1. Any banking institution, credit union, or financial institution authorized by the commissioner to engage in the business of banking under the laws of this state, laws of the United States, or laws of another state may be converted into a cooperative financial institution.

2. A cooperative financial institution may convert to a federal savings association by complying with the following requirements: a. The proposition for conversion must be approved by a majority of the directors of the organization that seeks conversion. If approved by a majority of the directors, the directors shall set a date for a vote by the members either at a meeting or by written ballot to be filed on or before the date. Written notice of the proposition and the date set for the vote must be delivered in person to each member or mailed to each member at the address for the member appearing on the records of the organization, between seven and thirty days before the date. Conversion must be approved by two-thirds of the members participating in the vote. b. Each member of the credit union is entitled to one vote during regular or special meetings of the membership. c. The voting rights for a banking institution or financial institution are determined by applicable law. d. Forty-five days before consideration of a conversion, the membership or board acting on the proposed change must be notified of the bylaw change under consideration and of the date and time of the meeting the change will be acted on. e. Promptly after the vote is taken, but no more than ninety days after, if the proposition for conversion was approved, the organization seeking conversion shall provide the state banking board with the results of the vote, verified by the affidavits of the president or vice president and secretary. f. A cooperative financial institution converting to a federal savings association shall provide notice of completion of subdivisions a, b, c, d and e, and may not be subject to any other provision of this chapter. The converted cooperative financial institution shall provide notice to the state banking board upon commencement of operations as a federal savings association, at which time the state charter must be terminated.

3. If a cooperative financial institution converts to a state-chartered credit union, the institution shall: a. Obtain federal deposit insurance. b. File with the commissioner an organization certificate as required in section 6-06-02 and all other documentation necessary as determined by the commissioner. c. Obtain approval from the state credit union board.