N.Y. Banking Law § 378: Power to issue shares; dues thereon

§ 378. Power to issue shares; dues thereon. 1. Every savings and loan

association shall be either permanent or serial in character. A

permanent association shall be one which issues instalment shares, not

in series, and credits dividends thereon to the holders of such shares

individually. A serial association shall be one which issues instalment

shares in series and credits the dividends apportioned to such shares by

series. No additional shares shall be issued in any series after a

dividend has been credited thereto unless the person to whom such shares

shall be issued shall pay therefor the book value of such shares

including the estimated accrued dividend thereon since the close of the

preceding dividend period. Dividends credited by a serial association

upon shares issued by it other than instalment shares may be credited to

the holders of such shares individually.

2. The members of a savings and loan association shall be: (1) those

persons who are the holders of record of shares whose membership shall

continue until such shares have matured and been paid, or have been

withdrawn, retired, suspended, forfeited, or transferred; and (2) all

borrowers from the association and all persons obligated to the

association on loans whose membership shall continue until such loans or

obligations have been paid. Each member shall be entitled to at least

one vote upon all question at any meeting of such members of the

association, except when by statute the vote is required to be based

upon the capital of the association. Every member entitled to vote at a

meeting of members of the association may authorize another person or

persons to act for him by proxy, but no director, officer, clerk, teller

or bookkeeper of the savings and loan association shall act as proxy at

any meeting of such association. Every proxy must be signed by the

member or his attorney-in-fact. No proxy shall be valid after the

expiration of eleven months from the date thereof unless otherwise

provided in the proxy. Every proxy shall be revocable at the pleasure of

the member executing it. The authority of the holder of a proxy to act

shall not be revoked by the incompetence or death of the member who

executed the proxy unless, before the authority is exercised, written

notice of an adjudication of such incompetence or of such death is

received by the officer of the association responsible for maintaining

the list of members. The by-laws may prohibit or further limit proxies

for members and their duration. No director or officer of a savings and

loan association shall be eligible to act as an inspector of an election

of directors at any meeting of members of the association.

3. The capital of every such association shall consist of the dues and

dividends credited to its members upon their shares either individually

or by series, time deposits held by such association pursuant to section

three hundred seventy-eight-a of this chapter together with interest

accrued on such deposits, and demand deposits held by such association

pursuant to subdivision thirteen of section three hundred eighty-three

of this chapter.

4. Any savings and loan association may issue shares of the following

classes: (a) Instalment shares, class one, upon which regular payments

of dues shall be made as provided in the by-laws of the association,

until such shares reach their matured value or are withdrawn, retired or

forfeited; and instalment shares, class two, which shall have no

participation in dividends and upon which the dues payable in regularly

increasing amounts are applied in reduction of a debt due to the

association from the holder of such shares in accordance with a

direction given by him.

(b) Savings shares, upon which dues shall be paid in such sums, at

such times and for such purposes as the holder thereof may elect, until

the shares are withdrawn or retired. Upon the request of the holder

thereof, such savings shares may be converted by the issuing association

into special savings shares authorized for issuance by paragraph (bb) of

this subdivision. The association may enter such conversion in its

records and on the evidence of ownership of the savings shares as an

alternative to withdrawal or retirement of the savings shares and

issuance of special savings shares.

(bb) Subject to such limitations and restrictions as may be prescribed

by regulation of the superintendent of financial services, special

savings shares, upon which dues shall be paid in such sums, at such

times and for such purposes as the holder thereof may elect, and which

shall provide that dividends shall be credited from the date of actual

receipt of such dues to the date they are withdrawn or retired.

Dividends on special savings shares shall be credited and shall be made

available no later than the end of a regular dividend period, or at the

time such special savings shares are withdrawn or retired if in the

opinion of a majority of the board of directors it appears the savings

and loan association will have sufficient profit available at the end of

such regular dividend period to pay dividends and if the board of

directors chooses payment of dividends at withdrawal as an option to

periodic payment of dividends. Any savings and loan association which

does not make dividends available pursuant to the provisions of this

paragraph shall promptly notify the superintendent of financial services

of such decision. Withdrawals or retirements of special savings shares

during the last three business days of any regular dividend period or,

in the event that any one of such last three business days is a

Saturday, withdrawals of such shares upon one of the last four business

days of any such period may receive dividends apportioned for the full

period.

(c) Accumulative prepaid shares upon which a single payment of dues to

the amount of fifty per centum or more of the matured value thereof

shall be paid at the time when such shares are issued. The whole or a

part of the dividends apportioned to such shares shall be credited

thereto until such shares are matured, withdrawn or retired. Any balance

of such dividends not so credited shall be paid in cash.

(d) Income shares, upon which a single payment of dues amounting to

one hundred dollars per share shall be paid at the time when such shares

are issued. The dividends on such shares shall be paid in cash or, in

accordance with the written order of the holder, applied to the purchase

of other shares in the association. Income shares may be issued which

shall not be withdrawable without the consent of the board of directors,

until the expiration of a fixed period, which shall be not more than ten

years. Whenever income shares are issued which are not withdrawable

until the expiration of a fixed period, a statement that they are not

withdrawable until the expiration of such fixed period shall be printed

upon the face of the certificate of shares or other evidence of

ownership in such manner as to be clearly legible. Whenever any

association is unable to locate the holder of income shares and

dividends shall have been apportioned which cannot be paid to the holder

thereof by reason of the inability of such association to locate such

holder, such association may credit such dividends as dues upon another

class of shares in the name of holder of such income shares and shall

carry such other shares and any accumulations thereon for the benefit of

such shareholder. Income shares which are not withdrawable until the

expiration of a fixed period shall be termed "income shares, class two."

Other income shares shall be termed "income shares, class one."

(e) Cumulative income shares upon which a single payment of dues of

not less than one hundred dollars shall be paid at the time such shares

are issued. The dividends on such shares may be credited thereto until

such shares are matured, withdrawn or retired. Cumulative income shares

may be issued which shall not be withdrawable without the consent of the

board of directors, until the expiration of a fixed period, which shall

be not more than ten years nor less than ninety days. Whenever

cumulative income shares are issued which are not withdrawable until the

expiration of a fixed period, a statement that they are not withdrawable

until the expiration of such fixed period shall be printed upon the face

of the certificate of shares or other evidence of ownership in such

manner as to be clearly legible. Cumulative income shares which are not

withdrawable until the expiration of a fixed period shall be termed

"cumulative income shares, class two." Other cumulative income shares

shall be termed "cumulative income shares, class one."

5. All shares hereafter issued by any savings and loan association

shall have a matured value of one hundred dollars, except that

instalment shares may be issued having a matured value of not less than

one hundred nor more than two hundred fifty dollars.

6. Shares issued in the name of more than one person shall confer no

greater voting rights than if issued in the name of one person.

7. Persons who hold shares in a fiduciary capacity shall have all the

rights and privileges of membership, except to hold office.

8. A savings and loan association shall have a lien upon the shares of

its members to the extent of any lawful fines or other obligations due

to it, whether or not such shares are specifically transferred or

pledged to it, and may, at its option, after five days' notice to the

member, apply such shares toward the payment of any matured obligations

due it.

9. A savings and loan association may in its discretion accept or

refuse advance payments of dues.

10. Notwithstanding any provision of this chapter, a savings and loan

association, in its organization certificate, by-laws, advertising

matter or any other instrument, document or other writing used in or in

connection with its business, may designate its shares as "deposit

accounts" or "savings accounts" its members as "depositors", its dues or

share payments as "deposits", and its capital as "deposit liability".

The use of any term permitted by this subdivision shall not affect any

right, duty, privilege or liability which the savings and loan

association, any member or any depositor would otherwise have.