the board of directors and a suspension of the acceptance of payments on and withdrawal of shares and the granting of loans shall be put into immediate force and effect. This suspension, and any prior suspension action taken by the board including any requirement of written notice of intention to withdraw shares, then in force and effect, shall remain in force and effect until terminated by the board of directors following accomplishment of the scaledown, or until such termination is authorized by the Director.

§ 311.3 Determination of amount of scaledown required.

(a) The board of directors shall prepare an analysis of the credit union's financial condition covering the causes of its insolvency and its actual and estimated losses, including an analysis of its outstanding delinquent and doubtful loans to members. Those items which are proposed to be charged off against the scaledown shall be separately identified in detail and listed on a separate schedule.

(b) On the basis of the actual and estimated losses of all kinds, the board of directors shall determine the amount by which it is necessary to scaledown the members' shareholdings in order to restore the solvency of the credit union, and, on the basis of the total of such shareholdings, the percentage by which such shareholdings will be scaled down in achieving such result.

§ 311.4 Submittal to Bureau for approval.

The analysis, schedule and determination required by § 311.3 (a) and (b), together with a current financial and statistical report of the credit union (Form FCU-109) shall be submitted by the board of directors to the Regional Representative.

§ 311.5 Approval of scaledown by Di

rector.

If the Director is satisfied that the proposed scaledown is fair and equitable to the members, that it will restore the solvency of the credit union, and that there is a reasonable expectation of future successful credit union operations, he will approve the proposal for the scaledown and authorize the board of directors to submit it to the members.

§ 311.6 Approval by majority of all

members.

Upon authorization by the Director the board of directors promptly shall cause a special meeting of the members to be called in accordance with the provisions of the bylaws for consideration of the proposal. The members shall have the right to vote in person at the meeting, or by written ballot to be filed not later than thirty days following the date of the meeting. In addition to stating the purpose of the meeting, the written notice shall contain a form of written ballot for the use of those members who chose to vote thereby, and shall state when and where such ballots may be filed. Approval of the proposition for the scaledown shall be by the affirmative vote of a majority of all the members. § 311.7 Completion of scaledown.

If the scaledown is approved by the majority of the members it shall be recorded on the books and records of the credit union, including the individual share accounts of the members. In addition, a schedule of the individual share accounts of the members showing the account number, the name, the individual share balance before the scaledown, the amount of scaledown applicable to each member and the individual share balance after the scaledown shall be prepared in duplicate and one copy, certified correct by the treasurer of the credit union, shall be forwarded to the Regional Representative. Thereafter the board of directors shall terminate the suspension on share payments and withdrawals and on the granting of loans, and credit union operations may be resumed.

§ 311.8

Recoveries on assets charged off.

The assets of the credit union which were charged off in the scaledown may be segregated on the books and records of the credit union and held for the benefit of the members whose share account balances were reduced in the scaledown if provided for in the scaledown proposal voted on by the members. Any recoveries on these assets shall be distributed to such individuals (whether or not they are members at the time of recovery or distribution) from time to time in amounts which bear the same ratio to the amounts by which the individual members' share accounts were

reduced as the total amount to be distributed bears to the total amount of assets so segregated.

§ 311.9 Future earnings not available for restoration of scaledown.

Future earnings of the credit union shall not be available for distribution to restore in whole or in part amounts by which members' share accounts were reduced by virtue of the scaledown.

PART 315-INVOLUNTARY LIQUIDATION OF FEDERAL CREDIT UNIONS Sec.

315.1 Basis for involuntary liquidation. 315.2 Suspension or revocation of charter. 315.3 Order directing involuntary liquidation.

315.4 Immediate suspension or liquidation. 315.5 Involuntary liquidation and appointment of liquidating agent.

315.6 Cancellation of charter.

AUTHORITY: The provisions of this Part 315 issued under sec. 21, 73 Stat. 635, 12 U.S.C. 1766.

SOURCE: The provisions of this Part 315 appear at 25 F.R. 5291, June 14, 1960, unless otherwise noted.

§ 315.1 Basis for involuntary liquidation.

The charter of any Federal credit union may be suspended or revoked, the Federal credit union placed in involuntary liquidation and a liquidating agent therefor appointed upon the finding by the Director that the organization is bankrupt, or insolvent, or has violated any provisions of its charter, its bylaws, the Act, or any regulation issued by the Bureau, or that such suspension or revocation and liquidation is in the best interests of the membership of the Federal credit union concerned.

§ 315.2 Suspension or revocation of

charter.

Except as otherwise provided for by the regulations in this part, the Director before suspending or revoking the charter of a Federal credit union and placing the Federal credit union in liquidation, may cause to be served on the Federal credit union concerned a notice of intention to suspend or revoke the charter, a statement of the reasons for such proposed action and an order directing the Federal credit union concerned to show cause why its charter should not be suspended or revoked. Service of the order to show cause shall be either by mail

addressed to the Federal credit union concerned at the last address of its office as shown by the records of the Bureau or by delivery to any officer or member of the board of directors of the Federal credit union. The order shall be returned to the Regional Representative. No oral hearing shall be held on such order to show cause, but the Federal credit union concerned may file with the Regional Representative, within the period of time specified in the order to show cause, a statement in writing setting forth the grounds and reasons why its charter should not be suspended or revoked. This statement shall be accompanied by a certified copy of a resolution of the board of directors of the Federal credit union concerned authorizing the filing of the statement. If no statement is received within the period of time specified in the order, or if the proffered reasons why the charter should not be suspended or revoked are found to be insufficient by the Director, he may order that the charter be suspended or revoked and may order the Federal credit union placed in involuntary liquidation. If the Federal credit union is ordered to be liquidated, the Director shall designate the liquidating agent in the order directing the liquidation. A copy of the order directing the suspension or revocation and, where proper, of the order directing the involuntary liquidation and of the appointment of a liquidating agent and a statement of the findings on which the order is based shall be served on the Federal credit union concerned. Such service shall be either by mail addressed to the Federal credit union concerned at the last address of its office as shown by the records of the Bureau or by delivery to any officer or member of the board of directors of the Federal credit union concerned.

§ 315.3 Order directing

liquidation.

involuntary

In the event that the Director does not order the Federal credit union placed in involuntary liquidation at the time he orders its charter suspended or revoked (see § 315.2), the Director may, at any time prior to the cancellation of the suspension or the annulment of the revocation, order the Federal credit union concerned to show cause why it should not be placed in involuntary liquidation. Service of the order to show cause shall be either by mail addressed to the Federal credit union concerned at the last

address of its office as shown by the records of the Bureau or by delivery to any officer or member of the board of directors of the Federal credit union concerned. The order shall be returned to the Regional Representative. No oral hearing shall be held on such order to show cause, but the Federal credit union concerned may file with the Regional Representative within the period of time specified in the order to show cause, a statement in writing setting forth the grounds and reasons why it should not be placed in involuntary liquidation. This statement shall be accompanied by a certified copy of a resolution of the board of directors of the Federal credit union concerned authorizing the filing of the statement. If no statement is received within the period of time specified in the order, or if the proffered reasons why the Federal credit union should not be placed in involuntary liquidation are found to be insufficient by the Director, he may order that the Federal credit union be placed in involuntary liquidation and may appoint a liquidating agent. A copy of the order directing the involuntary liquidation and appointment of a liquidating agent and a statement of the findings on which the order is based shall be served on the Federal credit union concerned. Such service shall be either by mail addressed to the Federal credit union concerned at the last address of its office as shown by the records of the Bureau or by delivery to any officer or member of the board of directors of the Federal credit union. § 315.4 Immediate suspension or liquidation.

In any case where the Director shall find that a Federal credit union is insolvent or that the interests of its members require immediate action or that the issuance of the order to show cause provided for in §§ 315.2 and 315.3 will not serve any purpose, the Director may order the suspension or revocation of the charter and the involuntary liquidation of the Federal credit union and the appointment of a liquidating agent therefor without prior notice to the Federal credit union of such action and without prior issuance of the order to show cause provided for in § 315.2 or § 315.3.

§ 315.5 Involuntary liquidation and appointment of liquidating agent.

On receipt of a copy of the order placing the Federal credit union in in

voluntary liquidation, the officers and directors or the Federal credit union concerned shall deliver to the liquidating agent possession and control of all books, records, assets, and property of every description of the Federal credit union, and the liquidating agent shall proceed to convert said assets to cash, collect all debts due to said Federal credit union and to wind up its affairs in accordance with the provisions of section 21 of the Act (12 U.S.C. 1766) and the instructions and procedures issued to said liquidating agent by the Regional Representative. § 315.6 Cancellation of charter.

On the completion of the liquidation and certification by the liquidating agent that the distribution of the assets of the Federal credit union has been completed, the Director shall cancel the charter of the Federal credit union concerned.

Procedure for requesting access identifiable records.

to

320.4 Procedure for denials and review of denials of requests for records.

320.5 Exempted material.

AUTHORITY: Provisions of this Part 320 issued under sec. 21, 73 Stat. 635; 12 U.S.C. 1766; apply 5 U.S.C. 552, 559.

SOURCE: The provisions of this Part 320 appear at 33 F.R. 15868, Oct. 26, 1968, unless otherwise noted.

§ 320.1 Statement of policy.

It is the policy of the Bureau to provide members of the public with all information which will permit the most effective functioning of the Federal Credit Union Program. The Bureau is particularly anxious to assure a steady flow of information to persons most affected by the program, namely, officials, and members of Federal credit unions. Consequently, all records and information of the Bureau, consistent with the obligations of confidentiality and the administrative necessities recognized by 5 U.S.C. 552, are available for public inspection and copying.

§ 320.2 Information centers.

(a) In accordance with regulations of the Department, the Commissioner of

Social Security has designated BFCU headquarters and its regional offices as Information Centers for the Federal Credit Union Program. The locations are listed in the Bureau's "Annual Report of Operations" (see § 301.15(b) of this chapter).

(b) The BFCU Information Centers will have copies of the publications described in § 301.14-301.17 of this chapter. Requests for identifiable records may be made at the centers, either orally or in writing.

(c) The Regional Representative is responsible for the operation of the Information Center in his regional office. The Director of the Division of Administration is responsible for the operation of the center maintained at BFCU headquarters.

§ 320.3

Procedure for requesting access to identifiable records.

All BFCU information and records in existence which are not exempt by law and regulation are available for public inspection and copying. When material requested is not contained in any of the publications of BFCU, it must be identified by the requestor by means of a brief description containing the name, number, or date, as applicable, sufficient to enable the record to be identified and located, whether or not copying is requested. If requested either by the requestor or the official in charge of the Information Center, SSA Form 1723 may be used as a receipt for any transaction.

ulations. Denials of written requests shall be in writing. Oral requests may be dealt with orally, but if the requestor is dissatisfied with the disposition of such a request he shall be asked to put the request in writing. A written denial will inform the requestor that he may seek a review by the Commissioner of Social Security. A request for review must be in writing and signed by the requestor and shall include a copy of the written request and the denial. It must be filed within 30 days of the date on which he receives the initial written denial, and may be filed at any BFCU Regional Office or at BFCU headquarters.

(b) The Commissioner or his designee shall, when a request for a review has been filed, review the decision in question, upon the basis of the evidence considered in connection with the decision and whatever other evidence and written argument is submitted by the person requesting the review. Decisions on review shall be in writing. If the decision is in favor of the requestor, the decision shall order the records made available to the requestor as provided in the decision. The decision, if adverse to the requestor, shall briefly state the reasons for the decision, and shall be promptly communicated to the requestor, and shall constitute final action of the Department.

(c) Where the Commissioner or his designee upon review affirms the denial of a request for records, in whole or in part, the requestor may seek court review by instituting a civil action in the district court of the United States pursuant to 5 U.S.C. 552 (a) (3).

§ 320.5 Exempted material.

Certain records may be exempted from disclosure under Public Law 90-23, 5 U.S.C. 552, and the Department's regulations thereunder.