15 business days of receipt, the Commissioner shall, after examining such organizational documents for conformance with the requirements of this title and other applicable law, approve or disapprove the filed documents. Added 2005, No. 16, § 1, eff. July 1, 2005.

8 V.S.A. § 31104 Submission to Secretary of State

31104. Submission to Secretary of State Following the meeting required under subdivision 31103(e)(1) of this title and approval of the organizational documents by the Commissioner under subdivision 31103(e)(4) of this title, the directors so elected shall submit to the Secretary of State an attested copy of the credit union’s organizational documents as required by Title 11B. The Secretary of State shall determine whether such organizational documents satisfy the requirements of Title 11B. If such requirements are met, the Secretary of State shall file the organizational documents according to the provisions of law. The filing of the organizational documents by the Secretary of State shall not authorize the transaction of business by the credit union until all conditions of this subchapter are satisfied. Added 2005, No. 16, § 1, eff. July 1, 2005.

8 V.S.A. § 31105 Payment of share deposits

31105. Payment of share deposits (a) A credit union organized under this chapter shall not commence business until the minimum share deposits required by the order granting permission to organize have been deposited in cash to the credit of the credit union in a depository designated by the governing body. Share deposits taken as pledges pursuant to subsection 31103(c) of this title must be converted to cash and deposited to the credit of the credit union to be included in the minimum share deposit requirement of this subsection. (b) At such time as the credit union has received in cash the minimum share deposits required in section 31103 of this title, a complete list of the share depositors, with the name, address, occupation, and the amount of the share deposited by each shall be filed with the Commissioner, which list shall be verified by an officer and the secretary of the credit union. Such deposits shall be handled by the credit union in accordance with subchapter 5 of this chapter. Added 2005, No. 16, § 1, eff. July 1, 2005.

8 V.S.A. § 31106 Certificate to commence business; insurance; bond

31106. Certificate to commence business; insurance; bond (a) Upon receipt of the statement required in subsection 31105(b) of this title, the Commissioner shall cause an examination to be made to determine if the minimum share deposits have been credited to the account of the credit union, and that all requirements of this section and other provisions of law have been met. (b) Upon completion of the examination, and if it appears to the Commissioner that the whole of the required share deposits has been paid in, the Commissioner shall issue a certificate under seal authorizing the credit union to commence business, and this certificate shall be filed with the Secretary of State. (c) The certificate of authority to commence business shall be conclusive of the facts stated in the certificate, and it shall be unlawful for any credit union to begin transacting business until a certificate of authority to commence business has been granted. The certificate of authority to commence business shall be conclusive of the facts stated therein, and it shall be unlawful for any credit union to begin transacting business until a certificate of authority to commence business has been granted. (d) A credit union shall not commence business until its shares and deposits are insured by the National Credit Union Administration (NCUA) or its successor agency as required by section 31601 of this title. (e) A credit union shall not commence business until it has acquired such bonds and insurance as required by section 31602 of this title. (f) In the case of a violation of this provision, the officers and directors assenting to the activity shall be personally liable for all debts incurred before the certificate is issued and filed. Added 2005, No. 16, § 1, eff. July 1, 2005; amended 2021, No. 105 (Adj. Sess.), § 324, eff. July 1, 2022.

8 V.S.A. § 31107 Failure to commence business

31107. Failure to commence business (a) The proposed credit union’s certificate of approval and its right to do business shall lapse if the credit union fails to commence business as a credit union within two years after receiving a certificate of approval under section 31102 of this title. (b) Notwithstanding the time limitation in subsection (a) of this section, the Commissioner may extend the period in which business shall be commenced for a period not to exceed six months upon written application by the proposed credit union setting forth the reasons for the extension, filed before the expiration of the time period established by subsection (a) of this section. The Commissioner shall notify the Secretary of State of any such extension granted by the Commissioner. (c) Upon the expiration of the time periods set forth in subsections (a) and (b) of this section, the contributors of initial share deposits of such proposed credit union shall be entitled to the return of any amounts that they have paid to the credit union, and all expenses incurred in the organization of the proposed credit union shall be borne by the original organizers who were named in the application for permission to organize. Added 2005, No. 16, § 1, eff. July 1, 2005.

8 V.S.A. § 31108 Amendment to articles of incorporation

31108. Amendment to articles of incorporation (a) The articles of incorporation, or comparable organization document as applicable to the credit union, may be amended as provided in the bylaws. Notwithstanding the provisions of the bylaws, however, written notice of the meeting and text of the proposed amendment shall be given to each director at least seven days prior to the meeting and to each member in accordance with section 31408 of this title. (b) The credit union shall file with the Commissioner within 10 days after its adoption one copy of any proposed amendment. The credit union shall not amend its articles or comparable organizational document without the written approval of the Commissioner. (c) Following the Commissioner’s approval of the amendment, the credit union shall submit the amendment to the Secretary of State for filing as required by Title 11B. Added 2005, No. 16, § 1, eff. July 1, 2005.

Source: Vermont General Assembly (legislature.vermont.gov)URL: https://legislature.vermont.gov/statutes/chapter/08/221Fetched: 10/21/2026