Code of the District of Columbia

§ 26–506.11. Reduction in membership shares.

(a) The board of directors of a District credit union may propose a reduction in membership shares when the losses of the District credit union resulting from a depreciation in value of its loans, investments, or otherwise exceed the District credit union's undivided earnings and reserves so that the estimated value of the District credit union's assets is less than its liabilities, and the board of directors determines that the District credit union may be subject to involuntary liquidation. The District credit union may, by a majority vote of those voting on the proposition, order a reduction in the membership shares, and of each of its shareholders, to divide the loss in proportion to the shares held by shareholders in their respective membership share accounts ("order of reduction").

(b) If the District credit union thereafter realizes a greater amount from its assets than what was fixed by the order of reduction, the excess shall be proportionately restored to the shareholders whose assets were reduced, but only to the extent of the reduction.

(c) Deposit accounts and regular share accounts shall not be subject to a reduction in shares pursuant to this section.