§ 16103 Foreign Credit Union Assets

• •A foreign credit union with a local office may be ordered to keep that office’s assets separate.
• •Creditors of the local office get priority over other creditors for those assets.
• •The rule only applies to the assets of the office that is inside the state.

A credit union from State X opens a branch in our state. The state commissioner tells the credit union to keep the branch’s cash and loans in a separate account. Later the branch can’t pay all its bills, and the people it owes money to (like suppliers) get paid before any other creditors of the credit union.

Because the commissioner ordered the money to be kept separate, the branch’s assets are isolated. Those who are owed money by the branch have the first right to those assets, ahead of other creditors of the whole credit union.