N.Y. Banking Law § 388: Fines and penalties for failure to make payments on instalment shares

§ 388. Fines and penalties for failure to make payments on instalment

shares. 1. Where dividends on instalment shares are credited by series,

a savings and loan association may impose fines upon the holders of

instalment shares of a series, their legal representatives or successors

in interest, if they neglect to pay dues, interest or premium when due,

but such fines shall not exceed one per centum per month of the amount

in default for the period during which such dues, interest and premium

shall have remained in default, except that a fine at the rate of two

per centum per month of the amount in default may be imposed during the

first three months of any default.

2. Where dividends on instalment shares are credited individually to

shares, a savings and loan association may declare a lower rate of

dividend on instalment shares upon which there has been a default for

more than sixty days since the last declaration of dividends, provided

that such dividend shall be not less than sixty per centum of the

dividend declared on like instalment shares not in default.

3. Where dues on instalment shares are applied directly in reduction

of a mortgage loan, a savings and loan association may provide, as one

of the terms of the obligation, that interest may be added to the unpaid

balance of the obligation on the first day of each month and computed

upon the unpaid balance of the obligation due as of the last day of the

preceding month.

4. No fine shall be charged against or deducted from the dues actually

paid by a member and no fines or penalties other than those provided in

this section shall be imposed for failure to meet payments on instalment

shares.