Submitted by sevans on Tue, 01/06/2015 - 5:28pm

Prompt corrective action for “significantly undercapitalized” credit unions.

(a) Mandatory supervisory actions by credit union. A federally-insured credit union which is “significantly undercapitalized” must—

(1) Earnings retention. Increase net worth and transfer earnings to its regular reserve account accordance with §702.201;

(2) Submit net worth restoration plan. Submit a net worth restoration plan pursuant to §702.206;

(3) Restrict increase in assets. Not permit the credit union's total assets to increase except as provided in §702.202(a)(3) and

(4) Restrict member business loans. Not increase the total dollar amount of member business loans (defined as loans outstanding and unused commitments to lend) as provided in §702.202(a)(4).

… (14) Requiring merger. Require the credit union to merge with another financial institution if one or more grounds exist for placing the credit union into conservatorship pursuant to 12 U.S.C. 1786(h)(1)(F), or into liquidation pursuant to 12 U.S.C. 1787(a)(3)(A)(i).

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