(1) The office may appoint the National Credit Union Administration as conservator over a credit union to take possession and control of the property, assets, and business of its member credit union and to operate it subject to the directions of the office whenever: (a) The office finds that the credit union:
1. Is engaging or has engaged in an unsafe or unsound practice;
2. Is violating or has violated any provision of this chapter; or
3. Is violating or has violated any commission rule, office order, or written agreement entered into with the office,
in such a manner that the credit union is threatened with imminent insolvency.
(b) A majority of the members of the board of directors of the credit union have been removed by the office or the National Credit Union Administration or have resigned.
(c) The credit union is significantly undercapitalized and has no reasonable prospect of becoming adequately capitalized. The commission may define by rule criteria for determining if a credit union is undercapitalized or adequately capitalized. In defining such criteria, the commission shall consider the definitions contained in s. 216, the Federal Credit Union Act, codified at 12 U.S.C. s. 1790d.
(2) Except when prohibited by federal or state law, in the event of conservatorship, the conservator may appoint the board of directors and the operating committees and may, without penalty or liability, prepay any deposit accounts; terminate any contracts or agreements with employees, independent contractors, or consultants; terminate any contract or agreement with any person to provide goods, products, or services if the performance of such contract would adversely affect the safety or soundness of the credit unions; and terminate or assign any lease for property. The authority of the conservator to continue operation of a credit union shall continue for a period not to exceed 180 days, unless extended by the office for an additional period or periods, not to exceed 180 days each, at the request of the conservator, or unless involuntary liquidation proceedings have been initiated by the office. In the event that the conservator does assume control pursuant to the direction of the office, a meeting of the credit union shall be called within 180 days, or within the period of extension as approved by the office, for the specific purpose of electing a new board of directors, who shall take office when the conservator surrenders control, or considering such other recommendations as the conservator and the office make.