This law explains how a credit union in California can dissolve. First, the board of directors must recommend dissolution with a majority vote. Then, at a meeting called specifically for this purpose, the credit union members can approve the dissolution by majority vote or written consent.

Even if not all members approve, the commissioner might still approve the dissolution if members were properly notified and a majority of those voting support it. Importantly, if the board votes for dissolution, the credit union must stop making loans and processing share or fund withdrawals until members decide.

If a credit union decides to dissolve, its board of directors must either choose a three-person committee or appoint a liquidating agent to handle its assets. If the commissioner is chosen as the liquidating agent, they can either manage the process themselves or assign another party, like the National Credit Union Administration, to do so. When the commissioner is the liquidating agent, the credit union must give up its certificate to operate as a credit union.

This section explains that when a credit union decides to close and dissolve, certain officials or the liquidating person must sign a certificate confirming this decision. They need to state how they reached the decision, and then file this certificate with the Secretary of State. Copies of this filed certificate, certified by the Secretary of State, must also be sent to the financial commissioner.

This law states that either the committee responsible for overseeing liquidation or the liquidating agent has the authority to take legal action on behalf of a credit union. They can also sell or otherwise handle the credit union's assets, either all at once or in parts, through public or private sales.

Once a credit union has paid off all its known debts, the committee or agent handling the liquidation will divide the leftover assets among the members or shareholders. These assets are distributed based on how much each person has invested in their shares.

This law states that after a credit union finishes closing down, pays off all known debts and distributes its assets, a majority of its liquidation committee or agent must sign a certificate. This certificate confirms that all debts are settled, taxes paid, assets distributed, and that the credit union is officially dissolved.

This section requires that the certificate of dissolution must be filed with the Secretary of State. Certified copies of the certificate are then filed with the commissioner.

During the process of closing down a credit union, the person or group handling the liquidation can be replaced by the commissioner at their discretion. Afterward, the commissioner can take over the liquidation process or choose someone else to finish closing the credit union.

If a credit union doesn't have enough assets to fully repay its shareholders when it decides to dissolve, it won't be responsible for paying the administrative costs outlined in another section of the law.