Usa Alabama

USA Statutes : alabama
Title : Title 05 BANKS AND FINANCIAL INSTITUTIONS.
Chapter : Chapter 16 SAVINGS AND LOAN ASSOCIATIONS.
Section 5-16-1

Section 5-16-1
Short title.

This chapter may be cited as the 'Savings and Loan Act.'



(Acts 1939, No. 459, p. 616, §1.)Section 5-16-10

Section 5-16-10
Corporate name and offices — Change of location of home office; certificate of approval, etc.

Whenever the commissioner shall receive from any association an application for approval of change of location of its home office, he shall first determine whether the association has complied with the provisions of Section 5-16-9; and, if he shall so find, he shall inquire into the advisability of approving such application, and he shall thereupon approve or disapprove such application. If he shall approve the application, his certificate of approval shall be substantially in the form provided in Section 5-16-49. If he shall not approve the application, the association may appeal to the board. If the board approves the application, the commissioner shall issue his certificate of approval; provided, however, no savings and loan association shall change the location of its home office to a location outside of the municipality in which it is located.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §246.)Section 5-16-11

Section 5-16-11
Corporate name and offices — Establishment of branch offices.

No association shall establish or maintain a branch office either in the municipality in which it is located or at locations outside of such municipality, except as has been heretofore or which may hereafter be provided by local laws or general laws of local application.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §247.)Section 5-16-12

Section 5-16-12
Period for commencement of business; forfeiture of corporate existence for nonuse.

Any association which shall not commence business within six months after the date upon which its corporate existence shall have begun shall forfeit its corporate existence, unless the commissioner before the expiration of such six-month period shall have approved the extension of time within which it may commence business, upon a written application therefor stating the reasons for such delay. No such extension shall be granted after the lapse of such six-month period. Upon such forfeiture, the certificate of incorporation shall expire and all action taken in connection with the incorporation thereof, except the payment of the incorporation fee, shall become void. Amounts paid on accounts, less expenditures authorized by law, shall be returned pro rata to the respective investors.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §217.)Section 5-16-13

Section 5-16-13
Rights, privileges, etc., of members; annual meeting; annual financial statement; voting by members; assessment of fines and penalties against members; transfer of real estate security by borrowing member.

(a) The rights, privileges and powers and the duties and liabilities of members of an association are fixed by the bylaws provided for in this chapter.

(b) An annual meeting of the members of each association shall be held in the month of January, as fixed in the bylaws of such association.

(c) Every association shall prepare and publish annually in the month of January in a newspaper of general circulation published in the English language in the county in which the home office of such association is located and shall deliver to each member upon application therefor a statement of its financial condition, in the form prescribed or approved by the commissioner.

(d) All account holders of record and all borrowers from the association shall be members thereof. Any person, including an adult individual, male or female, single or married, a partnership, association and corporation, may be a borrower from the association, provided such person has full legal power to contract for the payment of the loan under the laws of this state.

(e) In the determination of all questions requiring action by the members, each account holder shall be permitted to cast one vote for each $50.00, or fraction thereof of the participation value of his account. A borrowing member shall be permitted, as a borrower, to cast one vote and also to cast the number of votes to which he is entitled as an account holder. No member, however, shall cast more than 50 votes. Voting may be by proxy, provided the proxy instrument authorizing the proxy to vote shall have been executed in writing by the member and shall have been executed not more than six months prior to the meeting of members. Any number of members present at a regular or special meeting of members constitutes a quorum. A majority of all votes cast at any meeting of members shall determine any question. The members who shall be entitled to vote at any meeting of the members shall be those owning accounts of record and borrowing members of record at the end of the calendar month next preceding the date of the meeting of members, except those who have ceased to be members. The number of votes of each member shall be determined by the participation value of his account on such record date.

(f) The association shall not charge any member any sum of money by way of fine or penalty for any cause; except, that a reasonable charge may be made against borrowers for defaults or prepayments.

(g) A borrowing member obligated upon a real estate loan shall remain a member of the association, even though he shall have transferred the real estate security subject to the real estate loan, so long as such borrowing member remains obligated upon the real estate loan; provided, however, that the association may, at the request of such borrowing member and the transferee of such real estate security, transfer such membership to any transferee of such real estate security who is obligated on the real estate loan.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §219.)Section 5-16-14

Section 5-16-14
Directors, officers and employees.

(a) The rights, privileges and powers and the duties and liabilities of all directors and officers of an association are to be as fixed by the bylaws and this chapter. The business of the association shall be managed by a board of directors of not less than five nor more than 15 as determined and elected by ballot from among the members by a plurality of the votes of the members. In order to qualify as a director, a member of an association must hold an account, the participation value of which is at least $500.00; provided, that if the assets of the association exceed $500,000.00, such member must hold an account the participation value of which is at least $1,000.00; and, provided further, that if the assets exceed $2,500,000.00, the participation value of such account must be at least $2,000.00. A director shall cease to be a director when he ceases to be a member or when the net equity above loans of all accounts of the association held by him aggregate less than the minimum required to be eligible for election as a director, and his office shall automatically become vacant; provided, that no action of the board of directors shall be invalidated through the participation of such director in such action. At the first annual meeting, the directors shall be divided into three classes of as nearly equal numbers as possible. The term of office of directors of the first class shall expire at the annual meeting next ensuing the first election, of the second class, one year thereafter and of the third class, two years thereafter, and at each annual election thereafter directors shall be chosen for a full term of three years to succeed those whose terms expire. The number of directors within the limits hereinabove specified may be subsequently increased only by vote of the members. If the members fail to elect a director to fill each vacancy created by any such increase, the directors may fill such vacancy by electing a director to serve until the next annual meeting of the members, at which time a director shall be elected to fill the vacancy for the unexpired term for the class of director in which such vacancy exists. Whenever under the provisions of this section the number of directors is changed and vacancies caused by such change are filled, the directors so elected shall be classified in accordance with the provisions of this section, so that each of the three classes shall always contain as nearly equal numbers as possible. If any vacancy shall occur among the directors by reason of death, resignation or removal, such vacancy not previously filled by the board of directors may be filled by the members at any meeting held during the existence of such vacancy, and no prior notice of such election need be given. The existence of such vacancy, however, does not require the calling of a special meeting of members, unless there shall be a written request for such meeting by members holding of record at least one tenth of the capital of the association. Any vacancy among the directors not so filled by the members may be filled by a majority vote of the remaining directors, though less than a quorum, by electing a director to serve until the next annual meeting of the members, at which time a director shall be elected to fill the vacancy for the unexpired term for the class of director in which such vacancy exists.

(b) All directors, officers and employees of an association having control of or access to moneys or securities of such association shall, before entering upon the performance of any of their duties, execute their individual bonds with adequate corporate surety payable to the association as an indemnity for any pecuniary loss the association may sustain of money or other property by or through any fraud, dishonesty, forgery or alteration, larceny, theft, embezzlement, robbery, burglary, holdup, wrongful or unlawful abstraction, misapplication, misplacement, destruction or misappropriation or any other dishonest or criminal act or omission or infidelity to duty of or by any such director, officer, employee or agent. Associations which employ collection agents who for any reason are not covered by a bond as hereinabove required shall provide for the bonding of each such agent in an amount equal to at least twice the average monthly collections of such agent. Such agents shall be required to make settlement with the association at least monthly. No bond coverage will be required of any agent which is a bank insured by the Federal Deposit Insurance Corporation or an institution insured by the Federal Savings and Loan Insurance Corporation. The amounts and form of such bonds and the sufficiency of the surety thereon shall be approved by the board of directors and by the commissioner. In lieu of individual bonds, a blanket bond, protecting the association from loss through any such act or acts on the part of any such director, officer or employee shall be obtained if required by the commissioner. A true copy of all bonds of directors, officers, employees and agents shall be filed at all times with the commissioner. Such bonds shall provide that a cancellation thereof either by the surety or by the insured shall not become effective unless and until 10 days' notice in writing shall have first been given to the commissioner, unless he shall earlier approve such cancellation.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §220; Acts 1943, No. 107, p. 107.)Section 5-16-15

Section 5-16-15
Books, records and accounts.

Every association shall keep at the home office correct and complete books of account and minutes of the proceedings of members, directors and the executive committee. Complete records of all business transacted shall be maintained at the office. Every association shall use such forms and observe such accounting principles and practices as are approved by the commissioner. Every association shall close its books at the close of business on June 30, and December 31, of each year, which dates are termed in this chapter the 'semiannual closing dates.' No association by any system of accounting or any device of bookkeeping shall, either directly or indirectly, enter any of its assets upon its books in the name of any other person, partnership, association or corporation or under any title or designation that is not truly descriptive of such assets. The commissioner, after a determination of value approved by the Savings and Loan Board, may order that assets in the aggregate, to the extent that such assets have depreciated in value, be charged off or that a special reserve or reserves equal to such depreciation in value be set up by transfers from undivided profits. The bonds or other interest-bearing obligations purchased by an association shall not be carried on its books at more than the actual cost thereof. An association shall not carry any real estate on its books at a sum in excess of the total amount invested by such association on account of such real estate, including advances, cost and improvements but excluding accrued but uncollected interest. Every association shall appraise each parcel of real estate at the time of acquisition thereof. The commissioner may require the appraisal of real estate securing loans which are delinquent more than six months. The report of each such appraisal shall be submitted in writing to the board of directors and shall be kept in the records of the association. Every association shall maintain membership records, which shall show the number of each membership certificate issued, the name and address of the member to whom issued, whether the member is an account holder or a borrower or an account holder and a borrower, the date of issue thereof, the name and address of each transferee of each membership certificate and the date of transfer.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §221.)Section 5-16-16

Section 5-16-16
Capital and accounts.

(a) The capital of an association is not limited and shall consist of the aggregate of payments on accounts by its members, plus dividends credited to such accounts, less redemption and repurchase payments. It shall be accumulated only by payments by investors and earnings on accounts as provided in this chapter. The value of the participation in the capital of each account held by a member (hereinafter termed the 'participation value') shall be the aggregate of payments upon such account, plus dividends credited thereto, less redemption and repurchase payments. Except as limited by the board of directors from time to time, a member may make payments on accounts in such amounts and at such times as he may elect. Accounts may be issued for cash or property in which the association is authorized to invest and, in the absence of fraud in the transaction, the value of the property taken in payment therefor, as determined by the board of directors, shall be conclusive. The members of an association shall not be responsible for any losses which its capital shall not be sufficient to satisfy, and the accounts shall not be subject to assessment, nor shall the account holders be liable for any unpaid installments on their accounts. Dividends shall be declared in accordance with the provisions of this chapter. Except as to accounts of $5.00 or less, no association shall prefer one of its accounts over any other account as to the right to participate in dividends as to time or amount. No preference between account holders shall be created with respect to the distribution of assets upon the voluntary or involuntary liquidation, dissolution or winding up of an association. No association shall have power to contract with respect to the capital or participations in the capital in a manner inconsistent with the provisions of this chapter.

(b) Each account shall be represented by the account of each account holder on the books of the association, and each account holder shall receive an account book containing a membership certificate in the form prescribed in this chapter and evidencing the participation value of the account. A separate certificate for an account, in form prescribed in this chapter, may be issued in lieu of an account book entitled 'Certificate of Account.' Accounts may be purchased and held absolutely by, or in trust for, any person, including an adult or minor individual, male or female, single or married, a partnership, association and corporation. Accounts shall be transferable only upon the books of the association and upon proper application by the transferee and the acceptance of the transferee as a member upon terms approved by the board of directors. The association may treat the account holder of record on the books of the association as the owner for all purposes without being affected by any notice to the contrary, unless the association waives in writing its statutory lien in whole or in part in favor of a pledge.

(c) The following form of certificate evidencing ownership of an account is hereby prescribed for use by all associations to appear in the account book issued to each such account holder, which shall be identified by number and bear the date of issuance:

'This certifies that _______ is a member of the undersigned and holds an account therein, subject to the savings and loan laws, the certificate of incorporation and bylaws of the undersigned.'

(d) The following forms of certificate evidencing ownership of an account is hereby prescribed for use when desired in lieu of an account book by all associations to appear on the certificate of account issued to each such account holder:

'This certifies that _______ is a member of the undersigned and holds a _______ dollar account therein, subject to the savings and loan laws, the certificate of incorporation and bylaws of the undersigned.'

(e) The following form of certificate evidencing membership of a borrower is hereby prescribed for use by all associations to appear in the borrower's membership book:

'This certifies that _______ is a member of, and holds a loan from, the undersigned, subject to the savings and loan laws, the certificate of incorporation and bylaws of the undersigned.'



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §222.)Section 5-16-17

Section 5-16-17
Reserve accounts; interest due and accrued account.

Every association shall set up and maintain the reserve required by and may set up and maintain such additional reserves as are permitted by this chapter. On the semiannual closing dates after payment of or provisions for all expenses, each association shall, before the declaration of a dividend for the semiannual period, transfer to a separate reserve account, which shall be set up and maintained for the sole purpose of absorbing losses, termed in this chapter 'general reserve,' an amount equal to five percent of its net earnings until such general reserve is equal to 10 percent of its capital. If and whenever the general reserve is not equal to 10 percent of its capital, semiannual credits as above provided shall again be made to the general reserve until it shall again be equal to 10 percent of its capital. With the approval of the commissioner, the board of directors may make additional transfers to other reserve accounts. If an association adopts a bonus plan or plans, it shall maintain the required bonus reserve. Interest receivable on all loans shall be accrued monthly, and an interest due and accrued account shall be maintained equivalent to all accrued and uncollected interest. The books and records of every association shall reflect all accrued liabilities.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §223.)Section 5-16-18

Section 5-16-18
Undivided profits account.

On each semiannual closing date, after payment or provision for all expenses and appropriate transfers to reserves, the remainder of net earnings for the half calendar year shall be credited to the undivided profits account.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §224.)Section 5-16-19

Section 5-16-19
Dividends.

As of June 30, and December 31, in each year, the board of directors shall declare a dividend payable on July 1, and January 1, of each year, respectively or, if either such date shall be a legal holiday, on the next succeeding business day. No dividends shall be declared except dividends payable on said dividends dates. Payments of net earnings to account holders are dividends and shall not be referred to as interest. Dividends shall be credited to accounts on the books of the association on the dividend payment date unless an account holder shall have requested and the board of directors shall have agreed to pay dividends on all or part of any account in cash. Dividends payable in cash shall be paid on the dividends payment date and may be paid by check or bank draft. All account holders shall participate equally in dividends pro rata to the participation value of their respective accounts; provided, that no association shall be required to pay or credit dividends on accounts of $5.00 or less. Except as above provided, dividends shall be declared on the participation value of each account at the beginning of the dividend period, plus payments thereon made during the dividend period, less amounts repurchased and noticed for repurchase, which for dividend purposes shall be deducted from the latest previous payments thereon, computed at the dividend rate for the time invested determined as provided below. The date of investment shall be the date of the actual receipt by the association of a payment on an account, except that the board of directors may fix a date which shall not be later than the tenth of the month for determining the date of investment; provided, however, that the board of directors may permit investments of $100.00 or more to receive dividends calculated from the date of actual receipt by the association in any event. Payments on accounts, affected by such determination date, received by the association on or before such determination date, shall receive dividends as if invested on the first of the month during which such payment was made.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §225.)Section 5-16-2

Section 5-16-2
Definitions.

When used in this chapter, the following terms shall have the following meanings, respectively, unless it clearly appears from the context that some other meaning is indicated:

(1) ASSOCIATION. A savings and loan association subject to the provisions of this chapter and a federal savings and loan association incorporated pursuant to an act of Congress known as the Home Owners' Loan Act of 1933; provided, however, that the administrative provisions of this chapter shall not apply to federal savings and loan associations.

(2) BOARD. The Savings and Loan Board.

(3) CAPITAL. The aggregate of payments on accounts by members, plus dividends credited to such accounts, less redemption and repurchase payments.

(4) COMBINATION HOME AND BUSINESS STRUCTURE. A building or buildings, including residences for not more than four families, which is used in part for business purposes. The residential use of such a building must be substantial and permanent, not merely transitory. The business use may predominate.

(5) COMMISSIONER. The Savings and Loan Commissioner.

(6) DIRECT REDUCTION LOAN. A loan repayable in consecutive monthly installments, equal or unequal, beginning not later than 60 days after the date of the advance of the loan, sufficient to retire the debt, interest and principal within 20 years; provided, however, that the initial loan contract shall not provide for any subsequent monthly installment on an amount larger than any previous monthly installment; and, provided further, that in the case of construction loans the first payment shall not be later than six months after the date of the first advance. Any such loan is an amortized loan.

(7) GROSS INCOME. The sum for an accounting period of the following:

a. Operating income;

b. Real estate income;

c. All profits actually received during such accounting period from the sale of securities, real estate or other property;

d. Other nonrecurring income.

(8) HOME. A dwelling or dwellings for not more than four families. A property does not cease to be a home because of the incidental use of it for minor business purposes so long as the principal use of the property is for residence purposes. A home on a farm is a home.

(9) HOME LOAN. A real estate loan when the security is home property.

(10) HOME PROPERTY. Real estate on which there is located, or will be located pursuant to a home loan, a home or a combination home and business structure.

(11) IMPAIRMENT OF CAPITAL. That the assets of an association do not have an aggregate value, in the judgment of the board of directors or the commissioner, equal to the aggregate amount of liabilities of the association to its creditors and members and all other persons.

(12) IMPROVED REAL ESTATE. Real estate, other than land in a state of nature or wild land, on which there is a structure or an enclosure which is cultivated, reclaimed, used for the purpose of agriculture in any form or otherwise occupied, made better, more useful or of greater value by care so as to produce an enjoyment thereof.

(13) INSURED ASSOCIATION. An association insured by the Federal Savings and Loan Insurance Corporation created under Title IV of the National Housing Act.

(14) MEMBER. A person owning an account of an association, evidenced by a membership certificate issued in the name of such person, or a person borrowing from an association and holding a membership certificate issued in the name of such borrower.

(15) NET EARNINGS. Gross income for an accounting period less the aggregate of the following:

a. Operating expenses;

b. Real estate expenses;

c. All losses actually sustained during such accounting period from the sale of securities, real estate or other property, or such portion of such losses as shall not have been charged to reserves, pursuant to the provisions of Section 5-16-17;

d. All interest paid, or due but unpaid, on borrowed money; and

e. Other nonrecurring charges.

(16) NET EARNINGS AVAILABLE FOR DIVIDENDS. Net earnings for an accounting period less amounts transferred to reserves as provided in Section 5-16-17.

(17) OPERATING EXPENSES. All expenses actually paid, or due but unpaid, by an association during an accounting period, excluding the following:

a. Real estate expenses;
b. Interest on borrowed money; and
c. Other nonrecurring charges.
That portion of prepaid expenses not apportionable to the period may be excluded from operating expenses, in which event operating expenses for future periods shall include that portion of such prepaid expenses apportionable thereto.

(18) OPERATING INCOME. All income actually received by an association during an accounting period, excluding the following:

a. Real estate income; and

b. Other nonrecurring income.

(19) OTHER REAL ESTATE LOAN. A real estate loan when the security is improved real estate other than home property.

(20) PARTICIPATING VALUE. The aggregate of payments by a member on an account, plus dividends credited thereto, less redemption and repurchase payments thereon.

(21) REAL ESTATE EXPENSES. All expenses actually paid, or due but unpaid, in connection with the ownership, maintenance and sale of real estate, other than office building or buildings, by an association during an accounting period, excluding capital expenditures and losses on the sale of real estate.

(22) REAL ESTATE INCOME. All income actually received by an association during an accounting period from real estate owned, other than from office building or buildings, excluding profit from sales of real estate.

(23) REAL ESTATE LOAN. A loan on the security of real estate, evidenced by any form of instrument, whereby a lien is created upon such real estate for the benefit of another person or whereby title to real estate is conveyed to another person, in either case as security for the payment of an obligation to such person, or whereby title to real estate is conveyed to another person as trustee for a third person, as security for the payment of an obligation to such third person.

(24) THE REGULAR LENDING AREA. The county in which the home office of an association is located and the counties of the state or adjoining states immediately adjoining and abutting on such county and any additional area within 50 miles from the home office.



(Acts 1939, No. 459, p. 616, §1; Code 1940, T. 5, §211; Acts 1959, No. 590, p. 1477.)Section 5-16-20

Section 5-16-20
Repurchase of accounts.

Any account holder may at any time present a written application for repurchase of all or any part of his accounts. No member shall have on file in any one association more than one repurchase application at a time. Every repurchase application shall request immediate repurchase of a stated amount in accordance with this section. Any member may cancel his repurchase application at any time in whole or in part by a writing. Every association shall pay or number, date and file in the order of actual receipt every repurchase application. Repurchases shall be made in the order of actual receipt of repurchase applications, except as provided in this section. Upon repurchases, an association shall pay the value of any account, but not in excess of the participation value thereof. If an association so elects, it may at any time pay in full each and every repurchase application as presented. It shall not, however, pay some in full and not pay every repurchase application on file in full, except by paying all repurchase applications on file on the rotation plan prescribed in this section. The board of directors shall, however, have an absolute right to repurchase any application not exceeding $100.00 of any one account holder in any one month in any order. No association can obligate itself to pay repurchases on any plan other than as provided in this chapter. Account holders who have filed written applications for repurchase shall remain account holders so long as their applications remain on file and shall not become creditors. No dividends shall be declared upon that portion of an account which has been noticed for repurchase, which for dividend purposes is required to be deducted from the latest previous payments on such account, so long as such application for repurchase is on file. The rotation plan of payment of repurchase is as follows: On the first day of each month, each repurchase application which has been on file since the first day of the preceding month shall be paid $1,000.00 on account, or in full if the amount noticed for repurchase or the unpaid balance of such repurchase application is less than $1,000.00. Each such repurchase application for more than $1,000.00 so paid shall be deemed refiled as though filed on that day. Such limited payment on the first day of each month and such renumbering shall take place on the first day of each subsequent month as long as there are repurchase applications unpaid. At least one third of the receipts of an association from its members during the preceding calendar month shall be applied on the first day of each month to the payment of repurchase applications which have been on file since the first day of the preceding month. Any association may apply to repurchase a larger amount than one third of such receipts but cannot obligate itself to do so. When an application to repurchase is reached for payment as above provided, a written notice shall be sent to the applicant by mail at his last address recorded on the books, and unless the applicant shall apply in person or in writing for such repurchase payment within 30 days from the date of such notice, no payment on account of such application shall be made and such application shall be cancelled.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §226.)Section 5-16-21

Section 5-16-21
Redemption of accounts.

At any time funds are on hand for the purpose, the association shall have the right to redeem by lot, or otherwise as the board of directors may determine, all or any part of any of its accounts on a dividend date, by giving 30 days' notice by registered or certified mail addressed to the account holders at their last addresses recorded on the books of the association. No association shall redeem any of its accounts when there is an impairment of capital or when it has applications for repurchase which have been on file more than 30 days and not reached for payment. The redemption price of accounts redeemed shall be the full value of the account redeemed, but in no event shall the redemption price be less than the repurchase value. If the aforesaid notice of redemption shall have been duly given and if on or before the redemption date the funds necessary for such redemption shall have been set aside so as to be and continue to be available therefor, dividends upon the accounts called for redemption shall cease to accrue from and after the dividend date specified as the redemption date, and all rights with respect to such accounts shall forthwith, after such redemption date, terminate, except only the right of the account holder of record to receive the redemption price without interest. Unless membership certificates evidencing accounts which have been validly called for redemption shall be tendered for payment within 10 years from the date of redemption designated in the redemption notice, accounts not so tendered within such 10-year period shall be cancelled, and the interest of the holder thereof shall be forfeited to the association and the participation value of such accounts transferred to the reserves of the association; provided, that the association shall mail to each such account holder within six months and not less than three months prior to the expiration of such 10-year period a written notice, at the last address of such account holder shown on the books of the association, advising the account holder that his interests in the account called for redemption will be forfeited unless he presents his membership certificate on or before the date of such forfeiture and stating the actual date such forfeiture will become effective.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §227.)Section 5-16-22

Section 5-16-22
Issuance of duplicate membership certificates.

Upon the filing with an association by a member of record or his legal representative of an affidavit to the effect that the membership certificate evidencing his membership in the association has been lost, stolen or destroyed and that such membership certificate has not been pledged or assigned, in whole or in part, such association shall issue a membership certificate, marked on the face thereof as a duplicate, in the name of such holder of record evidencing his membership in the association; provided, however, that the board of directors may in its discretion require such member or his legal representative to furnish a bond to the association in an amount sufficient to indemnify it against any loss which might result from the issuance of such duplicate membership certificate.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §228.)Section 5-16-23

Section 5-16-23
Issuance, etc., of certificates of indebtedness; receipt of public deposits; payment of guaranteed rate of interest.

No association shall issue, sell, negotiate or advertise for sale any certificates of indebtedness or receive deposits from the public. No association shall agree to pay a guaranteed rate of interest or fixed amount in dividends upon any accounts issued by it.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §229.)Section 5-16-24

Section 5-16-24
Powers generally.

(a) Every association incorporated pursuant to or operating under the provisions of this chapter shall have all the powers enumerated, authorized and permitted by this chapter and such other rights, privileges and powers as may be incidental to or necessary for the accomplishment of the objects and purposes of the association.

(b) Every association shall have the following powers:

(1) To maintain civil actions and have civil actions maintained against it, complain and defend, in any court;
(2) To purchase, hold and convey real and personal property consistent with its objects and powers, to mortgage, pledge or lease any real or personal property and to take property by gift, devise or bequest;
(3) To have a corporate seal, which may be affixed by imprint;
(4) To appoint officers and employees as its business shall require and allow them suitable compensation;
(5) To adopt and amend bylaws as provided in this chapter;
(6) To insure its accounts with the Federal Savings and Loan Insurance Corporation and qualify as a member of a Federal Home Loan Bank;
(7) To accept savings and investments as payments on accounts as provided in this chapter;
(8) To make loans to members on the sole security of accounts. No such loan shall exceed 90 percent of the repurchase value of the accounts owned or otherwise pledged by the borrower. No such loan shall be made when an association has applications for repurchase which have been on file more than 60 days and not reached for payment;
(9) To make direct reduction home loans of any amount and secured by home property situated anywhere, subject to the following limitations:
a. No such loan shall exceed $20,000.00, except when made under the 30 percent of capital lending power;
b. No home property securing such a loan shall be situated beyond the regular lending area, except when such loan is made under the 30 percent of capital lending power; and
c. No such loan shall be made to or for the benefit of a director, an officer or employee, except when secured by home property owned and occupied by such director, officer or employee;
(10) To use an aggregate amount not exceeding 30 percent of the capital at the time of such use, or a larger amount with the approval of the commissioner, to make loans as follows:
a. Home loans of any amount, which are not direct reduction home loans; and
b. Other real estate loans, whether amortized or unamortized.
This power is herein referred to as the '30 percent of capital lending power.' A subsequent reduction of capital shall not affect in any way outstanding loans made under the 30 percent of capital lending power;
(11) To invest in securities as follows:
a. Without limit in obligations of or guaranteed as to principal and interest by the United States;
b. Without limit in obligations of Federal Home Loan Banks and in obligations of the Federal Savings and Loan Insurance Corporation; and
c. In stock of a Federal Home Loan Bank of which it is eligible to be a member;
(12) Without restriction upon the general powers of the association, to invest in:
a. Real estate whereon there is or may be erected a building or buildings for the transaction of the business of the association, from portions of which, not required for its own use, a revenue may be derived by rentals or otherwise. An association may invest in such real estate an amount representing the cost of land and improvements not exceeding the sum of its undivided profits and reserve accounts. It may, however, invest in such real estate a larger sum with the approval of the commissioner;
b. Real estate purchased at a sheriff's sale or at any other sale, public or private, judicial or otherwise, upon which the association has a lien or claim, legal or equitable;
c. Real estate accepted by the association in satisfaction of any debt;
d. Real estate purchased for sale or improvement and sale upon contracts, at the cost of land and improvements, when such contracts are executed concurrently with or prior to such purchase. Such transactions shall be subject to all the limitations provided in this chapter with respect to real estate loans;
e. Real estate acquired by the association in exchange for real estate owned by the association; and
f. Real estate acquired by the association in connection with salvaging the value of property owned by the association.

Title to all real estate shall be taken and held in the name of the association and such title shall immediately be recorded in accordance with law;

(13) To secure advance of not more than an aggregate amount equal to one half of its capital. Within such amount equal to one half of its capital, the association may borrow from sources other than the Federal Home Loan Bank an aggregate amount not in excess of 10 percent of its capital. A subsequent reduction of capital shall not affect in any way outstanding obligations for borrowed money. All such loans and advances may be secured by property of the association;
(14) To repurchase and redeem accounts in accordance with the provisions of this chapter;
(15) To pay a bonus to members in accordance with the provisions of this chapter and no other bonus;
(16) If and when an association is a member of a Federal Home Loan Bank, to act as fiscal agent of the United States and, when designated for that purpose by the Secretary of the Treasury, it shall perform, under such regulations as he may prescribe, all such reasonable duties as fiscal agent of the United States as he may require and shall have power to act as agent for any other instrumentality of the United States when designated for that purpose by any such instrumentality and as agent of the state in accordance with the laws of this state; and
(17) To dissolve, merge or reorganize in the manner provided in this chapter.

(c) In furtherance and not in limitation of the powers hereinbefore conferred, the board of directors is expressly authorized:

(1) By resolution approved by a majority of the entire board of directors, to appoint and remove members of an executive committee, composed of the president and two or more additional directors, which committee shall have and exercise the powers of the board of directors when it is not in session;
(2) By resolution, to appoint such other committees as may be deemed necessary and to fix their duties;
(3) To compensate directors as may be provided in the bylaws;
(4) To fix the salaries or other compensation of officers and employees from time to time and to delegate to any officer the powers to fix the salaries or other compensation of employees. No officer shall be prevented from receiving a salary for his services as such officer by reason of the fact that he is also a director;
(5) To extend leniency and indulgence to borrowing members who are in distress and generally to compromise and settle any debts and claims;
(6) To limit from time to time the amounts which may be accepted by the association as payments on accounts;
(7) To reject any application for membership; and
(8) To exercise any and all of the powers of the association not expressly reserved by the certificate of incorporation to the members.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §230.)Section 5-16-25

Section 5-16-25
Real estate loans.

(a) Real estate loans may be made as authorized by this chapter upon any other loan plan approved by the commissioner. No real estate loan shall be made until a qualified person selected by the board of directors shall have submitted a signed appraisal of the real estate securing such loan and until approved by the board of directors or a committee thereunto authorized by the board of directors. Payments on real estate loans shall be applied, first, to the payment of interest on the unpaid balance of the loan, the remainder to the reduction of the loan; provided, that if the loan is in default in any manner, payments may be applied by the mortgages in any manner approved by the commissioner. Every loan shall be evidenced by a note or bond for the amount of the loan. The note or bond shall specify the amount, rate of interest and terms of repayment and may contain all other terms of the loan contract. Every real estate loan shall be secured by a mortgage or other instrument constituting a first lien, or the full equivalent thereof, upon the real estate securing the loan according to any lawful or well recognized practice which is best suited to the transaction. Any such instrument, constituting a first lien, is herein termed a 'mortgage.' Such mortgage shall provide specifically for full protection to the association with respect to usual insurance risks, taxes, assessments, other governmental levies and maintenance and repairs. It may provide for an assignment of rents, which assignment shall be valid. Every such mortgage or other instrument shall create and preserve to the association a first lien, which shall equally secure the original loan and each and every subsequent advance and loan in any amount and for any purpose by the association to such borrower. No subsequent loan to such borrower by any other person shall establish an intervening lien which shall disturb the first lien of such association as security for every advance and loan made to such borrower. All such mortgages shall be recorded in accordance with the law of this state. An association may pay taxes, assessments, insurance premiums and other similar charges for the protection of its real estate loans. All such payments shall be added to the unpaid balance of the loan and shall be equally secured by the first lien on the property. An association may require life insurance to be assigned as additional collateral upon any real estate loan. In such event, the association shall obtain a first lien upon such policy and may advance premiums thereon, and such premium advances shall be added to the unpaid balance of the loan and shall be equally secured by the first lien on the property. An association may require the borrower to pay monthly in advance, in addition to interest or interest and principal payment, the equivalent of one twelfth of the estimated annual taxes, assessments, insurance premiums and other charges upon the real estate securing a loan or any of such charges, so as to enable the association to pay such charges as they become due from the funds so received. The amount of such monthly charges may be increased or decreased so as to provide reasonably for the payment of the estimated annual taxes, assessments, insurance premiums and other charges. Every association shall keep a record of the status of taxes, assessments, insurance premiums and other charges on all real estate securing its loans and on all real and other property owned by it. All real estate loans may be prepaid, in part or in full, at any time, and the association shall not charge for such privilege of anticipatory payment an amount greater than one and one-half percent of the amount of such anticipatory payment. Any association, by agreement with the debtor, may modify the terms of any real estate loan so that such loan shall be an amortized loan, and incident thereto may credit on the debt the participation value of mortgage loan shares or accounts pledged as security for such real estate loan.

(b) Every association may require borrowing members to pay all reasonable expenses incurred in connection with the making, closing, disbursing, extending, readjusting or renewing of real estate loans. Without limiting the generality of the foregoing, such expenses may include appraisal, attorneys, abstract, recording and registration fees, title examination, credit report, survey, drawing of papers, loan closing costs and taxes imposed upon or in connection with the making and recording of any mortgage. Every association may also require borrowing members to pay the cost of all other necessary and incidental services rendered by the association or by others in connection with real estate loans in such reasonable amounts as may be fixed by the board of directors. Without limiting the generality of the foregoing, such costs may include the cost of services of inspectors, engineers and architects. Such reasonable initial charges may be collected by the association from the borrower and paid to any persons, including any director, officer or employee of the association rendering such services or paid directly by the borrower. In lieu of such initial charges to cover such expenses and costs, an association may charge a reasonable charge, part or all of which may be retained by the association which renders such service or part or all of which may be paid to others who render such services. No director, officer or employee of an association shall receive any fee or other compensation of any kind in connection with procuring any loan for an association, except for services actually rendered as above provided. No loan shall be made when the borrower is required to pay to the association or to another person in connection with the loan any unreasonable or unlawful charges or fees. The association shall ascertain the total amount paid by each borrower to it and to every other person for any reason in connection with the loan and shall furnish a loan settlement statement to each borrower upon the closing of the loan, indicating in detail the charges and fees such borrower has paid or obligated himself to pay to the association or to any other person in connection with such loan. A copy of such statement shall be retained in the records of the association.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §231.)Section 5-16-26

Section 5-16-26
Liens on accounts; pledges of accounts as security for loans.

To secure loans to members, an association shall have a lien without further agreement or pledge upon all accounts owned by the borrower. Upon default upon any loan, the association may, without any notice to or consent of the borrower, cancel on its books all or any accounts owned by the borrower and apply the value of such accounts in payment on account of the loan. An association may waive its lien in whole or in part by a writing. Any association may take the pledge of an account or accounts of the association owned by a member other than the borrower as additional security for any loan secured by an account or by an account and real estate, or as additional security for any real estate loan.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §232.)Section 5-16-27

Section 5-16-27
Adoption, etc., of bonus plans and payment of cash bonuses on accounts; bonus reserve account.

(a) In order to stimulate systematic thrift and to provide regular funds for the financing of homes, the members at a regular or special meeting may adopt the short-term bonus or the long-term bonus, or both the short-term and long-term bonuses prescribed below. The members may adopt the short-term bonus plan by adopting the following resolution and causing three copies thereof, certified by the secretary, to be filed with the commissioner: 'RESOLVED, That effective on the next succeeding dividend date, the association shall be obligated to pay a cash bonus on the short-term bonus plan prescribed in the Savings and Loan Act.' The members may adopt the long-term bonus plan by adopting the following resolution: 'RESOLVED, That effective on the next succeeding dividend date, the association shall be obligated to pay a cash bonus on the long-term bonus plan prescribed in the Savings and Loan Act.' The members may adopt both the short-term and long-term bonus plan by adopting the following resolution: 'RESOLVED, That effective on the next succeeding dividend date, the association shall be obligated to pay a cash bonus on both the short-term bonus plan and the long-term bonus plan prescribed in the Savings and Loan Act.' Upon the filing with the commissioner of the required certified copies of any such resolution, the association is authorized to proceed to put such bonus plan into effect on the next succeeding dividend date.

(b) If, after the adoption of the bonus plan, a member desiring a short-term bonus shall agree to make regular monthly payments of any specified amount on an account until the participation value thereof shall equal 100 times the agreed monthly payment, and if the agreed monthly payments shall be made each and every month thereafter until the participation value thereof shall equal 100 times the agreed monthly payment, without a delay of more than 60 days in the payment of any monthly payment, without any prepayment of more than 12 months, and if during such period no application has been made for repurchase of any part of such account, the bonus shall be payable on the date on which the participation value of such account shall equal or exceed 100 times the agreed monthly payment. The bonus rate on such short-term account shall be one half of one percent per annum and the amount of the bonus shall be determined as follows: Divide the dollar amount of each semiannual dividend declared on such account by a figure equal to twice the annual rate of percent of such semiannual dividend declared. The amount of the bonus is the sum of the quotients obtained.

(c) If, after the adoption of the bonus plan, a member desiring a long-term bonus shall agree to make regular monthly payments of any specified amount on an account until the participation value thereof shall equal 200 times the agreed monthly payment, and if the agreed monthly payments shall be made each and every month thereafter until the participation value thereof shall equal 200 times the agreed monthly payment, without a delay of more than 60 days in the payment of any monthly payment, and without any prepayment of more than 12 months, and if during such period no application has been made for the repurchase of any part of such account, the bonus shall be payable on the date on which the participation value of such account shall equal or exceed 200 times the agreed monthly payment. The bonus rate on such long-term account shall be one percent per annum, and the amount of the bonus shall be determined as follows: Divide the dollar amount of each semiannual dividend declared on such account by a figure equal to the annual rate of percent of such semiannual dividend declared. The amount of the bonus is the sum of the quotients obtained.

(d) The members at a regular or special meeting may abolish the bonus plan or plans as to accounts opened after the date of such action. Simultaneous with the declaration of each semiannual dividend after the adoption of a bonus plan or plans, the board of directors shall transfer out of net earnings to an account designated 'Bonus Reserve' an amount which, together with existing credits to the bonus reserve, is sufficient to pay the bonus on all accounts then entitled to participation in the bonus reserve in accordance with the provisions of this section. The board of directors may transfer any excess in the bonus reserve to the undivided profits account. The association which has become obligated as provided in this section to pay a cash bonus may advertise the short-term bonus plan and may refer to the bonus rate on such short-term bonus plan as being a bonus of one half of one percent per annum and may advertise the long-term bonus plan and may refer to the bonus rate on such long-term plan as being a bonus of one percent per annum.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §233.)Section 5-16-28

Section 5-16-28
Sales, transfers or exchanges of assets.

(a) In the regular and usual course of business, an association from time to time may sell any of its property in accordance with the provisions of this chapter. No director, officer or employee of an association shall directly or indirectly or under any circumstances buy assets from or sell assets to the association unless expressly approved by the board of directors. Each director, officer or employee of an association shall have the responsibilities with respect to the property of his association for the benefit of the members which the law imposes upon trustees with respect to the trust res.

(b) Any association may also as one transaction not in the regular and usual course of its business, transfer, sell or exchange all or substantially all of its property, including its name and good will, to any other association or to a federal savings and loan association and may accept, in return therefor, cash, shares, share accounts and accounts of the purchasing association upon such terms as may be agreed upon by the affirmative vote of at least a majority of the directors of such association and by the affirmative vote of a majority of the votes cast by members present at any annual meeting or special meeting called for such purpose, provided, such majority of votes represented at such meeting constitute a majority of the votes to which all members are entitled, but no such bulk transfer, sale or exchange of property shall be effective unless approved by the commissioner. If the purchaser is an association subject to this chapter, the approval of the commissioner of any such acquisition shall first be obtained. The consideration received upon any such disposition of bulk property shall be distributed to the account holders pro rata to the participation value of their accounts after the discharge of all liabilities. In the event of the disposition of all of the property of an association pursuant to this section, the vote of members shall be a vote for dissolution and a certificate of dissolution shall be executed and dissolution shall be effected in accordance with Section 5-16-32. Any member's vote under this section may be taken in connection with a vote on dissolution under Section 5-16-32.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §234.)Section 5-16-29

Section 5-16-29
Mergers.

As used in this section, the word 'association' shall include federal savings and loan associations incorporated under the Home Owners' Loan Act of 1933. Any two or more associations whose home offices are located in the same or adjoining counties are hereby authorized to merge by complying with the following provisions: The respective boards of directors of such associations shall by a majority vote of each board prepare or authorize to be prepared between such associations a written agreement of merger. When such merger agreement has been ratified by a majority of the membership of the merging association, five copies of such merger agreement, signed and acknowledged before an officer competent to take acknowledgments of deeds, by the president or a vice-president and the secretary or an assistant secretary of each of the merging associations party to such agreement (hereinafter termed 'merging associations') together with an equal number of certified copies of the proceedings of each of the meetings of the respective boards of directors at which such agreement was authorized, similarly signed and acknowledged, shall be submitted to the commissioner for his approval. The commissioner, upon receipt of the copies of the merger agreement, shall examine the same to determine whether the proposed plan of merger will work an undue hardship upon the members of any of the associations involved or impair the usefulness and success of other properly conducted associations in the same or neighboring communities and shall either approve or disapprove such proposed merger. In the event any association involved in a proposed merger is a federal savings and loan association, the commissioner shall transmit to the Federal Home Loan Bank Board, Washington, D.C., a copy of the proposed merger agreement and shall not approve the merger agreement unless and until he has been advised, in writing, by the Federal Home Loan Bank Board that said board has no objection thereto. If the commissioner shall, within 60 days after receipt of the merger agreement, fail or refuse to approve any such proposed merger, the associations involved shall have the same right of appeal as is provided by Section 5-16-5 in the event of the failure or refusal of such commissioner to approve a proposed certificate of incorporation and bylaws. Such right of appeal shall not lie in the event any of the merging associations is a federal savings and loan association unless and until the Federal Home Loan Bank Board has advised the commissioner that it has no objection to such merger. Upon approval by the commissioner, which approval shall be endorsed upon three copies of the merger agreement, the merger agreement shall become binding upon the respective merging associations and the merger shall thereupon be effective. The commissioner shall place a copy of the merger agreement so endorsed in the permanent files of his office and forward a copy of the merger agreement so endorsed to the Secretary of State for filing. The remaining copy of the merger agreement so endorsed shall be returned to the association resulting from such merger for its permanent records. The commissioner, upon such approval, shall, if one or more of the merging associations is a federal savings and loan association, notify the Federal Home Loan Bank Board. Upon the effective date of such merger, all of the assets and property of every kind and character, real, personal and mixed, tangible and intangible, choses in action, rights and credits then owned by the merging associations or which inure to any of them shall immediately by operation of law and without any conveyance or transfer and without any further act or deed be vested in and become the property of the association into which the other associations are absorbed, which shall have, hold and enjoy the same in its own right as fully and to the same extent as the same were possessed, held and enjoyed by the merging associations prior to such merger, and such associations shall be a continuation of the entity and identity of the association into which the other associations are absorbed, and all of the rights and obligations of the merging associations shall remain unimpaired and the association, at the time of the taking effect of such merger, shall succeed to all of the rights and obligations and duties and liabilities of the merging associations. All rights and remedies of creditors and all liens upon the property of the merging associations shall be preserved and all debts, liabilities and duties of the respective merging associations shall thenceforth attach to the association and may be enforced against it to the same extent as if such debts, liabilities and duties had been incurred or contracted by it. All pending actions or other judicial proceedings to which any of the associations is a party shall not be deemed to have abated or to have discontinued by reason of such merger, but may be pressed to final judgment or order in the same manner as if a merger had not been made, or the association resulting from such merger may be substituted as a party to such actions or proceedings, and any judgment or order may be entered for or against it which might have been entered for or against any of the merging associations theretofore in such action or other judicial proceedings.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §235.)Section 5-16-3

Section 5-16-3
Associations, etc., accepting money for promotion of thrift and financing of homes subject to provisions of chapter, etc.

All associations, individuals or partnerships accepting moneys from the public for the promotion of thrift and for the purpose of financing homes, whether or not incorporated, and every corporation heretofore incorporated under statutes of this state, accepting moneys from the public and having for its purpose the promotion of thrift and the financing of homes, by whatever name known, except savings banks, trust companies and trust departments of commercial banks, shall hereafter be subject to the provisions of this chapter and shall be deemed to exist hereunder. The name, rights, powers, privileges and immunities of every such corporation heretofore incorporated in this state shall be governed, controlled, construed, extended, limited and determined by the provisions of this chapter to the same extent and effect as if such corporation had been incorporated pursuant hereto, and the articles of association, certificate of incorporation or charter, however entitled, bylaws and constitution or other rules of every such corporation heretofore made or existing are hereby modified, altered and amended to conform to the provisions of this chapter, and the same are declared void to the extent that the same are inconsistent with the provisions of this chapter; except, that the obligations of any such existing corporation or association, whether between such corporation or association and its members or any of them or any other person or persons, or any valid contract between the members of any such corporation or association, or between such corporation or association or any other person or persons, existing at the time this chapter takes effect, shall not be in any way impaired by the provisions of this chapter; and, with such exceptions, every such corporation or association shall possess the rights, powers, privileges and immunities and shall be subject to the duties, liabilities, disabilities and restrictions conferred and imposed by this chapter, notwithstanding anything to the contrary in its certificate of incorporation, bylaws, constitution or rules. All obligations to any such corporation or association heretofore contracted shall be enforceable by it and in its name, and demands, claims and rights of action against any such corporation or association may be enforced against it as fully and completely as they might have been enforced heretofore.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §218.)Section 5-16-30

Section 5-16-30
Conversions.

(a) Conversions into federal savings and loan associations. —Any association or corporation of this state doing a home financing business may convert itself into a federal savings and loan association in accordance with the provisions of Section 5 of the Home Owners' Loan Act of 1933, as now or hereafter amended, upon a vote of 51 percent or more of the votes of the members cast at an annual meeting or at any special meeting called to consider such action, provided such 51 percent or more of the votes constitutes a majority of the votes to which all the members are entitled. A copy of the minutes of the proceeding of such meeting of the members, verified by the affidavit of the secretary or an assistant secretary, shall be filed in the office of the commissioner within 10 days after the date of such meeting. A sworn copy of the proceedings of such meeting, when so filed, shall be presumptive evidence of the holding and action of such meeting. Within three months after the date of such meeting, the association shall take such action in the manner prescribed and authorized by the laws of the United States as shall make it a federal savings and loan association, and there shall be filed with the commissioner a copy of the charter issued to such federal savings and loan association by the Federal Home Loan Bank Board or a certificate showing the organization of such association as a federal savings and loan association, certified by the Secretary or Assistant Secretary of the Federal Home Loan Bank Board. A similar copy of the charter or of such certificate shall be filed by the association with the Secretary of State. No failure to file any such instruments either with the commissioner or the Secretary of State shall affect the validity of such conversion upon the grant to any association of a charter by the Federal Home Loan Bank Board, and the association receiving such charter shall cease to be an association incorporated under this chapter and shall no longer be subject to the supervision and control of the commissioner.

Upon the conversion of any association into a federal savings and loan association, the corporate existence of such association shall not terminate, but such federal association shall be deemed to be a continuation of the entity of the association so converted, and all property of the converted association, including its rights, titles and interests in and to all property of whatsoever kind, whether real, personal or mixed, and things in action and every right, privilege, interest and asset of any conceivable value, or benefit, then existing or pertaining to it or which would inure to it, shall immediately by act of law and without any conveyance or transfer and without any further act or deed remain and be vested in and continue and be the property of such federal association into which the state association has converted itself, and such federal association shall have, hold and enjoy the same in its own right as fully and to the same extent as the same was possessed, held and enjoyed by the converting association, and such federal association as of the time of the taking effect of such conversion shall continue to have and succeed to all of the rights, obligations and relations of the converting association. All pending actions and other judicial proceedings to which the converting state association is a party shall not be deemed to have abated or to have discontinued by reason of such conversion, but may be prosecuted to final judgment or order in the same manner as if such conversion into such federal association had not been made and such federal association resulting from such conversion may continue such action in its corporate name as a federal association and any judgment or order may be entered for or against it which might have been entered for or against the converting state association theretofore involved in such judicial proceedings. Any association or corporation, which has heretofore converted itself into a federal savings and loan association under the provisions of the Home Owners' Loan Act of 1933 and has received a charter from the Federal Home Loan Bank Board shall hereafter be recognized as a federal savings and loan association, and its federal charter shall be given full credence by the courts of this state to the same extent as if such conversion had taken place under the provisions of this section; provided, however, that the foregoing requirements with respect to the filing with the commissioner of a copy of the federal charter or a certificate showing the organization of such association as a federal savings and loan association shall be complied with. All such conversions are hereby ratified and confirmed and all of the obligations of such an association which has so converted shall continue as valid and subsisting obligations of such federal savings and loan association, and the title to all of the property of such an association shall be deemed to have continued and vested as of the date of the issuance of such federal charter in such federal savings and loan association as fully and completely as if such conversion had taken place since the enactment of this chapter pursuant to this section.

(b) Conversions into state chartered savings and loan associations. —Any federal savings and loan association may convert itself into an association under this chapter upon a vote of 51 percent or more of the votes of members of such federal savings and loan association cast at an annual meeting or at any special meeting called to consider such action, provided such majority of votes represented at such meeting constitutes a majority of the votes to which all members are entitled. Copies of the minutes of the proceedings of such meeting of members, verified by the affidavit of the secretary or an assistant secretary, shall be filed in the office of the commissioner and mailed to the Federal Home Loan Bank Board, Washington, D.C., within 10 days after such meeting. Such verified copies of the proceedings of the meeting when so filed shall be presumptive evidence of the holdings and action of such meeting. At the meeting at which conversion is voted upon, the members shall also vote upon the directors who shall be the directors of the state chartered association after conversion takes effect. Such directors shall then execute two copies of the petition for certificate of incorporation provided for in Section 5-16-6 and four copies of the bylaws, as provided in Section 5-16-4. The commissioner may insert in the certificate of incorporation, at the end of the paragraph preceding the testimonium clause, the following: 'This association is incorporated by conversion from a federal savings and loan association.' The directors chosen for the association shall all sign and acknowledge the petition for certificate of incorporation as subscribers thereto and proposed bylaws as incorporators of the association. The provisions of Sections 5-16-4 and 5-16-5 shall, so far as applicable, apply to such conversion under this chapter. The commissioner may provide by regulation for the procedure to be followed by any such federal savings and loan association converting into an association under this chapter. All of the provisions regarding property and other rights contained in the second paragraph of subsection (a) of this section shall apply, in reverse order, to the conversion of a federal savings and loan association into an association incorporated under this chapter, so that the state chartered association shall be a continuation of the corporate entity of the converting federal association and continue to have all of its property and rights.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §236.)Section 5-16-31

Section 5-16-31
Reorganizations.

(a) The board of directors of any association may at a meeting called for that purpose adopt a plan of reorganization of the association. Five copies of the proposed plan of reorganization, signed and acknowledged before an officer competent to take acknowledgments of deed, by the secretary or an assistant secretary of the association, shall be submitted to the commissioner. If the commissioner shall approve the proposed plan of reorganization, he shall endorse his approval upon three copies thereof. Upon the approval by the commissioner of the proposed plan of reorganization, he shall file a copy thereof in the permanent files of his office, forward a copy to the Secretary of State for filing and return a copy to the association. After such approval, such approved plan shall be presented to the members at an annual meeting or special meeting called for the purpose of considering and voting upon such approved plan. If at such meeting the majority of the votes cast thereat are in favor of such approved plan, the association may proceed to reorganize in accordance therewith. Five copies of the resolution adopted approving such plan of reorganization, certified by the secretary or an assistant secretary, shall be filed with the commissioner. The commissioner shall place a copy of such certified resolution in the permanent files of his office and transmit a copy to the Secretary of State. Unless the plan of reorganization fixes the effective date thereof, the effective date of reorganization shall be the date upon which the commissioner accepts for filing the certified copies of the resolution of the members adopting the approved plan of reorganization. The plan of reorganization may provide for reincorporation under the existing name of the association or under a different name. In addition to all other lawful provisions, the plan may provide for the exchange of shares or accounts in the association for accounts of the reorganized association.

(b) Without limiting the generality of the methods by which an association may reorganize, any association may:

(1) Transfer title to any of its assets to a new association organized under this chapter solely to liquidate such assets in an orderly manner. Such liquidating association shall be in dissolution and shall dissolve in accordance with the provisions of Section 5-16-32. Unless the commissioner shall otherwise approve, the board of directors of the reorganizing association shall be the board of directors of the liquidating association. The liquidating association shall pay to the reorganizing association for the assets acquired the aggregate book value of such assets on the books of the reorganizing association by issuing pro rata and delivering to the account holders and shareholders of the reorganizing association accounts of an aggregate participation value equal to the aggregate book value of the assets so acquired. The participation value of the accounts or shares of such account holders or shareholders of the reorganizing association shall be written down in an amount equal to the participation value of the account of such account holder in the liquidating association. Title to the assets transferred to the liquidating association pursuant to this section shall vest in the liquidating association by operation of law with the same legal effect as provided in Section 5-16-29 in the case of merger;

(2) Set up a 'participating reserve' by transferring thereto the aggregate book value of any assets of the association. The participation value of the shares and accounts of the association then outstanding shall be reduced pro rata by an aggregate amount equal to the aggregate book value of assets so transferred to the participating reserve. The association shall issue pro rata to such shareholders and account holders nonrepurchasable 'participating reserve accounts' of an aggregate participation value equal to the aggregate book value of assets transferred to the participating reserve. The assets so represented by the participating reserve shall be identified on the books of the association as participating reserve assets, and the aggregate book value of such assets as shown by the participating reserve shall be reported on any balance sheet of the association opposite the item 'participating reserve assets,' and such assets shall be and remain a separate fund from the other assets of the association for the sole use and benefit of the holders of participating reserve accounts. In such event, the directors shall have with respect to the liquidation of the participating reserve assets all of the powers set forth in Section 5-16-32. As and when the participating reserve assets are liquidated, all proceeds therefrom shall be paid pro rata from time to time as the board of directors may determine to the holders of participating reserve accounts at the option of the board of directors either in cash or by credit upon an account of the association. If the proceeds of the final liquidating of participating reserve assets do not equal the participation value of participating reserve accounts, the loss shall be absorbed pro rata by the holders of participating reserve accounts, and the association shall have no further liability in relation thereto or arising therefrom; and

(3) Reduce its liability to each of its account holders pro rata to the amount credited to the account of each such account holder on the books of the association in such a manner as to distribute the loss equally among such account holders whenever the losses of an association resulting from the depreciation in value of its assets or otherwise are such as to result in an impairment of capital.

(c) All rights of and obligations to any reorganizing association shall inure to the benefit of the reorganized association and be enforceable by it and in its name, and any demands, claims or rights of action against any reorganizing association may be enforced against the reorganized association as fully and completely as they might have been enforced theretofore, and all deeds, notes, mortgages, contracts, judgments, transactions and proceedings whatsoever theretofore made, received, entered into, carried on or done by the association before the reorganization shall be as good, valid and effectual for and against the reorganized association as though such reorganization had never taken place. Upon the vote of the members of an association in approval of a proposed plan of reorganization, all pending applications for repurchase of shares or accounts shall be cancelled.

(d) Notwithstanding any other provision of law, an existing mutual association currently operating within this state may convert to a capital stock form of organization in accordance with this section and applicable regulations of the Federal Home Loan Bank Board. The board of directors of an association shall first adopt a plan to convert the association to the stock form. Five copies of the proposed plan of conversion shall be submitted to the commissioner. The commissioner shall not approve a plan unless such plan is fair to the members of the converting association and the association's insurance of accounts will remain in effect after the conversion. If the commissioner approves the proposed plan, he shall endorse his approval upon three copies thereof. After such approval, such approved plan shall be presented to the members at a meeting called to consider and vote upon the plan. If the majority of such votes cast at such meeting are in favor of the plan, the association may proceed to convert in accordance therewith. Five copies of the resolution adopted approving the plan of conversion, certified by the secretary or an assistant secretary of the association, together with five executed copies of the association's proposed stock certificate of incorporation approved at the meeting and executed by the association's chief executive officer and corporate secretary, shall be filed with the commissioner. The effective date of conversion shall be the date upon which the commissioner endorses the executed stock certificates of incorporation, which shall coincide with the date the association executes all orders for its conversion stock and issues its stock certificates. Two copies of the endorsed certificates of incorporation shall thereupon be transmitted to the converted association.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §237; Acts 1981, No. 81-392, p. 617.)Section 5-16-32

Section 5-16-32
Voluntary liquidation — Procedure generally.

Any association may, by a majority of the votes cast at any annual meeting or any special meeting called for that purpose, vote to terminate its existence. Upon such vote, five copies of a certificate of dissolution, which shall state the name of such association and the vote cast in favor of dissolution, shall be signed and acknowledged before an officer competent to take acknowledgments of deeds by two officers. Five copies of such certificate shall be filed with the commissioner, who shall examine such association, and, if he finds that it is in a safe and sound condition, shall so note, together with his approval of such dissolution, upon all the copies of the certificate of dissolution. The commissioner shall place a copy in the permanent files of his office and file a copy with the Secretary of State. Upon such approval, the association shall be dissolved and shall cease to carry on business, but nevertheless shall continue as a corporate entity for the sole purpose of paying, satisfying and discharging existing liabilities and obligations, collecting and distributing assets and doing all other acts required to adjust, wind up and dissolve its business and affairs. The board of directors shall act as trustees for liquidation. They shall proceed as speedily as may be practicable to wind up the affairs of the association and, to the extent necessary or expedient to that end, shall exercise all the powers of such dissolved association and, without prejudice to the generality of such authority, may fill vacancies, elect officers, carry out the contracts, make new contracts, borrow money, mortgage or pledge the property, sell its assets at public or private sale, compromise claims in favor of or against the association, apply assets to the discharge of liabilities, distribute assets either in cash or in kind among account holders according to their respective rights, after paying or adequately providing for the payment of liabilities, and do and perform all acts necessary or expedient to the winding up of the association. All deeds or other instruments shall be in the name of the association and shall be executed by the president or a vice president and the secretary or an assistant secretary. The board of directors shall also have power to exchange or otherwise dispose of or to put in trust all or substantially all or any part of the assets upon such terms and conditions and for such considerations, which may be money, stock, bonds, shares or accounts of any insured association or of any federal savings and loan association, or other instruments for the payment of money or other property or other considerations, as the board of directors may deem reasonable or expedient and may distribute such considerations or the proceeds thereof or trust receipts or certificates of beneficial interest among the account holders in proportion to their interest therein. In the absence of fraud, any determination of value made by the board of directors for any such purposes shall be conclusive. The association, during the liquidation of the assets of the association by the board of directors, shall continue to be subject to the supervision of the commissioner, and the board of directors shall report the progress of such liquidation to the commissioner from time to time as he may require. Upon completion of liquidation, the board of directors shall file with the commissioner a final report and accounting of such liquidation. The approval of such report by the commissioner shall operate as a complete and final discharge of the board of directors or any member thereof in connection with the liquidation of such association. No such dissolution, nor any action of the board of directors in connection therewith, shall impair any contract right between such association and any borrower or other person or persons or the vested rights of any member of such association.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §238.)Section 5-16-33

Section 5-16-33
Voluntary liquidation — Remittance of unclaimed dividends and share accounts by receiver, etc.; payment of creditors and investors by commissioner.

After the order for final distribution, dividends and unclaimed share accounts remaining unpaid in the hands of the receiver or liquidating agent of savings and loan associations in liquidation shall be by him paid to the Savings and Loan Commissioner of the state and, six months after the said order for final distribution, shall be deposited by the Savings and Loan Commissioner in one or more state banks, at interest, to the credit of the Savings and Loan Commissioner in his official capacity, in trust for the several creditors and investors of the liquidated savings and loan association from which they were received, and the commissioner may pay over the money so held by him to the persons respectively entitled thereto upon being furnished satisfactory evidence of their right to same. In case of doubtful or conflicting claims, he may require an order, from the court having jurisdiction, authorizing and directing the payment thereof. He may apply the interest earned by money so held by him toward defraying the expenses in the payment and distribution of such unclaimed dividends or share accounts to the investors and creditors entitled to receive the same.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §239; Acts 1943, No. 96, p. 98.)Section 5-16-34

Section 5-16-34
Voluntary liquidation — Certification and transmittal of unclaimed funds to State Treasurer.

The Savings and Loan Commissioner shall certify to the Treasurer of the state a complete list of funds remaining in his hands uncalled for which have been left in his hands in his official capacity in trust for creditors and investors in liquidated savings and loan associations from which they were received after they had been held by him for three years from the date of his having received the funds from the liquidating agent or receiver of the institution. Along with this certificate, he shall transmit to the Treasurer of the state the funds which he has so held in trust for three years. A copy of such certificate shall also be filed with the Comptroller, who shall make a record thereof.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §240.)Section 5-16-35

Section 5-16-35
Voluntary liquidation — Payment of creditors or investors by State Treasurer.

Any creditor or investor of a liquidated savings and loan association who has not been paid the amount standing to his credit, as thus certified to the Treasurer, may apply to the Savings and Loan Commissioner for the amount due him after it has been certified to the Treasurer of the state. The creditor or investor shall make an affidavit and offer proof of his identity and the amount due him by the liquidated savings and loan association. When satisfied as to the correctness of the claim and as to the identity of the person, the Savings and Loan Commissioner shall approve the claims and forward them to the Comptroller, who shall audit the same, and, if found correct, issue his warrant payable to the creditor or investor for the amount shown by the records to be due such creditor or investor, which warrant shall be paid by the Treasurer.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §241.)Section 5-16-36

Section 5-16-36
Reports, examinations and audits.

(a) On or before the last day of January in each year, every association shall make an annual written report to the commissioner, upon a form to be prescribed and furnished by the commissioner, of its affairs and operations, which shall include a complete statement of its financial condition, including a statement of income and expense since its last previous similar report, for the 12 months ending on December 31, of the previous year. Every such report shall be verified by the president and treasurer. Every association shall also make such other reports as the commissioner may from time to time require, which shall be in such form and filed at such date as he may prescribe and shall, if required by him, be verified in the same manner as the annual report. Every insured association shall submit through the Federal Home Loan Bank of the district to the Federal Savings and Loan Insurance Corporation, Washington, D.C., two copies of its annual report, verified in the same manner as the annual report to the commissioner, and shall likewise furnish to such corporation copies of each and every other report which the commissioner shall at any time require any insured association to make to him. The commissioner may by written order require the officers of all associations or of any one or more associations to make a monthly report to the association's board of directors on forms prescribed by the commissioner, two copies of which shall be filed with the commissioner. A copy of each such monthly report by an insured association shall be forwarded by the association to the Federal Savings and Loan Insurance Corporation, Washington, D.C.

(b) The commissioner shall, at least once in each year, without previous notice, examine, or cause an examination to be made, into the affairs of every association subject to this chapter. If an association is not audited at least once each year in a manner satisfactory to the commissioner, the examination of such association shall include an audit. In lieu of such examination, the commissioner may accept any examination made by a Federal Home Loan Bank, the Federal Home Loan Bank Board or, of an insured association, by the Federal Savings and Loan Insurance Corporation. Two copies of any audit, signed and certified by the auditor making such audit, shall promptly be filed with the commissioner. Whenever, in the judgment of the commissioner, the condition of any association renders it necessary or expedient to make an extra examination or to devote any extraordinary attention to its affairs, the commissioner shall cause such work to be done. A copy of the report of each such examination shall be furnished to the association examined, exclusive of confidential comments and opinions made by the examiner or auditor in a separate report to the commissioner. Such report of examination or audit shall be presented by the president to the board of directors at its next regular or special meeting. The commissioner or examiners or auditors shall have free access to all books and papers of an association which relate to its business and the books and papers kept by an officer, agent or employee relating to or upon which any record of its business is kept and may summon witnesses and administer oaths or affirmations in the examination of the directors, officers, agents or employees of any such association or any other person in relation to its affairs, transactions and condition and may require and compel the production of records, books, papers, contracts or other documents by court order if not voluntarily produced.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §248.)Section 5-16-37

Section 5-16-37
Conservatorship; involuntary liquidation.

(a) If the commissioner as a result of any examination or from any report made to him shall find that any association is violating the provisions of its certificate of incorporation or bylaws or the laws of this state or of the United States or any lawful order of the commissioner, or is conducting its business in an unsafe manner, he may, by an order, direct discontinuance of such violation or unsafe practice and conformance with all requirements of law. If an association shall refuse or neglect to comply with such order within the time specified therein, or if it shall appear to the commissioner that any association is in an unsafe condition or is conducting its business in an unsafe manner, or if he shall find that an impairment of capital exists to such an extent that it threatens loss to the members or if any association refuses to submit its books, papers and accounts to the inspection of the commissioner or his representative, the commissioner may appoint a conservator to take charge of the association and manage its business until the commissioner shall permit the board of directors to resume management of the business or shall reorganize the association, or until a receiver shall be appointed by the commissioner to liquidate its affairs. Any conservator appointed by the commissioner shall have all the rights, powers and privileges possessed by the officers, board of directors and members of the association. The directors and officers shall remain in office and the employees shall remain in their respective positions, but the conservator may remove any director, officer or employee, provided the order of removal of a director or officer shall be approved in writing by the commissioner. While the association is in charge of a conservator, members of such association shall continue to make payments to the association in accordance with the terms and conditions of their contracts, and the conservator, in his discretion, may permit account holders to repurchase their accounts from the association pursuant to the provisions of this chapter or under and subject to such rules and regulations as the commissioner may prescribe, and the conservator shall have power to accept payments on accounts, but any payments upon such accounts received by the conservator may be segregated if the commissioner shall so order in writing; and, if so ordered, such payments shall not be subject to offset and shall not be used to liquidate any indebtedness of such association existing at the time the conservator was appointed for it or any subsequent indebtedness incurred for the purpose of liquidating the indebtedness of any such association existing at the time such conservator was appointed. All expenses of the association during such conservatorship shall be paid by the association, including the salary of the conservator. The appointment of a conservator shall be evidenced by the commissioner's issuing of a certificate, under the seal of his office, delivered to the board of directors of the association, certifying that a conservator has been appointed pursuant to this section, and the compensation of such conservator shall be fixed by the commissioner with the approval of the Governor and shall be stipulated in the certificate. Within six months from the date upon which the conservator shall take charge of an association, the commissioner shall determine whether or not he shall restore the management of the association to the board of directors. Such determination shall be evidenced by the commissioner's certificate, under the seal of his office, delivered to the board of directors of the association, that the conservator forthwith is redelivering the management of the association to the board of directors of the association then in office. After the management of the association shall have been redelivered to the board of directors of an association, the association shall thenceforth be managed and operated as though no conservator had been appointed. At any time prior to the redelivery of the management to the board of directors, the commissioner shall determine whether such association shall be required to reorganize. Such determination shall be evidenced by the commissioner's certificate, under the seal of his office, delivered to the association, that unless the association reorganizes under the provisions of this chapter within a period of 90 days from the date of such certificate or within such further time as the commissioner shall approve, the commissioner will proceed to liquidate the association. If the association is an insured association, a signed and sealed copy of each certificate mentioned in this section shall be promptly sent by the commissioner by registered or certified mail to the Federal Savings and Loan Insurance Corporation, Washington, D.C.

(b) If the commissioner determines not to permit the association to resume business or to reorganize within the periods above specified, the commissioner shall, upon the date of such determination, appoint a receiver, which may be an agency or corporation created by the United States government, for such association for the purpose of liquidation, and shall fix the salary or compensation to be paid such receiver, his employees and counsel when such payments have had the approval of the Governor. The taking of possession by the receiver shall be evidenced by the commissioner's issuing of a certificate, under the seal of his office, delivered to the home office of the association, certifying that a receiver has been appointed to take possession of its property, business and assets pursuant to this section. A signed and sealed copy of such certificate shall be posted in a prominent place in the principal business entrance to the home office of the association simultaneously with the delivery of such certificate to the association. The posting of such certificate shall be notice generally that all dealings with the association shall thereafter be had through the receiver or his duly appointed agents so long as the receiver shall remain in the possession of the assets of the association. A signed and sealed copy of the certificate of the commissioner appointing a receiver of an association shall be recorded on the land record or register required by the laws of this state to be maintained for deeds to and liens upon real estate in each county or other political subdivision where real property in which the association has an interest is located. Upon such recordation of such order, all of the property of the association, including its rights, titles and interest in and to all property of whatsoever kind, whether real, personal or mixed, and things in action and every right, privilege, interest and asset of any conceivable value or benefit then existing or pertaining to it or which would inure to it shall immediately by act of law and without any conveyance or transfer and without any further act or deed become vested in and continue to be the property of the receiver of such association who shall have, hold and enjoy the same as receiver as fully and to the same extent as the same was possessed, held and enjoyed by the association of which he was appointed receiver. If the association is an insured association, a copy of such certificate shall be promptly forwarded by the commissioner by registered or certified mail, to the Federal Savings and Loan Insurance Corporation, Washington, D.C. In the liquidation of associations, a receiver shall have, in addition to the usual powers of receivers, all the powers specified in this chapter which inure to the board of directors of an association in dissolution in their capacity as trustees for liquidation. At any time prior to the completion of the liquidation of an association, the commissioner may by written order redeliver the property and assets of an association, or by such written order may reorganize such association and, upon the completion of such reorganization, redeliver its property and assets to the association. A signed and sealed copy of such order shall be recorded in the same manner and with the inverse effect as the certificate of the commissioner appointing a receiver, whereupon all of the property of the association shall become vested in it by operation of law. All expenses of liquidation, including the salaries of receiver or liquidating agents, shall be charged to the assets in liquidation, except the salaries of any employees of the Savings and Loan Bureau engaged in such liquidation and, further, except any salaries of any employees of the Federal Savings and Loan Insurance Corporation; provided, however, the expense incurred by the Savings and Loan Bureau in making the necessary audits of associations in liquidation shall be charged to the assets in liquidation. Upon completion of the liquidation of any association, the Savings and Loan Commissioner shall have an audit or report of examination of the affairs of the association made for the period the association has been in process of liquidation, and the cost of such audit shall be charged to the assets in liquidation, the original signed and sealed copy of such final audit or report of examination to be delivered to the State Savings and Loan Board. Upon acceptance for filing of such final report by the board, after hearing by said board, if it so elects, the receiver shall be discharged without further liability. Upon the acceptance for filing by the board of such final report, the receiver shall advise the Secretary of State, in writing, that the liquidation of the association involved is completed. The determination of the board with respect to such accounting and final report shall be final.

(c) If an association deems itself aggrieved by the action of the commissioner in taking possession of its property, business and assets for the purposes of conservatorship or receivership, it may appeal from such action in the manner as provided in Section 5-2A-63. No action taken by a conservator or a receiver while in office shall be invalidated by such appeal having been filed or by any order of the board. The filing of such an appeal shall not remove a conservator from the management of an association or a receiver from possession of the property and assets of an association during the pendency of such appeal. If the board shall disapprove the action of the commissioner in appointing a conservator or a receiver, it shall issue an order removing the conservator or receiver. Upon the delivery of such order of the board to the commissioner, the commissioner shall issue an order redelivering the association to the board of directors of the association then in office. A signed and sealed copy of such order of the commissioner redelivering the association to the board of directors shall be recorded on the land record or register in the manner and with the inverse effect provided in this section for the recordation of a certificate of the commissioner appointing a receiver, and upon such recordation all of the property of the association shall become vested in the association by operation of law.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §249; Acts 1943, No. 98, p. 100.)Section 5-16-38.1

Section 5-16-38.1
Assessment fees.

Each savings and loan association chartered by the State of Alabama shall on the call of the commissioner pay the State Banking Department an assessment fee based on the total resources of the association as may be shown by its last report to the Banking Department. The rate of such assessment shall be in an amount fixed by the commissioner and approved by the State Savings and Loan Board and the assessment may be made more frequently than annually. All such fees shall be paid into the special fund set up by the State Treasurer pursuant to Section 5-2A-20, and used in the supervision and examination of savings and loan associations. No other assessment or license of any kind shall be levied against or collected from any savings and loan association except the ordinary taxes assessed against property in general and except as may be specifically provided for in this section.



(Acts 1980, No. 80-693, §2.)Section 5-16-39

Section 5-16-39
Foreign corporations not to transact business in state; privileges, etc., of federal savings and loan associations.

No foreign corporation shall transact any business of a savings and loan association within this state or maintain an office in this state for the purpose of transacting such business. Federal savings and loan associations, incorporated pursuant to an act of Congress known as the Home Owners' Loan Act of 1933, are not foreign corporations, and any such federal association shall be subject to the same taxation and entitled to the same privileges as associations subject to this chapter.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §250.)Section 5-16-4

Section 5-16-4
Procedure for incorporation — Petition for certificate of incorporation; subscription by incorporators, etc.

(a) At any time, any five or more individuals (hereinafter referred to as the 'incorporators'), citizens of this state, may form an association to promote thrift and home financing, subject to approval as provided in Sections 5-2A-61 through 5-2A-63, 5-16-5, 5-16-10, 5-16-11, 5-16-36 and 5-16-37, by signing and acknowledging, before an officer competent to take acknowledgments of deeds, two copies of a petition for a certificate of incorporation in the form prescribed in Section 5-16-49, which shall be filed with the commissioner, accompanied by the incorporation fee. The incorporators shall simultaneously file with the commissioner two copies of the proposed bylaws of the association in a form consistent with law and satisfactory to the commissioner, each of which copies shall be signed by each of the incorporators and acknowledged in the same manner as the petition for certificate of incorporation. Upon receipt of such documents, the commissioner shall submit to the Savings and Loan Board his recommendations upon any such petition. In the event the Savings and Loan Board shall approve the incorporation of the association, the commissioner shall issue a certificate of approval of the incorporation of such association as provided in Section 5-16-5. He shall at the same time execute in triplicate a certificate of incorporation in the form provided in Section 5-16-6. He shall file one signed copy of such certificate of approval and of the certificate of incorporation with the Secretary of State. He shall endorse upon the two copies of the petition for certificate of incorporation filed with him such certificate of approval and return the duplicate original and a copy of the certificate of incorporation to the association, addressed to the chairman of the incorporators, and shall retain the original petition for certificate of incorporation and a copy of the certificate of incorporation in the permanent files of his office. He shall return one copy of the approved bylaws to the association, addressed to the chairman of the incorporators, and retain in the permanent files of his office the original signed copy of the approved bylaws. The petition for certificate of incorporation, the certificate of approval of incorporation, the certificate of incorporation and the bylaws shall not be filed or recorded in any other state or county office. The failure of the commissioner to file, return or retain any such document as above provided shall not affect the validity of the incorporation of any association. The corporate existence of an association shall begin when the commissioner shall issue the certificate of incorporation of the association, and such existence shall be perpetual unless terminated in accordance with the provisions of this chapter.

(b) The incorporators shall appoint one of such persons as chairman of the incorporators. The incorporators shall pay, in cash, to such chairman as subscriptions to the capital of the proposed association, including that part of the original subscription paid by such chairman, an aggregate amount, fixed as follows in relation to the size of the place in which the home office of the association is to be located:

(1) In incorporated or unincorporated places having not more than 10,000 inhabitants, the minimum sum of $5,000.00;
(2) In places having more than 10,000 but less than 100,000 inhabitants, the minimum sum of $10,000.00; and
(3) In places having 100,000 or more inhabitants, the minimum sum of $20,000.00; provided, that the commissioner may, in his discretion, require a larger amount of share capital to be paid in.

The size of the incorporated or unincorporated place shall be determined by the commissioner in accordance with the latest federal census. The chairman of the incorporators shall procure from a surety company, or other surety acceptable to the commissioner, a surety bond in form approved by the commissioner in an amount at least equal to the amount subscribed by the incorporators. Such bond shall name the commissioner as obligee and shall be delivered to him. It shall guarantee the safekeeping of the funds subscribed and their delivery to the association after the issuance of the certificate of incorporation and after the bonding of the officers. In the event of the failure to complete organization, such bond shall guarantee the return of the amounts collected to the respective subscribers or their assigns, less the incorporation fee. The incorporators shall create an expense fund in an amount not less than 20 percent of the minimum capital required to be paid in under this chapter, from which expense fund the expense of organizing the association and its operating expenses may be paid until such time as its earnings are sufficient to pay its operating expenses in addition to such dividends as may be declared and credited to its account holders from its earnings. The incorporators shall deposit to the credit of the association in cash the amount of the expense fund. The amounts contributed to the expense fund by the incorporators shall not constitute a liability of the association except as hereinafter provided. Contributions made by the incorporators to the expense fund may be repaid pro rata to the contributors from the net earnings of the association for any dividend period after provision for statutory reserves and declaration of dividends of not less than one percent on capital for such dividend period. In case of the liquidation of an association before contributions to the expense fund have been repaid, any contributions to the expense fund remaining unexpended after the payment of the expenses of liquidation of all creditors and of the participation value of the accounts of all members shall be repaid to the contributors pro rata. The books of the association shall reflect the expense fund. Contributors to the expense fund shall be paid dividends on the amounts paid in by them and for such purpose such contributors shall in all respects be considered as accounts of the association.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §212.)Section 5-16-40

Section 5-16-40
Sales of accounts.

The sale of accounts of any association subject to the provisions of this chapter is hereby exempted from all provisions of law of this state which provide for the supervision and regulation of the sale of securities, and the sale of any such accounts shall be legal without any action or approval whatsoever on the part of any official authorized to license, regulate and supervise the sale of securities.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §252.)Section 5-16-41

Section 5-16-41
Acknowledgment, etc., of instruments by public officers employed by associations, etc.

No public officer qualified to take acknowledgments or proofs of written instruments shall be disqualified from taking the acknowledgment or proof of any instrument in writing in which an association is interested by reason of his membership in or employment by an association so interested, and such acknowledgments or proofs heretofore taken are hereby validated.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §253.)Section 5-16-42

Section 5-16-42
Operating or management contracts.

No association may hereafter make any operating or management contract with any person or persons, except with the approval of the commissioner, nor shall existing contracts be extended, renewed or transferred without such approval.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §254.)Section 5-16-43

Section 5-16-43
Accounts of minors, married women, joint owners and fiduciaries; investments in accounts of associations.

(a) An association may issue membership certificates to minors and to married women, each in their own right. Any payment or delivery of rights to any minor or to a married woman, or a receipt or acquittance signed by a minor or a married woman who holds an account shall be a valid and sufficient release and discharge of an association for any payment on an account or delivery of rights to such minor or married woman.

(b) An association may issue membership certificates in the joint names of two or more persons or their survivor, in which event any of such persons who shall first act shall have power to act in all matters related to the membership, whether the other person or persons named in such membership certificate are living or not. Such a joint account shall create a single membership in an association. No account shall be issued to tenants in common. The repurchase or redemption value of an account issued in joint names and dividends thereon or other rights relating thereto may be paid or delivered, in whole or in part, to any of such persons who shall first act, whether the other person or persons are living or not. The payment or delivery to any person or a receipt or acquittance signed by any such person, to whom any such payment or any such delivery of rights is made shall be a valid and sufficient release and discharge of an association for the payment or delivery so made.

(c) The pledge or hypothecation to any association or federal savings and loan association of all or part of a savings account in joint tenancy signed by any tenant or tenants upon whose signature or signatures withdrawals may be made from the account shall, unless the terms of the savings account provide specifically to the contrary, be a valid pledge and transfer to the association of that part of the account pledged or hypothecated and shall not operate to sever or terminate the joint and survivorship ownership of all or any part of the account.

(d) An association may issue membership certificates in the name of any administrator, executor, guardian, trustee or other fiduciary, in trust for a named beneficiary or beneficiaries. Any such fiduciary shall have power to vote as a member as though the membership certificate were held absolutely and to make payments upon and to repurchase any such account, in whole or in part. The repurchase value of any such account and dividends thereon or other rights relating thereto may be paid or delivered, in whole or in part, to such fiduciary without regard to any notice to the contrary so long as such fiduciary is living. The payment or delivery to any such fiduciary or a receipt or acquittance signed by any such fiduciary to whom any such payment or any such delivery of rights is made shall be valid and sufficient release and discharge of an association for the payment or delivery so made. Whenever a person holding an account in a fiduciary capacity dies and no written notice of the revocation or termination of the trust relationship shall have been given to an association, the repurchase value of such account and dividends thereon or other rights relating thereto may, at the option of an association, be paid or delivered, in whole or in part, to the beneficiary or beneficiaries of such trust. The payment or delivery to any such beneficiary or beneficiaries for any such payment or delivery shall be a valid and sufficient release and discharge of an association for the payment or delivery so made.

(e) Accounts of an association and of federal savings and loan associations organized pursuant to Home Owners' Loan Act of 1933 shall be legal investments for the funds of administrators, executors, guardians, trustees, and other fiduciaries of every kind and nature and for the funds of all insurance companies. This provision is supplemental to and amendatory of any and all other acts regulating, relating to and declaring what shall be legal investments for administrators, executors, guardians, trustees, or other fiduciaries of every kind and nature or for the funds of insurance companies.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §255; Acts 1967, No. 289, p. 817.)Section 5-16-44

Section 5-16-44
Deposit in names of two persons, payable to either or survivor — How payable; when construed as belonging to survivor.

When a deposit has been made or shall hereafter be made in any savings and loan association transacting business in this state in the names of two persons, payable to either, or payable to either or survivor, such deposit or any part thereof or any interest or dividend thereon may be paid to either of said persons, whether the other is living or not; and, if one is dead, such deposit shall be construed as belonging to the survivor in the absence of any written agreement to the contrary. The receipt or acquittance of the person so paid shall be a valid and sufficient release and discharge to the savings and loan association for any payment so made. This section shall also apply where a deposit is made in the names of more than two persons where there is a provision for survivorship.



(Acts 1967, No. 211, p. 575, §1.)Section 5-16-45

Section 5-16-45
Deposit in names of two persons, payable to either or survivor — Title to deposit upon death of either.

When a deposit has been made or shall hereafter be made in any savings and loan association in this state in the names of two persons, payable to either of such persons, or payable to the survivor of them, the said deposit shall, upon the death of either of said persons, become the property of and be paid in accordance with its terms to the survivor, irrespective of whether or not the funds deposited were the property of only one of said persons, irrespective of whether or not at the time of the making of such deposit there was any intention on the part of the persons making such deposit to vest the other with a present interest therein, irrespective of whether or not only one of said persons, during their joint lives, had the right to withdraw such deposit and irrespective of whether or not there was any delivery of any account book or savings account book by the person making such deposit to the other of such persons. This section will also apply where a deposit is made in the names of more than two persons where there is a provision for survivorship. Nothing in this section shall be construed to prohibit the person making such deposits from withdrawing or collecting the same during his lifetime, nor shall the fact that such person had the right to withdraw or collect said deposit during his lifetime operate to defeat the rights herein provided for the person or persons surviving such depositor.



(Acts 1967, No. 211, p. 575, §3.)Section 5-16-46

Section 5-16-46
Disposition of account of deceased person.

Whenever a person shall die leaving a savings account in a savings and loan association not exceeding $1,000.00, the savings and loan association having the savings account may discharge itself from liability thereafter by paying the funds in the savings account to the widow or surviving husband of the deceased or, if there is no widow or surviving husband, to the person having the actual custody or control of the minor child or children of the deceased; provided, that such person, if not the legal guardian, shall execute to the probate judge of the county a bond in the penal sum of double the amount of such deposit for the faithful accounting of the money so received, which shall be approved by said probate judge; or, if there is no minor child or children to the person or persons who under the laws of Alabama are the heirs and inherit the personal property of the deceased. No such payment is to be made before the lapse of 60 days from the date of the death of the deceased, and no such payment must be made by the savings and loan association under this section if letters testamentary or of administration have been issued to a personal representative or a proceeding is pending to probate a will of the deceased, or if a petition of letters of administration on the estate of the deceased is pending in the court in this state which would have jurisdiction of the administration of the estate. The amount or amounts of the savings account, together with the other personal property of the deceased, shall not exceed the amount of exemption allowed by law, and the savings and loan association shall be fully protected and discharged from further liability by paying such funds to the person or persons set forth above if the savings and loan association obtains an affidavit of some reputable citizen as to such facts.



(Acts 1959, No. 589, p. 1477.)Section 5-16-47

Section 5-16-47
Disposition of deposit in trust for another upon death of trustee.

When a deposit has been made or shall hereafter be made in any savings and loan association transacting business in this state by any person in trust for another and no other or further notice of the existence and terms of a legal and valid trust shall have been given in writing to and received by said savings and loan association, in the event of the death of the trustee, such deposit or any part thereof, together with any dividends or interest thereon, shall be construed as belonging to the beneficiary of the trust and may be paid to such person, whether a minor or adult, and the receipt or acquittance of such person shall fully relieve and release said savings and loan association from all liability.



(Acts 1967, No. 211, p. 575, §2.)Section 5-16-48

Section 5-16-48
Engaging in mortgage brokerage business; purchase of loans; origination, purchase and sale of mortgages.

(a) No association shall engage in the mortgage brokerage business.

(b) Every association shall primarily use its funds in making home loans originated by it rather than in purchasing loans, but may incidentally purchase loans of any type which it is permitted to make; provided, that no association may purchase bulk property in excess of 10 percent of its assets or $50,000.00, whichever is greater, without the approval of the commissioner; and provided further, that no association may purchase any real estate loan or other property from an affiliated institution or from an institution in liquidation without the approval of the commissioner. An 'affiliated institution' means:

(1) An institution in which the purchasing association has a substantial investment,
(2) An institution which has a substantial investment in the purchasing association, or
(3) An institution of which the majority of the board of directors are the same persons who constitute a majority of the board of directors of the purchasing association.
An 'institution in liquidation' means:

(1) An institution which has been taken over for liquidation pursuant to law, or

(2) An institution which in conformity with law has determined to dissolve.

(c) Associations may originate and sell mortgages insured under Title II of the National Housing Act; provided, that a charge is made and collected by the association sufficient to reimburse it for the expense incurred in originating such business. Each mortgage sold by an association, whether so insured or not, shall be sold without recourse and, if under a contract to service the same, on a basis which will reimburse the association adequately for the cost of such servicing.

(d) Except as provided in subsection (c) of this section, no association shall make the purchase and sale of mortgages a substantial or routine part of its business. No association which holds a mortgage or other instrument securing a debt which is a first lien upon real estate and which simultaneously holds one or more additional mortgages or other instruments securing a debt and constituting liens inferior to the first lien upon the same real estate shall sell or otherwise dispose of any such mortgage or other instrument unless it shall simultaneously sell or otherwise dispose of all mortgages or other instruments constituting inferior liens upon the same real estate.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §256.)Section 5-16-49

Section 5-16-49
Forms.

(a) Petition for certificate of incorporation. -The following form of petition for certificate of incorporation shall be used by all applicants for permission to organize a savings and loan association under the provisions of this chapter:

____________________, Alabama (City)

Savings and Loan Commissioner

____________________________________________________________

AddressDate

The undersigned respectfully apply for permission to organize a savings and loan association under the name and style of __________ Savings and Loan Association _________, with home office to be located at _______, in the County of _______. In support of our petition, we submit the following: (1) All petitioners are citizens of the State of Alabama, and are desirous of forming a local mutual thrift and home-financing association in which people may invest their funds and which will provide primarily for the financing of homes. (2) All petitioners are responsible persons of good character. There is a need for such an institution in the community in which the home office of the association is to be located; there is a reasonable probability for its success and usefulness; and it can be established without undue injury to existing properly conducted local thrift and home-financing institutions. (3) Applicants are ready to submit to the Savings and Loan Commissioner and to the Savings and Loan Board such evidence of the facts herein stated as required by said Commissioner or said board. (4) Petitioners agree not to represent themselves as authorized to do business until this application is approved, and further agree that upon issuance of certificate of incorporation to said petitioners, they will proceed only in accordance with provisions of the Savings and Loan laws and rules and regulations made thereunder. (5) Names and post office addresses of the incorporators, all of whom are citizens of the State of Alabama, and the required amounts paid in by each of the incorporators to the chairman of the incorporators, as noted below, upon subscriptions to capital in the aggregate sum of $ ______ are as follows:

NAMESPOST OFFICE ADDRESESCAPITAL PAID IN FULL
_______________,______________$_____________
Chairman______________$_____________
____________________________$_____________
____________________________$_____________
____________________________$_____________

Total paid-in capital$______________________

(6) The names and post office addresses of the members who shall serve as directors until the first annual meeting of the members, are as follows:

NAMESPOST OFFICE ADDRESSES
__________________________________________
__________________________________________
__________________________________________
__________________________________________
__________________________________________

IN WITNESS WHEREOF, we have signed and acknowledged this certificate of incorporation in duplicate. Dated this ____________ day of ____________, 19__.

STATE OF _______________________}SS:
COUNTY OF _____________________

On this ______ day of ___________, 19__, before me _____________________, a Notary Public for the State of Alabama to me known and known to me to be the persons described as the incorporators in and who executed the foregoing certificate of incorporation and severally acknowledge the said certificate of incorporation to be the act and deed of the signers respectively and that the facts therein stated are truly set forth.

_______________________
Notary Public

(b) Bylaws. -The following form of bylaws may be adopted and used by any association without specific approval of the Commissioner. 1. Annual meetings of members. 2. Special meetings of members. 3. Notice of meetings of members. 4. Election of directors. 5. Meetings of the board of directors. 6. Resignation and removal of directors. 7. Compensation of directors. 8. Executive and other committees. 9. Officers. 10. Execution of instruments. 11. Membership. 12. Corporate seal. 13. Fiscal year. 14. Amendments.

BYLAWS ____________ SAVINGS AND LOAN ASSOCIATION_______________1. Annual Meetings of Members . The annual meeting of the members of the association for the election of directors and for the transaction of any other business of the association shall be held at its office at 2 o'clock in the afternoon on the last Monday in January in each year if not a legal holiday or, if a legal holiday, then on the next succeeding day not a legal holiday. The annual meeting may be held at such other time on such day or at such other place in the same community as the board of directors may determine, but, in such event, at least ten days' written notice thereof shall be sent to each member at his last known address appearing upon the membership book of the association. At each annual meeting, the officers shall make a full report of the financial condition of the association and of its progress for the preceding year, and shall outline a program for the succeeding year. 2. Special Meetings of Members . A special meeting of the members of the association may be called at any time by the chairman of the board of directors, the president, or secretary, or the board of directors, and shall be called by the president, a vice president or the secretary upon the written request of members of record holding, in the aggregate, at least one-tenth of the capital of the association. Such written request shall state the purposes of the meeting and shall be delivered at the home office of the association addressed to the president. 3. Notice of Meetings of Members. Except as hereinabove provided, no notice of annual meetings of members need be given to members. Notice of each special meeting of members shall state the purpose for which the meeting is called, the place of meeting, and the time when it shall convene and shall be published once a week for two successive calendar weeks (in which instance on any day of the week), prior to the date on which such special meeting shall convene, in a newspaper printed in the English language and of general circulation in the county in which the home office of the association is located. In addition to such publication of such notice, a copy thereof shall be posted in a conspicuous place in the home office of the association during the fourteen days immediately preceding the date on which such special meeting shall convene. A copy of such notice may be mailed by the association, postage prepaid, at least fifteen days and not more than thirty days prior to the date on which such special meeting shall convene to all members of record of the association at their last address appearing upon the membership book of the association, but such mailing shall not be a condition precedent to, nor shall any defect therein affect the validity of any such special meeting. If any member, in person or by attorney thereunto authorized, shall waive, in writing, notice of any special meeting of members, notice thereof need not be given to such member. 4. Election of Directors . If the members at any annual meeting so determine and until rescinded by members at any annual meeting, directors of such association shall be nominated in accordance with the following provisions: 'The president, at least thirty days prior to the date of each annual meeting shall appoint a nominating committee of three persons who are members of the association. Such committee shall make nominations for directors in writing, and deliver to the secretary such written nominations at least fifteen days prior to the date of the annual meeting, which nominations shall forthwith be posted in a prominent place in the home office for the fifteen days' period prior to the date of the annual meeting. Provided such committee is appointed and makes such nominations, no nominations for directors except those made by the nominating committee shall be voted upon at the annual meeting unless other nominations by members are made in writing and delivered to the secretary of the association at least ten days prior to the date of the annual meeting, which nominations shall forthwith be posted in a prominent place in the home office for the ten days' period prior to the date of the annual meeting. Ballots bearing the names of all persons nominated by the nominating committee or by other members prior to the annual meeting shall be provided for use by the members at the annual meeting. If at any time the president shall fail to appoint such nominating committee or the nominating committee shall fail or refuse to act at least fifteen days prior to the annual meeting, nominations for directors may be made at the annual meeting by any member and shall be voted upon.' 5. Meetings of the Board of Directors . The board of directors shall meet regularly without notice at the home office of the association at least once each month at the hour and date fixed by resolution of the board of directors; provided, that the place of meeting may be changed by resolution of the board of directors. Special meetings of the board of directors may be held at any place in the territory in which the association may make loans specified in a notice of such meeting and shall be called by the secretary upon the written request of the president, or of three directors. All special meetings shall be held upon at least three days' written notice to each director unless notice be waived in writing before or after such meeting. Such notice shall state the place, time and purposes of such meeting. No notice need be given of any meeting at which every director shall be present. A majority of the directors shall constitute a quorum for the transaction of business. The act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors. In the absence of a quorum, the directors present at the time and place of any meeting may adjourn such meeting from time to time until a quorum is present. No notice of any such adjourned meeting need be given. All meetings of the members and of the board of directors shall be conducted in accordance with Robert's Rules of Order. 6. Resignation and Removal of Directors . Any director may resign at any time by sending a written notice of such resignation to the office of the association addressed to the secretary. Unless otherwise specified therein, such resignation shall take effect upon receipt thereof by the secretary. Any director may be removed either with or without cause at any time by the majority of all votes cast at any annual meeting of members, or at any special meeting of members called for such purpose. Any director may be removed for cause by a two-thirds vote of the entire board of directors at any regular meeting or at any special meeting called for such purpose. Resignation of a director may be required by an affirmative vote of the board of directors upon three consecutive absences from regular meetings of the board of directors. 7. Compensation of Directors . The board of directors, by resolution, may provide a fixed sum to be paid to directors for attendance and may authorize the payment of the expenses of attendance at regular and special meetings of the board of directors, which compensation shall not preclude any director from serving the association in any other capacity and receiving compensation therefor. Directors, as such, shall not receive any stated salary for their services. 8. Executive and Other Committees . Each member of the executive committee, if appointed in accordance with the certificate of incorporation, shall continue in office until the first meeting of the board of directors held after the annual meeting of members next following his election and until his successor is appointed and qualified, or until death, resignation or removal, either for or without cause, at any time by the affirmative vote of a majority of the directors then in office at a regular meeting of the board of directors or at a special meeting thereof called for that purpose, or until he shall cease to be a director. The president shall preside at all meetings of the executive committee at which he shall be present. The executive committee, by resolution, may fix the time and date for the holding at the home office of the association of regular meetings without notice. Special meetings of the executive committee may be called from time to time by the president or by any two members of the executive committee. A written notice of at least three days, stating the place, time and purposes, shall be given to each member of the executive committee of each special meeting, unless notice be waived in writing before or after such meeting. If every member is present no notice need be given of any meeting. Any member of the executive committee may resign in the same manner and with the same effect as may a member of the board of directors. The board of directors may appoint another director to fill any vacancy occurring in the executive committee. The presence at any meeting of the executive committee of a majority of the members thereof then in office shall be necessary and sufficient to constitute a quorum for the transaction of business. A majority of such quorum may decide any questions that may come before any such meeting. The secretary of the association shall be ex officio secretary of the executive committee and shall maintain accurate minutes of all resolutions adopted by the executive committee. The secretary shall read the minutes of all meetings of the executive committee at, and report to, each regular meeting of the board of directors all action taken by the executive committee since the last preceding regular meeting of the board of directors. All action by the executive committee and by other committees of the association shall be governed by Robert's Rules of Order. 9. Officers . a. Officers and employees. At the annual meeting of the board of directors; which may be held without notice at the home office of the association immediately following the annual meeting of members, and which shall be held within thirty days after the annual meeting of members, a president, one or more vice presidents, a secretary and a treasurer shall be elected. The board of directors may appoint such additional officers and employees as it may from time to time determine. It may elect a chairman of the board of directors from among the directors. The president shall be chosen from among the directors. The offices of secretary and treasurer may be held by the same person and a vice president may also be either the secretary or the treasurer. The term of office of all officers shall be one year or until their respective successors are elected and qualified; but any officer may be removed at any time by the board of directors for or without cause. The officers shall have such powers and duties as are specified in the bylaws and as generally pertain to their respective offices, as well as such powers and duties as from time to time may be conferred by the board of directors. b. Chairman of the board of directors and president. (1) Chairman of the board of directors. If the members of the association elect a chairman of the board of directors, he shall preside at all meetings of the board of directors, if present, and may exercise any and all powers and perform any and all duties pertaining to the office of president, which the board of directors by resolution confer upon him. He shall have such other powers and duties as may from time to time be assigned to him by the board of directors. (2) President. The president shall be the chief executive officer of the association and, subject to the control of the board of directors, shall have general charge of the business affairs and property of the association and control over its several officers. The president shall preside at all meetings of members and, in the absence of the chairman of the board of directors, at all meetings of the board of directors. The president shall do and perform such other duties and may exercise such other powers as from time to time may be assigned to him by the board of directors. c. Vice presidents. At the request of the president or in his absence or disability the vice president or, in case there shall be more than one vice president, the vice president designated by the president (or in the absence of such designation, the vice president designated by the board of directors, or the executive committee) shall perform all the duties of the president and when so acting shall have all the powers and shall be subject to all the restrictions upon the president. Any vice president shall perform such other duties and may exercise such other powers as from time to time may be assigned to him by the president or the board of directors. d. The secretary. The secretary shall: (1) Keep the minutes of the meetings of the members, the board of directors, and the executive committee and cause the same to be recorded in books provided for that purpose. (2) Prepare or cause to be prepared and submit to the chairman of each meeting of the members, a certified list, in alphabetical order, of the names of the members entitled to vote at such meeting, together with the number of votes which each member is entitled to cast. (3) See that all notices are duly given in accordance with the provisions of these bylaws and the Savings and Loan Act. (4) Be custodian of the records of the association and of the seal of the association and see that the seal is affixed to all documents the execution of which on behalf of the association under its seal shall have been duly authorized. (5) See that all books, reports, statements, certificates and all other documents and records required by law to be kept or filed are properly kept or filed; and (6) In general, perform all duties and have all powers incident to the office of secretary and perform such other duties and have such other powers as from time to time may be assigned to him by the president or the board of directors. e. Assistant secretaries. The assistant secretaries shall have such duties as from time to time may be assigned to them by the secretary or the board of directors. f. The treasurer. The treasurer shall: (1) Have supervision over the funds, securities, receipts and disbursements of the association. (2) Cause all moneys and other valuable effects to be deposited in the name and to the credit of the association in such banks or trust companies or with such bankers or other depositaries as shall be selected by the board of directors or pursuant to authority conferred by the board of directors. (3) Cause the funds of the association to be disbursed by check or drafts upon the authorized depositaries of the association when such disbursements shall have been duly authorized. (4) Cause to be taken and preserved proper vouchers for all moneys disbursed. (5) Cause to be kept at the office of the association correct books of account of all its business and transactions. (6) Render to the president, the board of directors or the executive committee, whenever requested, an account of the financial condition of the association and of his transactions as treasurer. (7) Be empowered from time to time to require from the officers and agents of the association reports or statements giving such information as he may desire with respect to any and all financial transactions of the association; and (8) In general, perform all duties and have all powers incident to the office of the treasurer and perform such other duties and have such other powers as from time to time may be assigned to him by the president or the board of directors. g. Assistant treasurers. The assistant treasurers shall have such duties as from time to time may be assigned to them by the treasurer or the board of directors. 10. Execution of Instruments. All contracts, notes, drafts, acceptances, checks, endorsements, assignments, releases, deeds, all evidences of indebtedness of the association and all documents, instruments or writings of any nature, shall be signed, executed, verified, acknowledged and delivered by such officers, agents or employees of the association, or any one of them, in such manner as from time to time may be determined by resolution of the board of directors. Proxies to vote with respect to securities owned by the association may be executed and delivered from time to time by the president, a vice president, the secretary or treasurer of the association, or by any other person thereunto authorized by resolution of the board of directors. 11. Membership of Certificates. Any officer or employee designated by the board of directors shall manually sign and deliver to each investor in and borrower from the association at the time such investor makes initial payment on an account, or a loan to any such borrower is made, respectively, membership certificates in the proper form as prescribed in the Savings and Loan Act. Membership certificates shall be numbered consecutively by type or otherwise. The officer or employee signing a membership certificate shall enter the name of the member thereon. Joint investors and joint borrowers constitute a single membership. 12. Corporate Seal. The seal shall be two concentric circles between which shall be the name of the association. The year of incorporation, and the name of this state, shall, and an emblem may, appear in the center. 13. Fiscal year. The fiscal year shall be the calendar year. 14. Amendments. Amendments of these bylaws may be made, from time to time, as provided in the Savings and Loan Act. We, the undersigned, being the incorporators of the ______________ Savings and Loan Association, this ____ day of _________, 19______.

______________________
______________________
______________________
______________________
______________________
STATE OF ALABAMA
COUNTY OF ________________}SS

On this ______ day of ___________, 19__, before me _____________________, a Notary Public in and for the State of Alabama, personally appeared to me known and known to me to be the persons described as the incorporators in the certificate of incorporation of the ____________ Savings and Loan Association and who severally acknowledged the foregoing bylaws to be the act and deed of the signers thereof respectively.

_____________________
Notary Public

(c) Merger agreement. -The following form of merger agreement may be used by any associations proposing to merge, and when so used shall be a lawful form of merger agreement and shall be given legal effect in accordance with its terms and provisions, but shall not preclude the use of any other form approved by the Commissioner:

AGREEMENT made this _____ day of ___________, 19__, by and between ________ Savings and Loan Association _______________, ( _______________ Savings and Loan Association ____________ ) and _________________ Savings and Loan Association __________, which contracting parties are hereafter termed 'merging associations'; WHEREAS, the board of directors of the merging associations has approved a plan of merger by a majority vote of each of the separate boards to be evidenced by this agreement and have authorized the undersigned officers to execute this agreement in the name and on behalf of the merging associations and to obtain the approval of the Commissioner to the plan of merger; NOW, THEREFORE, in consideration of the mutual advantages which will inure to all parties interested and the terms and conditions hereinafter set forth, the parties hereto agree as follows: 1. The name, style, and title of the association into which the associations are merged shall be the ____________ Savings and Loan Association ______________(hereinafter termed the 'association'). 2. The association shall operate under a certificate of incorporation in the form prescribed in Section 5-16-6 of the Code of Alabama, which shall be deemed to be a continuation of the charter of that association into which the other merging associations are absorbed. 3. The number of directors of the association shall be _____, and the names and residents of those who are chosen to serve until the first annual meeting of the members are: NAME RESIDENCE 4. The bylaws of the association shall be in form hereto annexed. 5. The board of directors of the association is authorized and directed to cause to be issued membership certificates to the members of the merging associations in accordance with the terms of this agreement. 6. The manner of converting capital of the merging associations into that of the association shall be as follows: (a) The association shall issue to the account holders of the merging associations, the corporate existence of which are terminated by the merger, membership certificates evidencing accounts pro rata to the participation value of the accounts of each of such account holders as of the date of the current balance sheets of each of the merging associations, plus payments thereon and dividends credited thereto after such date, minus any sums repurchased or redeemed on such accounts after such date, as shown on the attached pro forma balance sheet and schedules, giving effect to the merger. (b) The association shall issue to each borrowing member of the merging associations, the corporate existence of which are terminated by the merger, membership certificates in the merged association evidencing their membership therein as borrowers therefrom. 7. The home office of the association shall be in the City of _______________, County of _______________, State of Alabama. 8. Annexed hereto and made a part hereof as exhibits are balance sheets of the merging associations dated ___________, 19__, certified by the treasurers of the several associations and pro forma balance sheet of the association dates ___________, 19___, giving effect to the proposed plan of merger. 9. This agreement shall not be effective unless approved by the Commissioner. The effective date of the merger shall be the date upon which this proposed plan of merger shall be approved by the Commissioner. IN WITNESS WHEREOF the contracting parties to this agreement have in pursuance of a resolution duly adopted at a legal meeting of the board of directors of each of the merging associations, caused these presents to be signed in the names of the respective merging associations by their respective presidents or vice presidents and their respective secretaries or assistant secretaries, all duly authorized thereunto, the day and year first above mentioned.

The above form is to be signed by the president or vice president and secretary or assistant secretary of each association, party to the merger, under the proper name of their respective associations, and acknowledged as required in Section 5-16-29.

(d) A form substantially as follows is prescribed for use by the Commissioner pursuant to Section 5-16-5:

APPROVAL OF CERTIFICATE OF INCORPORATION AND BYLAWS I, ________________, Savings and Loan Commissioner of the State of Alabama, do hereby certify that, by resolution dated _________, the Savings and Loan Board approved the incorporation of _________ Saving and Loan Association ________________________, and determined that: (1) The provisions of the Savings and Loan Act have been complied with. (2) The certificate of incorporation and bylaws conform to the provisions of the Savings and Loan Act. (3) The directors named in the certificate of incorporation are persons of good character and responsibility, and have the experience and general fitness to engage in the savings and loan business. (4) A necessity exists for such an association in the community to be served. (5) There is a reasonable probability of the usefulness and success of the association. (6) The incorporation of such association will not unduly injure any properly conducted existing association, in the same or neighboring communities. The incorporation of _______________ Savings and Loan Association ______________ is hereby approved. IN WITNESS WHEREOF I have hereunto set my hand and the seal of my office, this ____ day of _____________, 19______

(SEAL)_________________________
Savings and Loan Commissioner.

(e) A form substantially as follows is prescribed for use by the Commissioner pursuant to Section 5-16-10:

APPROVAL OF CHANGE OF LOCATION OF OFFICE

I, _________________________ Savings and Loan Commissioner of the State of Alabama, hereby certify that the change of location of the home office of _______________ Savings and Loan Association _____________, from _______________ to ________________, has been approved in accordance with law, to wit: Such change of location of the home office will not unduly injure any properly conducted existing association in the same or neighboring communities; There is a reasonable probability of the usefulness and success of the association at such new location. IN WITNESS WHEREOF, I have hereunto set my hand and seal of my office, this ______ day of ____________, 19___.

(SEAL)_____________________
Savings and Loan Commissioner



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §257.)Section 5-16-5

Section 5-16-5
Procedure for incorporation — Approval of petition for certificate of incorporation; certificate of approval.

Upon the receipt by the commissioner of a petition for a certificate of incorporation signed and acknowledged as provided in Section 5-16-4, accompanied by the incorporation fee, the commissioner shall immediately inquire into the advisability of issuing a certificate of approval of the incorporation of such association and shall thereupon recommend to the board the approval or disapproval of the incorporation. The commissioner shall immediately forward his recommendations regarding the incorporation with his reasons therefor to the board, and his records shall be available to the board at all times. The board shall promptly inquire into the advisability of the issuance of a certificate by the commissioner of approval of the incorporation of such association and, either after hearing or without hearing, promptly shall approve or disapprove the incorporation. If the board approves the incorporation, the commissioner shall issue a certificate of approval in substantially the form provided in subsection (d) of Section 5-16-49.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §245.)Section 5-16-50

Section 5-16-50
Deposits with State Treasurer, etc., of securities issued by associations.

Whenever under the laws of the State of Alabama any person, firm, corporation, association or other legal entity organized under the laws of this state or any other state of the United States or of any foreign country, including, but not limited to, insurance companies, guaranty companies, hospital associations, mutual aid, benefit or industrial companies or associations and trust companies, but including any legal entity which is required or authorized to deposit such securities, is required or authorized to deposit securities with the State Treasurer or other state agency, in addition to the kinds of securities now authorized by law to be so deposited, there may be also deposited investment share accounts or similar securities issued by any savings and loan association chartered by the State of Alabama or by the United States government and doing business in the State of Alabama investments in which are guaranteed as to principal by the United States government or insured as to principal by any instrumentality or agency thereof, provided the amount of such securities so deposited shall not exceed the amount insured by any such instrumentality or agency.



(Acts 1943, No. 444, p. 407.)Section 5-16-51

Section 5-16-51
Associations empowered to enter into contracts, etc., for insurance of accounts, etc.

Any savings and loan association now or hereafter organized under the laws of this state is hereby empowered, on the authority of its board of directors or a majority thereof, to enter into such contracts, incur such obligations and generally to do and perform any and all such acts and things whatsoever as may be necessary or appropriate in order to take advantage of any and all memberships, loans, subscriptions, contracts, grants, rights or privileges which may at any time be available or inure to savings and loan associations or to their members, creditors, conservators, receivers or liquidators by virtue of the provisions of the federal statute which established the Federal Home Loan Bank or the Federal Savings and Loan Insurance Corporation and provided for the insurance of accounts of any savings and loan association or of any other provisions of that or any other act or resolution of congress to aid, regulate or safeguard savings and loan associations and its members, including any amendments to the same or any substitutions therefor and, also, to subscribe for and acquire any stock, debentures, bonds or other types of securities of the said corporation and to comply with the lawful regulations and requirements from time to time issued by such corporation.



(Acts 1945, No. 120, p. 113, §1.)Section 5-16-52

Section 5-16-52
State associations may make contracts, loans or investments available to federal savings and loan associations.

Any savings and loan association which is organized under and by virtue of applicable statutes of the State of Alabama and operating under the laws of the State of Alabama may make any contract, loan or investment which such association could make were it incorporated and operating as a federal savings and loan association with its domicile in this state.



(Acts 1945, No. 120, p. 113, §2.)Section 5-16-53

Section 5-16-53
Termination of status as insured corporation.

Any savings and loan association chartered by the laws of the State of Alabama having its accounts insured with the Federal Savings and Loan Insurance Corporation may, with the approval of a majority of the Savings and Loan Board of the State of Alabama, terminate its status as an insured corporation, upon majority vote of its board of directors or other similar governing body which is lawfully authorized to act for the institution and upon the insured association's complying with such regulations as the Savings and Loan Board of the State of Alabama may prescribe. On the termination of insurance, such association shall continue as a state chartered institution and shall be subject to the supervision and control of the Savings and Loan Commissioner of the State of Alabama.



(Acts 1945, No. 119, p. 112.)Section 5-16-6

Section 5-16-6
Procedure for incorporation - Issuance of certificate of incorporation.

The commissioner shall issue to every association hereafter incorporated pursuant to this chapter a certificate of incorporation as follows:

'Certificate of Incorporation of _______ Savings and Loan Association. I, _______, Savings and Loan Commissioner of the State of Alabama, do hereby certify that _______ Savings and Loan Association, whose home office is located in _______, County of _______, State of Alabama, is duly incorporated under the provisions of law applicable to savings and loan associations and is legally authorized to operate and do business as a savings and loan association under the laws of this state. In Witness Whereof, I hereunto set my hand and the seal of my office, this the ___ day of _______, 19__ . (Seal) _______ Savings and Loan Commissioner.'



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §213.)Section 5-16-7

Section 5-16-7
Bylaws.

The bylaws of every association shall provide the dates of regular meetings of members, the notice, if any, to be given, the manner of calling special meetings and the notice to be given. The bylaws shall provide for meetings of the board of directors, which meetings shall be held not less frequently than once a month, and for the resignation and removal of directors. The bylaws may provide for an executive committee which shall have the powers of the board of directors between meetings of the board of directors. The bylaws shall provide that the board of directors at their annual meeting, which shall be held within 30 days after the annual meeting of members, shall elect a president, one or more vice-presidents, a secretary, a treasurer and such additional officers as the board of directors may from time to time determine; provided, that the offices of secretary and treasurer may be held by the same person, and a vice-president may be either the secretary or the treasurer. The bylaws shall prescribe the duties and powers of the officers of the association. The bylaws shall prescribe the method whereby written instruments shall be executed. The bylaws shall prescribe the manner in which membership certificates shall be signed and delivered; provided, that the bylaws shall provide that such membership certificates shall be manually signed by an officer or employee of the association designated by the board of directors. The bylaws shall set forth the corporate seal of the association, which shall be two concentric circles between which shall be the name of the association. The year of incorporation and the name of the state shall, and an emblem may, appear in the center. The bylaws shall prescribe the fiscal year, which shall be the calendar year. The bylaws of an association may be amended at any time by a two-thirds affirmative vote of the board of directors or by a vote of the members of the association; provided, that no such amendment to the bylaws shall be effective unless and until the commissioner has given his written approval to such amendment, unless the commissioner shall fail to either approve or disapprove any such amendment within a period of 60 days from the time such amendment is submitted to the commissioner for approval, in which event the amendment shall become effective as of the expiration of such 60-day period; provided further, that the bylaws may be amended changing the day or hour of the annual meeting of members without the consent of the commissioner if at least 10 days' written notice of such change of date or time of meeting shall have been sent to each member at his last known address appearing on the books of the association; and provided further, that the members may, at any regular meeting or special meeting called for that purpose, adopt or abolish any or all of the bonus plans provided in Section 5-16-27 without the approval of the commissioner. If the commissioner shall disapprove any proposed bylaw amendment, the association may appeal from such action to the Savings and Loan Board.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §214.)Section 5-16-8

Section 5-16-8
Organizational meeting.

Within 30 days from the issuance of the certificate of incorporation by the commissioner, the directors of the association shall hold an organization meeting and shall elect officers pursuant to the provisions of this chapter and the bylaws. At the organization meeting the directors shall take such other action as is appropriate in connection with beginning the transaction of business by the association.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §215.)Section 5-16-9

Section 5-16-9
Corporate name and offices — Generally.

(a) The name of every association shall include the words 'Savings and Loan Association.' These words shall be preceded by an appropriate descriptive word or words approved by the board. An ordinal number may not be used as a single descriptive word preceding the words 'Savings and Loan Association,' unless such words are followed by the words 'of …,' the blank being filled by the name of the town, city or county in which the association has its home office. An ordinal number may be used together with another descriptive word preceding the words 'Savings and Loan Association,' provided the other descriptive word has not been used in the corporate name of any other association in the state, in which case the suffix mentioned above is not required to be used. An ordinal number may be used together with another descriptive word preceding the words 'Savings and Loan Association' even when such other descriptive word has been used in the corporate name of an association in the state, provided the suffix 'of …,' as provided above, is also used. The suffix provided above may be used in any corporate name. The use of the words, 'National,' 'Federal' or 'United States,' separately or in any combination thereof with other words or syllables, is prohibited as part of the corporate name of an association. No certificate of incorporation of a proposed association having the same name as a corporation authorized to do business under the laws of this state or a name so nearly resembling it as to be calculated to deceive shall be issued by the commissioner, except an association formed by the reincorporation, reorganization or consolidation of other associations or upon the sale of the property or franchises of an association. An association acquiring or becoming possessed of all the estate, property, rights, privileges and franchises of any other association or associations by merger may have the same name as the association or one of the associations to whose franchises it succeeded.

(b) Without the prior approval of the commissioner, as provided in Section 5-16-11, no association shall establish any office other than its home office which shall be in the city and county named in the certificate of incorporation.

(c) The name or the location of the home office of any association fixed in the certificate of incorporation may be changed in the following manner: The proposed new name or the new location of the home office of the association shall be approved by a resolution adopted by a majority of the entire board of directors.

(d) Immediately preceding application to the commissioner for approval, notice of intention to change the name or the location of the home office, signed by two officers, shall be published, once a week for two successive weeks, in a newspaper printed in the English language of general circulation in the county in which the home office is located, and a copy of such notice shall be displayed during such consecutive two-week period in a conspicuous place in the home office of the association.

(e) Five copies of an application to the commissioner for approval shall be signed and acknowledged, before an officer competent to take acknowledgments of deeds, by two officers of the association and filed with the commissioner. Upon approval, the commissioner shall endorse on each copy of the application therefor a certificate of approval thereof. Upon such approval, the name of such association shall be immediately changed. Upon approval of an application for change of location of the home office of an association, the commissioner shall endorse on each copy of such application a certificate of approval, as provided in Section 5-16-10.

(f) When the commissioner shall have endorsed such an approval upon the copies of an application for approval of change of name or change of location of home office, he shall file one copy thereof with the Secretary of State, two copies with the Federal Home Loan Bank of which the association is a member, return one copy to the applicant association and retain the original copy of the application in the permanent files of his office.



(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §216.)

USA Statutes : alabama