Article 6. Conversions of California Financial Code >> Division 2. >> Chapter 2. >> Article 6.

A state association may convert itself into a federal association by following the procedure outlined in Sections 5701 through 5708.

At any regular or special meeting called to consider the conversion of an association into a federal association, in the case of a stock association, the stockholders entitled to vote and any members entitled to vote, by an affirmative majority of the votes cast in person or by proxy; and in the case of a mutual association the members, by action on a proposal approved by the members, may resolve to convert the association into a federal association.

Any executor, administrator, guardian, conservator of a natural person or receiver, and any fiduciary or trustee, and any public corporation, political subdivision, public instrumentality, charitable institution, educational and eleemosynary institution, trust company or financial institution, and any insurance company or cemetery association may, without obtaining court approval:
  (a) Vote in person or by proxy in favor of or against converting a state association into a federal association, or may approve or disapprove the determination to so convert.
  (b) Exchange any stock, savings accounts, or other rights or claims, for securities issued by the federal association, and hold the securities as legal investments.

Promptly after the meeting approving a conversion into a federal association, the association shall file in the office of the commissioner a certificate verified by the president or vice president and the secretary or assistant secretary of the association. The certificate shall contain a copy of the minutes of the meeting and a statement of the number of stockholders and members entitled to vote and the number voting to approve the determination to convert the association into a federal association. A like certificate shall be filed in the office of the Secretary of State.

A certified copy of the certificate required by Section 5703 filed in the office of the Secretary of State is presumptive evidence of the holding of the meeting, the action taken at the meeting, and of the approval of stockholders and members.

After the meeting of the stockholders and members, the association shall take any action necessary to make it a federal association, and promptly after receipt of the federal charter the association shall file in the office of the commissioner and in the office of the Secretary of State, a copy of the charter issued to it by the Office of Thrift Supervision or a certificate showing the organization of the association as a federal association certified by or on behalf of the Office of Thrift Supervision. Upon the filing of this instrument in the office of the Secretary of State the association ceases to be a state association and is a federal association.

At the time the conversion into a federal association becomes effective the association ceases to be supervised by this state and all of the property of the association, including all of its right, title, and interest in and to all property of every kind and character immediately, by operation of law and without any conveyance, or transfer and without any further act or deed, is vested in the association under its new name and style as a federal association and under its new jurisdiction.

The converted federal association shall have, hold, and enjoy the property mentioned in Section 5706 in its own right as fully and to the same extent as the property was possessed, held, and enjoyed by it as a state association and the federal association shall continue to be responsible for all of the obligations of the converted state association to the same extent as though the conversion had not taken place. The federal association is merely a continuation of the state association under a new name and new jurisdiction and the revision of its corporate structure as is considered necessary for its proper operation under the new jurisdiction.

Where a copy of a charter of a federal association, issued by the Federal Home Loan Bank Board pursuant to the laws of the United States was filed with the Secretary of State prior to September 13, 1941, with the intent of converting a building and loan association organized and existing under the laws of this state into a federal association, those conversions are validated, legalized, ratified and confirmed.

Any federal association may convert itself into an association by following the procedure set forth in Sections 5710 through 5718.

At any regular or special meeting called to consider the action, the stockholders and members entitled to vote by an affirmative majority of the votes cast in person or by proxy, may resolve to convert a federal association into an association.

Copies of the minutes of the proceedings of the meeting of the stockholders or members in which they vote to convert into an association, verified by the president or vice president and the secretary or an assistant secretary, shall be filed promptly after the meeting in the office of the commissioner, and, in duplicate, with the federal home loan bank of which the association is a member.

The verified copies of the minutes of the meeting, when filed as required by Section 5711, are presumptive evidence of the holding and action of the meeting.

After a meeting as provided for in Section 5710, the federal association shall take or cause to be taken such action as shall make it an association in the manner prescribed and authorized by this division. The directors elected at the meeting shall file the documents with applicable fees and take such proceedings as are required by this division in the case of the original incorporation of an association. The decision for approval or denial shall be issued in writing. No association incorporated by conversion from a federal association is required to comply with any of the provisions of law or any regulations promulgated by the commissioner relating to the minimum amounts of capital required to be subscribed in connection with the original incorporation of an association under this division.

The directors of an association converted from a federal association may insert in the articles of incorporation the following statement: "This association is incorporated by conversion from a federal savings and loan association. "

Promptly after the filing of the articles of incorporation with the Secretary of State, there shall be filed with the federal home loan bank of which the association is a member, two copies of the articles of incorporation, certified by the Secretary of State.

Upon the filing of the articles of incorporation with the Secretary of State, the federal association ceases to be a federal association and is an association under the laws of this state. All of the property of the federal association, including all of its right, title, and interest in and to all property of every kind and character immediately, by operation of law and without any conveyance or transfer, and without any further act or deed, is vested in the association under its new name and style as an association and under its new jurisdiction.

The converted association shall have, hold, and enjoy the property mentioned in Section 5716 in its own right as fully and to the same extent as the property was possessed, held and enjoyed by it as a federal association and the converted association continues responsible for all of the obligations of the converted federal association to the same extent as though conversion had not taken place. The association is merely a continuation of the federal association under a new name and new jurisdiction and such revision of its corporate structure as is considered necessary for its proper operation under the new jurisdiction.

In the event stock is to be issued by the converted association, the commissioner may issue an organizing permit to the federal association or to the board of directors elected to serve after conversion, authorizing the association or the board of directors to take subscriptions to stock, to collect subscription payments and to impound the payments pending the issuance of stock, and authorizing the converted association to issue stock after the filing of its articles of incorporation with the Secretary of State. The commissioner may require that all stock to be initially issued be subscribed and fully paid. The commissioner may also issue a certificate of authority to the converted association to be effective upon filing of its articles of incorporation, and may also issue any other orders and permits necessary to authorize the association to continue business without interruption upon the filing of its articles of incorporation.