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OCC Bulletin 2021-45 | September 24, 2021

Mutual Savings Associations: Requirements and Process for Voluntary Liquidation


Chief Executive Officers of All Federal Mutual Savings Associations; All Examining Personnel; and Other Interested Parties


This bulletin provides an overview of the regulatory requirements and process that the Office of the Comptroller of the Currency (OCC) uses to review a voluntary liquidation of a mutual federal savings association (mutual FSA). Voluntary liquidation is the process by which a mutual FSA that has decided to close, without being sold to another owner or merged with another entity, winds down its operations and ceases to exist by terminating its charter.1

Note for Community Banks

The requirements and process set forth in this bulletin are applicable to all mutual FSAs.


  • Voluntary liquidations of mutual FSAs are infrequent transactions and must comply with the requirements of 12 CFR 5.48.
  • The determination to pursue a voluntary liquidation is a business decision by a mutual FSA's board of directors, subject to nonobjection by the OCC and the member approval requirement.
  • A mutual FSA considering a voluntary liquidation must submit a preliminary notice of voluntary liquidation2 to the OCC.
  • Following the determination by the board of directors to voluntarily liquidate, the mutual FSA must submit a plan of liquidation to the OCC that addresses, among other things, the rights of the members, i.e., depositors, certain borrowers, and any other stakeholders.
  • The OCC reviews the plan of liquidation and the relevant factors, including the purpose of the liquidation and its impact on the safety and soundness of the mutual FSA and on its depositors, creditors, and customers.
  • The OCC must provide its nonobjection before the mutual FSA may hold the meeting of its members to vote on the plan of liquidation.
  • The members of the mutual FSA vote on the plan of liquidation at a legal meeting in accordance with its charter and bylaws.
  • Following the member approval of the plan of liquidation, the mutual FSA must file a notice with the OCC and provide notice to depositors and known creditors or claimants upon commencing voluntary liquidation.


Voluntary liquidations involving a mutual FSA present significant policy and legal issues because of the mutual organizational structure and the OCC's interest in ensuring the protection of mutual members' rights. A voluntary liquidation of a mutual FSA is rare, and the OCC considers all information the mutual FSA provides in filings with the OCC.

Summary of Requirements and Process

The Home Owners' Loan Act3 authorizes the OCC to prescribe regulations for, among other things, the liquidation of FSAs. The determination to voluntarily liquidate is a business decision in the discretion of a mutual FSA's board of directors.

The OCC has published a regulation that describes the requirements for voluntary liquidation in 12 CFR 5.48, "Voluntary Liquidation of a National Bank or Federal Savings Association." A mutual FSA must comply with the requirements in the regulation, including requirements that are specific to mutual FSAs. Mutual FSAs may not use the expedited process available for certain voluntary liquidations.4

The process of a voluntary liquidation varies depending on the circumstances, but generally includes a decision of the board of directors to consider voluntary liquidation; submission of a preliminary notice to the OCC detailing plans to liquidate; approval of the plan of liquidation by the mutual FSA's board of directors; submission of a board-approved plan of liquidation to the OCC for review; nonobjection to the plan of liquidation by the OCC; approval of the plan of liquidation by the mutual FSA's members; submission of a notice to the OCC upon commencing liquidation; transfer, sale, or liquidation of the mutual FSA's assets; transfer, sale, or payment of any deposits and liabilities, including contingent liabilities; and a final distribution of the remaining capital to the members.5

A mutual FSA must submit to the OCC a preliminary notice of its intent to liquidate, as required by 12 CFR 5.48(e)(1), and may request confidential treatment, as described in the notice. If the mutual FSA's board of directors decides to proceed with the liquidation, it must submit the plan of voluntary liquidation to the OCC for its review and nonobjection as required by 12 CFR 5.48(e)(2). The mutual FSA may not proceed with the liquidation until it receives the OCC's nonobjection to the plan of liquidation.6 The OCC reviews the plan of liquidation to determine

  • the purpose of the liquidation;
  • its impact on the safety and soundness of the mutual FSA; and
  • its impact on the mutual FSA's depositors, creditors, and customers.7

Plan of Liquidation

The plan of liquidation submitted by a mutual FSA should include the alternatives considered by the board of directors as well as any contacts with potential merger partners or acquirers. Examples of alternatives to a liquidation include a merger into another mutual, a merger into the stock subsidiary of a mutual holding company, and a mutual to stock conversion. The board of directors of the mutual FSA generally considers whether a mutual to stock conversion is cost prohibitive and is therefore not a viable option. The OCC assesses the advisability of, and alternatives to, liquidation and the effect of liquidation on all concerned.8 The board of directors of the mutual FSA should demonstrate that the board has considered all reasonably available alternatives in the plan of liquidation it submits to the OCC. As part of its review of the application, the OCC independently assesses whether the board has considered alternatives before providing nonobjection to the liquidation plan.

The plan of liquidation should describe the steps that will be taken to obtain the required member approval of the liquidation,9 a description of the status of employees during the liquidation, and any compensation to be paid to the employees. The OCC reviews the plan to consider whether it presents any conflicts of interest for the members of the board of directors or management of the mutual FSA10 or whether there is unjust insider enrichment that should be addressed.

In evaluating a plan of liquidation, the OCC reviews all facts and circumstances in the information provided by the mutual FSA including the board of directors' statement that the plan of liquidation is the best business decision for all concerned. The OCC analyzes the totality of the facts to determine that there is a substantial basis for concluding that it will not object to the dissolution, and the plan has identified and sufficiently provided for the interests of all concerned.11 The OCC generally has construed the phrase "all concerned" to be broadly inclusive, comprising depositors, creditors, plaintiffs in any pending lawsuits, and others.

The OCC must provide its nonobjection to the plan of liquidation before the members' meeting to vote on the plan.12 Liquidation must be approved by a vote of the board of directors and approved by vote of the members cast at a legal member meeting.13 The mutual FSA should provide a notice of the members' meeting to the members in accordance with the mutual FSA's bylaws. The commencement of the liquidation must be after the affirmative vote of the members and the notice of voluntary liquidation is filed with the OCC.14


When the board of directors and the members have voted to voluntarily liquidate, the mutual FSA must submit a Notice Upon Commencing Voluntary Liquidation to the OCC and must notify its depositors, other known creditors, and any known claimants.15

The public notice requirements of 12 CFR 5.8 do not generally apply to a voluntary liquidation of a mutual FSA. However, upon commencing liquidation, a mutual FSA must publish notice if directed by the OCC.16

A liquidating mutual FSA appoints a liquidating agent or committee to carry out the plan of liquidation. There is no specific requirement that a mutual FSA's agent or committee post a suitable bond. The OCC monitors the mutual FSA's progress as the liquidation proceeds to confirm that the mutual FSA is liquidating in accordance with its liquidation plan and to ensure compliance with legal requirements. If the mutual FSA intends to significantly deviate from the approved liquidation plan, the OCC expects the mutual FSA to submit an amendment to the liquidation plan and receive prior written OCC nonobjection to the amendment. The OCC may perform examinations or field investigations of the mutual FSA until the liquidation is complete.

When the liquidation is complete, the mutual FSA's liquidating agent submits the Final Report of Liquidation to the OCC.17 The final report should include the effective date of the mutual FSA's dissolution and notify the OCC of the arrangements made for retention of key bank records and the OCC's access to those records. At this time, the mutual FSA should return to the OCC any trust authority approval letter(s), branch authorizations or certificates, and its charter certificate.18

After receipt of the final report, the OCC provides an acknowledgement letter indicating that the mutual FSA has ceased operations and terminates the mutual FSA's charter. For specific steps involved in this process, refer to the "Termination of Federal Charter" booklet in the Comptroller's Licensing Manual.

Further Information

Please contact Karen Marcotte, Director of Licensing Activities, at (202) 649-6260 or


Stephen Lybarger
Deputy Comptroller for Licensing

Related Link

1 The OCC plans to make corresponding updates to the "Termination of Federal Charter" booklet of the Comptroller's Licensing Manual to clarify and provide greater transparency regarding how the OCC reviews filings by OCC-supervised national banks and federal savings associations to terminate their charters. The revisions will include additional detail about the voluntary liquidation process for mutual FSAs, as well as other transactions that result in the termination of a mutual FSA charter.

2 All forms referred to in this bulletin can be found on as part of the Comptroller's Licensing Manual.

3 12 USC 1464(d)(3)(A)

4 12 CFR 5.48(f)(1)

5 In addition to the process described, a mutual FSA should consult the Federal Deposit Insurance Corporation early in the process to determine the timing of required filings and necessary approvals.

6 12 CFR 5.48(e)(2)(ii)

7 12 CFR 5.48(d)(1)

8 12 CFR 5.48(d)(3)

9 12 CFR 5.48(e)(3)(i)

10 See 12 CFR 163.200

11 See 12 CFR 5.48(d)(1) and 5.48(d)(3)

12 12 CFR 5.21(e)

13 12 CFR 5.21(e) and 5.48(e)(3)(i)

14 12 CFR 5.21(e)

15 12 CFR 5.48(e)(3)(i)

16 12 CFR 5.48(e)(3)(iii)

17 12 CFR 5.48(e)(6)

18 Id.