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Application to organize by individuals.

associations.

What to set forth.

expenses, including any examination or investigation of the character and circumstances of the borrower, co-maker or surety and the drawing and taking acknowledgment of necessary papers or other expenses incurred in making the loan; no charge shall be collected unless a loan shall have been made and in no case shall such charge exceed five dollars;

Tenth, To exercise by its board of directors or duly authorized officers or agents, subject to law, all such powers as shall be necessary or appropriate to carry on the business of such industrial bank;

Eleventh, To establish branch offices or places of business within the city or village in which its principal office is located but not elsewhere.

SEC. 8. When an industrial bank is organized under the provisions of this act by individuals, an application to organize the same shall be made to the Commissioner of the Banking Department, which application shall set forth the names of the incorporators of such industrial bank, together with the business engaged in and the financial responsibility By voluntary of each of the applicants. When an industrial bank is organized under the provisions of this act by a voluntary association, an application to organize the same shall be made to the Commissioner of the Banking Department by the managing board of such association, whether such managing board be called the board of directors, the board of trustees or otherwise, which application shall set forth the name of the association, its purposes, the names of its officers, the names of the persons who compose its managing board, the amount of funds in its treasury and of what they consist, and the proposed capitalization of the bank, and attached thereto shall be a copy of the by-laws of the association, and it shall be the duty of the Commissioner of the Banking Department to verify the information and statements contained in any application within sixty days from the date of receipt thereof, and if he is satisfied as to the responsibility and fitness of the applicant or applicants, he shall approve the application and shall notify such applicant or applicants of his approval. If, however, the commissioner is not satisCommissioner fied as to the responsibility or fitness of the applicant or applicants, he may disapprove the application and shall refuse to accept or authorize the filing of articles of incorporation.

Copy of by-laws.

How and when approved.

may disapprove.

Articles,

where filed.

SEC. 9. If the application provided for by section eight herein is approved, articles of incorporation may thereupon be filed with the Commissioner of the Banking Department. Commissioner When the industrial bank transmitting the same notifies the commissioner that at least fifty per cent of its capital has been duly paid in, and that such industrial bank has complied with all the provisions of this act required before the bank shall be authorized to commence business, the commis

to examine.

Authority to business.

commence

The Expense of examination.

of articles.

sioner shall examine into the condition of such industrial bank, ascertain the amount of money paid in on account of its capital, the name and place of residence of each of its directors, and when the bank is organized by individuals, the amount of capital stock owned in good faith by each director and whether such bank has complied with all the other provisions of this act required to entitle it to engage in business. If upon such examination it appears that such industrial bank is lawfully entitled to commence business, the commissioner shall, within thirty days after receiving notice that fifty per cent of its capital has been paid in, give to such industrial 'bank a certificate under his hand and official seal that such industrial bank is authorized to commence business. expenses of making the examination required herein shall be paid by such industrial bank, which expenses, however, shall not exceed ten dollars a day for the services of each examiner, together with actual expenses incurred in the examination. SEC. 10. An industrial bank may amend its articles of Amendment association in any manner not inconsistent with the provisions of this act, at any meeting duly called for that purpose, by a vote of its stockholders representing two-thirds of its capital, when such bank is organized by individuals, or by a vote of two-thirds of the members of the association present and voting when the bank is organized by a voluntary association. No amendment made to the articles of Approval by association of any industrial bank organized by a voluntary association under the provisions of this act shall be valid unless such amendment and the proceedings had by the association to call the meeting at which the amendment was made shall be approved by the Commissioner of the Banking Department. A certificate of any amendment made to the articles of association of any industrial bank, shall be executed by the officers of the bank, including a majority of its directors, and filed as required for articles of incorporation; but no increase of capital stock shall be valid until the amount thereof has been subscribed and actually paid in; and no reduction shall be made to a less amount than is required in section two for capital, nor be valid or warrant the cancellation of stock certificates, or diminish the personal liability of stockholders, or members of an association, until such reduction has been approved by the Commissioner of the Banking Department. Such approval must be based upon a finding by him that the Approval, security of existing creditors of the bank will not be impaired by the proposed reduction.

commissioner.

Certificate of where filed.

amendments,

Increase or

decrease of capital stock.

how based.

Directors.

SEC. 11. At least three-fourths of the directors of any industrial bank shall be residents of the State of Michigan, and except when the bank is organized by a voluntary association, every director shall own and hold in his own name not less than ten shares of the capital stock of such industrial bank. Every director of an industrial bank organized by Oath. individuals shall take and subscribe an oath that he will

Idem.

Where filed.

Declaring of dividends.

Examining committee.

Report in detail.

diligently and honestly perform his duties in such office, and will not knowingly violate, or permit to be violated, any provisions of this act; that he is the owner in good faith of stock of the bank, as required to qualify him for such office, standing in his name on the books of the bank, and that such stock is not pledged as security for any debt; and every director of an industrial bank organized by a voluntary association shall take and subscribe an oath that he will diligently and honestly perform his duties in such office and will not knowingly violate or permit to be violated, any provisions of this act. The oath in each case shall be transmitted to the commissioner and filed in his office.

SEC. 13. When an industrial bank is organized under this act by individuals, the board of directors may declare a dividend of so much of the net profits of the bank, after providing for all expenses, losses, interest and taxes accrued or due from said bank as they shall judge expedient, but before any such dividend is declared, not less than one-tenth of the net profits of the bank for the preceding half year, or for such period as is covered by the dividend, shall be carried to a surplus fund until such surplus shall amount to twenty per cent of its capital stock. When an industrial bank is organized by a voluntary association, the earnings and profits thereof shall be added to the assets of the bank and no part of such earnings or profits shall be used to pay a dividend to the association, or for any purpose other than the business of the bank, except with the written approval of the Commissioner of the Banking Department.

SEC. 15. The board of directors of each industrial bank shall appoint from its members or stockholders, or from the members of the association, if the bank is organized by a voluntary association, an examining committee, or committees, not including any officer who has active management of the bank, whose duty it shall be to examine the conditions of the bank at least once every year. The examining committee shall report to the board, giving in detail all items included in the assets of the bank which they have reason to believe are not of the value at which they appear on the books and records of the bank, and giving the value of each of such items as in their judgment they may have deterCopy to com- mined. The board shall make a proper record of said report in the minute books of the bank, and a duly authenticated copy thereof shall be transmitted to the Commissioner of List of stock the Banking Department. Every industrial bank organized by individuals shall at all times keep a correct list of the names of all its stockholders and once in each year, on the second Monday of April, file in the office of the county clerk and with said commissioner a correct copy of such list; and of voluntary every voluntary association which organizes an industrial bank shall on the second Monday of April in each year file a list of its members in the office of the county clerk and transmit to the Commissioner of Banking a copy thereof.

missioner.

holders of individual organization.

association.

stockholders.

liable.

Assets consti

tuting trust, liable.

of liability.

SEC. 16. The stockholders of every industrial bank organ- Liability of ized by individuals shall be individually liable, equally and ratably, and not one for another, for the benefit of the owners of unhypothecated investment certificates of said bank to the amount of their stock at the par value thereof, in addition to the said stock; and the members of a voluntary of members. association which organizes an industrial bank under the provisions of this act shall be individually liable equally and ratably, and not one for another, for the benefit of the owners of unhypothecated investment certificates of any industrial bank, organized by such voluntary association to the amount of such certificates, but persons holding stock as executors, Persons not administrators, guardians or trustees and persons holding stock as collateral security, shall not be personally liable as stockholders, or as members of a voluntary association, but the assets and funds in their hands constituting the trust shall be liable to the same extent as the testator, intestate, ward, or person interested in such trust funds would be, if living or competent to act; and any person pledging stock in an industrial bank shall be deemed the stockholder and liable under this section. The liability of a stockholder or Enforcement member of a voluntary association under this section, may be enforced in a suit at law or in equity by any such bank in process of liquidation, or by any receiver or other officer succeeding to the legal rights of said bank. SEC. 17. Every industrial bank incorporated under the Provisions provisions of this act shall report to and be subject to the supervision of the Commissioner of the Banking Department in the same manner as is provided in the case of State banks so far as applicable and consistent with the provisions of this act, and each industrial bank shall pay for the services rendered by the banking department fees in the same amount as are provided for the like services in the case of state banks. When an industrial bank is organized under the provisions Power of of this act, by a voluntary association the Commissioner of the Banking Department shall have power for himself, his deputy, or any examiner he may designate for that purpose to examine into the financial condition and affairs of the voluntary association which organized the bank, whenever and at such times as he may deem necessary or advisable. And as on oath. part of such examination he may examine on oath any of the officers, or clerks, of the association relative to the business and affairs of the association. Any wilful false swearing in Perjury. any such examination shall be deemed perjury.

governing

State banks to apply.

examination.

Provisions applicable in

dation, etc.

SEC. 22. The provisions of sections forty-two, fifty-three, fifty-four, fifty-five, fifty-five-a, fifty-six and fifty-seven of act case of liquinumber two hundred five of the Public Acts of eighteen hundred eighty-seven, as amended, shall apply to corporations incorporated under the provisions of this act and shall be observed and followed by the Commissioner of the Banking

Exception, voluntary association.

Liquidation.

Consolidation.

Proceedings filed.

Individual liability defined.

Balance of proceeds.

Department in case of liquidation, consolidation, impairment of capital or insolvency of any industrial bank organized under the provisions of this act, except that in the case of an industrial bank organized by a voluntary association, if assessments are made under any of said sections, the amount required shall be assessed against the members of the association equally; if the bank goes into liquidation, such action shall be ordered by a vote of two-thirds of the members present and voting at a meeting of the association called for that purpose; if the bank winds up its affairs for the purpose of consolidating with some other bank such action shall be ordered by the directors and by a vote of two-thirds of the members of the association present and voting at a meeting of the association called for that purpose, and the proceedings of the directors and of the association shall be the proceedings which are filed with the Commissioner of the Banking Department; where individual liability of stockholders is mentioned, it shall be deemed to mean liability of members of the association; when a bank is wound up and all its obligations satisfied, and all costs and expenses paid, the balance of the proceeds, if any, shall be paid over to the association.

Approved May 12, 1919.

Sections amended.

Who preferred.

[No. 224.]

AN ACT to amend sections one and two of act number two hundred five of the Public Acts of eighteen hundred ninetyseven, entitled "An act to prefer ex-soldiers for public employments," as amended, being compilers' sections one thousand forty-one and one thousand forty-two of the Compiled Laws of the State of Michigan for nineteen hundred fifteen.

The People of the State of Michigan enact:

SECTION 1. Sections one and two of act number two hundred five of the Public Acts of eighteen hundred ninety-seven, entitled "An act to prefer ex-soldiers for public employments" as amended, being compilers' sections one thousand forty-one and one thousand and forty-two of the Compiled Laws of the State of Michigan for nineteen hundred fifteen, are hereby amended to read as follows:

SEC. 1. In every public department and upon the public works of the State and of every county and municipal corporation thereof honorably discharged Union soldiers, sailors and marines of the Civil War, and honorably discharged soldiers, sailors and marines of the Spanish-American War,

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