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ments of the Grand Army of the Republic to be held in Michigan in nineteen hundred twenty-five.

purposes.

SEC. 2. There is hereby appropriated out of the general Amounts and fund the sum of fifteen thousand dollars to carry out the provisions of this act as to the national encampment of the Grand Army of the Republic and the further sum of three ́thousand dollars is hereby appropriated out of the general fund to carry out the provisions of this act as to the state encampment of the Grand Army of the Republic, and the auditor general is hereby authorized to draw his warrant upon the state treasurer in payment of such sums, and to such persons as the state administrative board shall direct, not exceeding the amount appropriated in this act.

This act is ordered to take immediate effect.
Approved May 6, 1925.

[No. 207.]

AN ACT to amend sections two, five, eight, nine, ten, eleven, eighteen, twenty, twenty-three, twenty-four and twentynine of act number fifty of the public acts of eighteen hundred eighty-seven, as amended, entitled "An act to provide for the incorporation and regulation of certain corporations generally known as building and loan associations," same being sections nine thousand nine hundred ninety-six, nine thousand nine hundred ninety-nine, ten thousand two, ten thousand three, ten thousand four, ten thousand five, ten thousand twelve, ten thousand fourteen, ten thousand seventeen, ten thousand eighteen and ten thousand twentythree of the compiled laws of nineteen hundred fifteen.

The People of the State of Michigan enact:

SECTION 1. Section two, five, eight, nine, ten, eleven, Sections eighteen, twenty, twenty-three, twenty-four and twenty-nine amended. of act number fifty of the public acts of eighteen hundred eighty-seven, as amended, entitled "An act to provide for the incorporation and regulation of certain corporations generally known as building and loan associations," same being sections nine thousand nine hundred ninety-six, nine thousand nine hundred ninety-nine, ten thousand two, ten thousand three, ten thousand four, ten thousand five, ten thousand twelve, ten thousand fourteen, ten thousand seventeen, ten thousand eighteen and ten thousand twenty-three of the compiled laws of nineteen hundred fifteen, are hereby amended to read as follows:

SEC. 2. When executed as aforesaid, said articles of associa- Articles of tion shall be filed with the secretary of state, who shall im- association, mediately examine into all the facts connected with the formation of the proposed corporation, including its location and

filing, etc.

May refuse to record.

Appeal

board, who to comprise.

Witnesses, may subpoena.

incorporators, and if it appears that such corporation, if formed, will be lawfully entitled to commence the business which it is entitled under the law to conduct, the secretary of state shall record such articles of association. But the secretary of state may refuse to record such articles if he has reason to believe that the proposed corporation is to be formed for any other than legitimate building and loan business, or that the character and general fitness of the persons proposed as incorporators are not such as to command the confidence of the community in which such corporation is to be located, or that the public convenience and advantage will not be promoted by its establishment. From any such adverse decision of the secretary of state an appeal may be taken to a board composed of the governor, state treasurer and attorney general. The decision of such board shall be final and the secretary of state shall record or reject such articles of incorporation in accordance with such decision. Such board shall prescribe the rules and procedure under which all appeals shall be made and heard. Such board shall have power to issue subpoenas for the attendance of witnesses to testify before said board in any matter pending before it. Whoever being so subpoenaed shall fail to appear, or appearing shall refuse to testify, shall be subject to like proceedings and penalties for contempt as witnesses in actions pending before a circuit. court. Said board may also apply to any circuit court of the state for compulsory appearance to enforce obedience to any subpoena issued by said board and properly served upon the person named therein, in the same manner as compliance with an order of said court might be enforced under the laws of the state pertaining thereto. Each witness who appears before the board shall receive for his attendance, the fees and mileage provided for witnesses in civil cases in the circuit court, not limited, however, by county lines, which shall be paid out of moneys provided for the expenses of supervision of building and loan associations upon the presentation of a proper voucher sworn to by such witness, approved by the secretary of state and audited by the board of state auditors. A copy of the articles of association duly authenticated under the hand and seal of the secretary of state shall be recorded in the office of the register of deeds in the county in which the principal office of such association is located. Upon the recording of such copy the persons named therein, their associates and successors, shall become a corporate body for the period for which they are organized and shall exercise such powers as are herein granted and such other powers as are necessary to enable such association to carry out the purpose of its organization, not inconsistent with the provisions of Proviso, fl- this act: Provided, That before such association shall proceed to business it shall adopt by-laws for the regulation and management of its business which by-laws shall not become operative until a copy thereof duly certified by the president

Fees, etc.

Articles, where recorded.

When body corporate.

ing of by

laws.

and secretary of the association shall have been approved by and filed with the secretary of state.

etc.

SEC. 5. The authorized capital stock of such association Shares, inshall be divided into shares having a par value of not less stallments, than twenty-five dollars, nor more than two hundred dollars each, payable in periodical installments, as the by-laws may provide: Provided, That the by-laws may provide for the Proviso. advance payment of installment dues and for which there may be issued an advance payment certificate. The shares Shares, how

fee.

where

sonal
erty.

lien.

prop

may be issued in series, or at any time as the by-laws shall issued. determine, and subscriptions therefor shall be made payable to the association. No membership fee in excess of three Membership dollars, the actual amount of which to be determined by the secretary of state, may be charged for each one hundred dollars of capital stock subscribed nor shall stock or membership certificates be sold or transferred on commission nor at a premium either directly or indirectly. All moneys received Moneys, from whatever sources, including membership fees, shall be credited. paid into the treasury of the association and disbursed by the proper officers as provided by the by-laws. Said shares Shares, pershall be deemed personal property, transferable the upon books of the association in the manner prescribed in the bylaws, and shall be paid off and retired as the by-laws shall direct. Every share shall be subject to a lien for the payment Subject to of unpaid dues and such other charges as may be lawfully incurred thereon under the provisions of this act, and the by-laws may prescribe the manner of enforcing such lien. New New shares shares may be issued in lieu of shares matured, withdrawn, matured, etc. retired or forfeited; but at no time shall the shares issued and in force exceed the aggregate number of shares into which the authorized capital stock is divided as designated in the articles of association: Provided further, That any building Further and loan association heretofore or hereafter incorporated proviso, inunder the laws of this state may, by a resolution adopted by capital, etc. a two-thirds vote of shares represented and voting at any annual meeting, or at any meeting called for that purpose, increase its authorized capital stock and shares, or amend its articles of association, or by-laws, in any manner not inconsistent with the provisions of this act; but no such increase of authorized capital stock nor amendments shall have effect until a copy of such resolution, certified by the president and secretary of the association, shall be filed and recorded in the same manner as is provided in section two of this act for the filing and recording of original articles of association and the filing of by-laws.

in lieu of

crease of

SEC. 8. At such times as the by-laws shall designate, not Loans. less frequently than once a month, the board of directors shall hold meetings, at which the funds in the treasury available. for loans shall be loaned. No loans shall be made by such association to anyone not a member thereof (except as hereinafter provided), nor to any member for an amount greater than the par value of the shares held by such member.

Security.

Proviso.

Further proviso.

When right

to loan forfeited.

when in arrears.

Borrowers shall be required to give real estate security unincumbered except by the prior liens held by such association accompanied by a transfer and pledge to the association of the shares borrowed upon as collateral security for the repayment of the loan: Provided, That no loan made upon real estate security shall exceed in amount two-thirds of the appraised valuation of such real estate: Provided further, That the shares of such association may be received as security for the loan of an amount not to exceed ninety per cent of the withdrawal value of such shares.

SEC. 9. If the borrower neglects to offer security satis factory to the board of directors within the time prescribed by the by-laws his or her right to the loan shall be forfeited, and he or she shall be charged with interest for one month, together with any expense incurred, and the money appropriated for such loan may be re-loaned at the next or any subProceedings sequent meeting. Whenever a borrowing shareholder shall be in arrears in the payment of dues or interest for more than four months, the board of directors may, at their discretion, declare the pledged shares forfeited, and the whole amount of the loan due and payable, and its collection, together with the arrears of interest and other legal charges, may be enforced by proceedings upon the security held by the association, in accordance with law: Provided, That the withdrawal value of the pledged shares, at the time of commencement of foreclosure proceedings, shall be credited upon the loan.

Proviso.

Payment

of loan.

Notice required.

Proviso,
re-transfer
of shares.

Further proviso,

1

reduction of loan.

SEC. 10. Any borrowing shareholder desiring to pay his loan either in part or in full shall have the privilege of doing so at any time. The association may require thirty days' notice of such intention to repay his loan in full. In such case the borrower shall be charged with the amount of the original loan, together with all arrearages of interest and other legal charges, and shall be given credit for the withdrawal value of his shares pledged as security; and the balance shall be received by the association in full satisfaction of said loan: Provided, That any borrower desiring to retain his or her shares and membership may repay his loan without claiming credit for the withdrawal value of said shares, whereupon said shares shall be re-transferred to him or her, and shall be free from any claim by reason of said loan: Provided further, That any borrower desiring to reduce his loan by applying the withdrawal value of his shares, pledged as security, can do so with the consent of the association and thereupon the said shares shall be and become cancelled in proportion of one share for the par value of each share so applied as a credit, and the remaining uncancelled shares may be transferred to and held as pledged shares of the then current series or date, and the obligation evidencing such loan and the mortgage given to secure the same, may not in anywise be prejudiced by any such transfer whether such transfer shall have been provided for in the obligation evidencing such loan and the mortgage securing the same or not, and after the application of

every such credit, the amount of such loan shall forthwith become reduced in accordance with the amount so applied as a credit, and such shareholders shall not thereafter be held liable for any greater amount than shall be remaining due after the application of such credits except for arrearages and penalties occasioned by the shareholder's own default.

deemed

SEC. 11. Corporations organized under this act being of the Fines, not nature of co-operative associations, therefore no fines that usurious. may accrue to the said corporation, according to the provisions of this act, shall be deemed usurious, and the same may be collected as other debts of like amount may be collected by law in this state.

deputies,

SEC. 18. The secretary of state shall have supervision of all Supervision. building and loan associations doing business in this state and shall be charged with the execution of the laws of this state relating to such associations. He may employ the necessary May employ deputies, assistants, clerks and examiners to assist him in etc. the discharge of the duties imposed upon him. He shall re- Bond. quire from each deputy, assistant, clerk and examiner appointed by him a bond of a surety company for the faithful discharge of his duties, in an amount not less than five thousand dollars. He shall fix the salaries and prescribe the duties of the deputies, assistants, clerks and examiners. The Salaries, salaries, premiums on bonds and the actual and necessary paid. etc., how traveling expenses of the deputies, assistants, clerks and examiners and all other expenses incurred by the secretary of state in the performance of the duties imposed upon him by law shall be paid out of the examination fees and other fees required to be paid by building and loan associations, except those arising under section four-a of act number eighty-five, public acts of nineteen hundred twenty-one, and the total of such payments shall in no case exceed the total sum of such fees. All expenses connected with the duties of the secretary of state when audited by the state board of auditors shall be paid by the state treasurer on the warrant of the auditor general.

of associa

SEC. 20. Once in each year, or oftener, if in the opinion of Examination the secretary of state it shall be necessary, the secretary of tions. state shall make, or cause to be made, an examination into the affairs of all building and loan associations doing business in this state. Such examinations shall be full and complete, and in making the same the examiner shall have full access to, and may compel the production of all books, papers, and moneys, etc., of the association under examination, and may administer oaths to and examine the officers of such association, or any other person connected therewith, as to its business and affairs.

forfeited.

SEC. 23. If a shareholder be in arrears in the payment of When shares dues upon unpledged shares, the board of directors may, if the shareholder fails to pay the amount in arrears within thirty days after notice, declare said shares forfeited. The withdrawal value of said shares at the time of forfeiture shall be

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