Any state mutual association or any federal association, if otherwise permitted by federal law and regulations, may become a capital stock association operating under this chapter by following the procedures set forth as follows:

(1) Approval by Board of Directors. The board of directors of the state mutual association or federal association shall approve a plan of conversion by resolution adopted by a majority vote of the existing members of the board;

Terms Used In Tennessee Code 45-3-1105

  • Association: means a capital stock or mutual savings and loan association. See Tennessee Code 45-3-104
  • Capital stock association: means an association, the ownership of which rests in the holders of shares of capital stock, who may receive dividends on their shares, and who have the sole right to vote on matters affecting the association. See Tennessee Code 45-3-104
  • Commissioner: means the commissioner of financial institutions. See Tennessee Code 45-3-104
  • Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
  • Federal association: means a savings and loan association operating under the laws and regulations of the United States. See Tennessee Code 45-3-104
  • Home: means a structure designed for residential use by not more than four (4) families or a single condominium unit, including common elements pertinent thereto, designed for residential use by one (1) family in a multiple dwelling unit structure or complex, and includes fixtures. See Tennessee Code 45-3-104
  • Home office: means the principal place of business maintained by the association and so designated in its charter, at which all authorized business of the association may be transacted. See Tennessee Code 45-3-104
  • Mutual association: means an association, the ownership of which rests in members, who receive interest on their deposit accounts, and who have the sole right to vote on all matters affecting the association. See Tennessee Code 45-3-104
  • operating: means that:
    (A) A charter has been issued to a bank by the United States comptroller of the currency or a certificate of authority has been issued by the commissioner. See Tennessee Code 45-1-103
  • Person: means an individual, firm, partnership, joint venture, trust, estate, unincorporated association, company, or corporation organized under the laws of this or any other state, the United States or foreign country. See Tennessee Code 45-3-104
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
(2) Approval by Commissioner. Upon approval of the plan of conversion by the board of directors, the plan and the resolution approving it shall be submitted to the commissioner. If the commissioner, after appropriate examination, finds that the converting association complies sufficiently with the requirements of this chapter to entitle it to become a capital stock association operating under this chapter, and if the commissioner finds that the plan of conversion is fair and equitable and that the interests of the association and the public are adequately protected, the commissioner shall approve the plan of conversion. However, the commissioner may prescribe terms and conditions, to be fulfilled either prior to or after the conversion, to cause the association to conform with the requirements of this chapter. If the commissioner disapproves the plan of conversion, the commissioner shall state the commissioner’s objections in writing and send the same by certified mail to the home office of the converting association, and afford the association an opportunity to amend and resubmit the plan so as to obviate the objections. In the event that the commissioner disapproves the plan after the resubmission, the commissioner shall send written notice of the final disapproval by certified mail to the home office of the association;
(3) Submission to Members. After receipt of the commissioner’s approval, the plan of conversion shall be submitted to an annual or special meeting of the members of the converting state mutual association or federal association. The plan of conversion shall be approved upon receiving the affirmative vote, in person or by proxy, of at least two-thirds (2/3) of the outstanding votes of members. Thereupon, action shall be taken to adopt a charter and bylaws, to elect directors and officers and take other action as is prescribed for a capital stock association under this chapter and by rules and regulations of the commissioner. A certified report of the proceedings at the meeting shall be filed promptly with the commissioner; and
(4) Certificate of Conversion. If the commissioner finds that the proceedings have been in accordance with this section, the commissioner shall issue a certificate of conversion, attaching, as a part of this certificate, a copy of the charter and the report of proceedings filed pursuant to subdivision (3), and the commissioner shall forward the requisite number of copies of the materials to the secretary of state, who shall, when all required procedures have been met and taxes or fees have been paid, file the same. The conversion shall become effective upon the filing of the charter and other materials by the secretary of state in accordance with law.
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