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Sec. 5. (a) A credit union may convert to a mutual bank with the approval of the department and, if required by law, the appropriate federal agency.

(b) The department shall prescribe procedures for mutual bank conversions. The procedures must require the following:

(1) The credit union must prepare and submit to the department a plan of mutual bank conversion that:

(A) provides the terms and conditions of the mutual bank conversion as required by the department;

(B) complies with any federal requirements for conversion; and

(C) provides for a two (2) year period after conversion that a director or employee of the credit union may not acquire stock in the resulting institution or a successor institution on terms other than those readily available to all members of the former credit union.

(1) The credit union must prepare and submit to the department a plan of mutual bank conversion that:

(A) provides the terms and conditions of the mutual bank conversion as required by the department;

(B) complies with any federal requirements for conversion; and

(2) The credit union must submit evidence with the conversion plan that is satisfactory to the department proving that:

(A) the credit union has applied for deposit insurance from the Federal Deposit Insurance Corporation or its successor in interest; and

(B) upon conversion, the deposits in the resulting mutual bank will be insured by the Federal Deposit Insurance Corporation.

(2) The credit union must submit evidence with the conversion plan that is satisfactory to the department proving that:

(A) the credit union has applied for deposit insurance from the Federal Deposit Insurance Corporation or its successor in interest; and

(B) upon conversion, the deposits in the resulting mutual bank will be insured by the Federal Deposit Insurance Corporation.

(3) The plan of mutual bank conversion is conditioned upon the approval of at least a majority of the total number of votes cast at a regular or special meeting of the membership.

(4) Notice of the meeting must be delivered in person to each member or mailed to each member not more than thirty (30) days but not less than fourteen (14) days before the date of the meeting.

(1) The date, time, and location of the meeting.

(2) A description of the matters to be voted upon at the meeting.

(3) A ballot that contains:

(A) two (2) voting options:

(i) a vote to approve the conversion; and

(ii) a vote to disapprove the conversion; and

(B) a notice that the member has the right to vote either by mail ballot or at the meeting.

(4) A disclosure that:

(A) the board of directors of the credit union has proposed that the credit union convert to a mutual savings bank charter;

(B) the conversion could shift voting rights from each member having one (1) vote to a certain number of shares qualifying for one (1) vote;

(D) a mutual savings bank can convert to a stock savings bank;

(E) upon conversion, the credit union will lose its federal tax exempt status;

(F) members may vote by mail ballot or in person at the meeting; and

(G) the complete application and proposal for the conversion are available for inspection at the credit union’s offices during normal business hours.

(d) The board of directors of the converting credit union shall certify the results of the membership vote to the department within ten (10) days after the vote is taken.

(e) Upon the approval of a plan of mutual bank conversion by the board of directors of the credit union, the plan of mutual bank conversion and a certified copy of the resolution of the board of directors approving the plan of mutual bank conversion must be submitted to the department and, if required, the appropriate federal agency for approval.

(f) The credit union shall provide the department with additional relevant information concerning the plan of mutual bank conversion as requested by the department.