(1) A director, an officer, or an employee of a credit union who is found by the department of administration, after examination, to be negligent, dishonest, reckless, or incompetent or to have violated the provisions of this part must be removed from office by the supervisory committee of the credit union on the written order of the department.
(2) If the directors neglect or refuse to remove the director, officer, or employee and any losses accrue to the credit union by reason of the negligence, dishonesty, recklessness, or incompetency of the director, officer, or employee, the department's written order is conclusive evidence of the negligence of the directors' failure to act as required in subsection (1) in any action brought against the board of directors by a member of the credit union for recovery of losses.
(3) If the supervisory committee refuses to remove the director, officer, or employee on order of the department, the supervisory committee may file a request for hearing pursuant to the Montana Administrative Procedure Act.