AN ACT

 

1Repealing the act of December 14, 1967 (P.L.746, No.345),
2entitled "An act relating to and regulating the business of
3savings associations heretofore designated under other acts
4and special charters variously as building and loan
5associations and savings and loan associations; defining the
6rights, powers, duties, liabilities, and immunities of such
7associations; affecting persons engaged in the business of
8savings associations; affecting the members, account holders
9and borrowers of such associations; affecting Federal savings
10and loan associations whose principal office is located in
11the Commonwealth; prohibiting the transaction of business in
12this Commonwealth by foreign savings associations; conferring
13powers and imposing duties on certain departments and
14officers of the Commonwealth and on the courts, recorders of
15deeds; creating a Savings Association Board and defining its
16powers and duties; prohibiting certain actions and imposing
17penalties, and repealing certain acts," eliminating
18provisions for incorporation and organization, for names, for
19offices, for directors, officers, employees and attorneys,
20for members, for corporate powers, for savings operations,
21earnings, account insurance and reserves, for investment
22operations, for amendment of articles, for mergers,
23consolidations, conversions and reorganizations, for
24voluntary and involuntary dissolution and distribution of
25assets upon insolvency, for foreign and Federal associations,
26for provisions applicable to Department of Banking <-and 
27Securities and for penalties and criminal provisions.

28The General Assembly of the Commonwealth of Pennsylvania
29hereby enacts as follows:

30Section 1. Article I heading of the act of December 14, 1967

1(P.L.746, No.345), known as the Savings Association Code of
21967, is repealed:

3[ARTICLE I

4GENERAL PROVISIONS]

5Section 2. Section 101 of the act is repealed:

6[Section 101. Short Title.--This act shall be known, and may
7be cited, as the "Savings Association Code of 1967."]

8Section 3. Section 102 of the act, amended, added or
9renumbered July 30, 1975 (P.L.105, No.55), July 11, 1980
10(P.L.638, No.132), June 5, 1981 (P.L.81, No.28), April 9, 1982
11(P.L.334, No.94), December 21, 1988 (P.L.1427, No.174) and
12December 21, 1998 (P.L.1002, No.132), is repealed:

13[Section 102. Definitions.--The following words and phrases
14when used in this act shall have, unless the context clearly
15indicates otherwise, the meanings given to them in this section:

16(1) "Articles," the original articles of incorporation, any
17or all amendments thereto, articles of merger, consolidation,
18conversion or dissolution.

19(2) "Assets," all the property and rights of every kind of
20the association.

21(3) "Association," any mutual or permanent reserve fund
22stock savings association organized under this act and includes
23also any building and loan association or savings and loan
24association heretofore organized under or by virtue of any other
25act or law of this Commonwealth.

26(4) "Attorney," an attorney at law who is, or is a member of
27the firm which is, regularly retained as counsel for an
28association.

29(4.1) "Authorized capital," the permanent reserve fund stock
30authorized in an association's articles.

1(5) "Branch," an office or place of business other than the
2principal place of business of a savings association for the
3transaction of any business of the association except an agency
4existing at the effective date of this act in which an
5association had authorized any corporation or person to collect
6dues, interest, premiums and fines in any city, borough or
7township in the Commonwealth other than a place of business of
8the association.

9(5.1) "Capital," the sum of the par value of the permanent
10reserve fund stock of a savings association issued and
11outstanding.

12(5.2) "Capital deposit," the contributions paid by a
13savings association to the Pennsylvania Savings Association
14Insurance Corporation's central insurance fund, consisting of
15capital contributions by each member savings association in an
16amount equal to not less than two percent of the total savings
17on deposit with each member.

18(5.3) "Capital surplus," the amount paid to an association
19for the purchase of permanent reserve fund stock in excess of
20its par value.

21(6) "Collateral," personal property pledged to secure
22payment of an obligation.

23(7) "Department," the Department of Banking of this
24Commonwealth.

25(8) "Evidence of indebtedness," a bond, note or similar
26instrument evidencing obligation of a borrower or debtor.

27(9) "Fair market value," the value determined by an
28appraisal made in accordance with regulations to be issued by
29the Department of Banking. In the event such regulations are not
30issued the appraisal may be by two or more members of the board

1of directors or officers of the association or by an independent
2appraiser, who is acceptable to the department. Said appraisal
3shall be retained in the files of the association.

4(9.1) "Federal savings and loan association," a savings and
5loan association or savings bank chartered by the Federal Home
6Loan Bank Board under section 5 of the Home Owners' Loan Act of
71933 (12 U.S.C. § 1461 et seq., 48 Stat. 128).

8(10) "Housing facilities for the aging," housing
9accommodations, individual or multiple, designed for the purpose
10of providing accommodations for occupancy by aging persons or
11providing rest homes or nursing homes existing, constructed or
12altered, so as to be suitable primarily for the occupancy of
13persons of fifty-five years of age and older and limited
14principally to the occupancy of such persons.

15(11) "Incorporator," a signer of the original articles of
16incorporation.

17(12) "Insured association," an association whose savings are
18insured as provided by the National Housing Act of 1934,
19approved the twenty-seventh day of June, 1934, its amendments
20and supplements or by the Pennsylvania Savings Association
21Insurance Corporation established by the act of April 6, 1979
22(P.L.17, No.5), entitled "An act establishing the Pennsylvania
23Savings Association Insurance Corporation and providing for its
24powers and duties."

25(13) "Leasehold interest," a lease upon real estate which is
26security for the payment of an obligation and which by its terms
27as a lease has a period of not less than five years to run after
28the date of the maturity of the obligation, or is renewable for
29a period terminating not less than five years after the date of
30the maturity of the obligation. It must also provide that the

1right of renewal of the lease may be exercised by the mortgagee
2until the obligation is discharged.

3(14) "Loans on the security of savings accounts," loans
4which are secured pursuant to the provisions of this act by a
5note of the borrower and the pledge of a savings account.

6(15) "Loss reserves," the aggregate amount of the reserves
7allocated by an association for the sole purpose of absorbing
8losses.

9(16) "Maturity date," the date on which the last payment
10required to be made to retire an indebtedness or obligation is
11due and payable.

12(17) "Member," a person holding a savings account of a
13mutual association, a person owning one or more shares of
14permanent reserve fund stock of a permanent reserve fund stock
15association and a person borrowing on the security of a mortgage
16or purchasing property upon which a mortgage lien is held by a
17mutual association. A joint and survivorship relationship
18whether savers or borrowers constitute a single membership.

19(17.1) "Mortgage backed bonds," any borrowing (except
20borrowings from Federal Home Loan Banks) secured in whole or in
21part by one or more real estate loans.

22(18) "Mortgage loans," loans which are secured pursuant to
23the provisions of this act with a bond or note or other evidence
24of indebtedness of the borrower, and by a mortgage on real
25estate in fee simple or leasehold.

26(19) "Net worth," in the case of a mutual association, the
27sum of the association's general reserves, surplus and, to the
28extent they would be includable as regulatory capital for an
29association insured by the Federal Savings and Loan Insurance
30Corporation, or as permitted by the department, mutual capital

1certificates and subordinated debt securities; or, in the case
2of a permanent reserve fund stock association, the sum of the
3association's general reserves, capital, capital surplus and, to
4the extent they would be includable as regulatory capital for an
5association insured by the Federal Savings and Loan Insurance
6Corporation, or as permitted by the department, subordinated
7debt securities.

8(19.1) "Permanent reserve fund stock," the shares of stock
9issued by an association whose articles permit the issuance of
10stock which will share in the earnings of the association and
11for which there is set up from the money paid to the association
12for such stock a capital surplus. The total amount paid to the
13association for such stock and all earnings credited to it shall
14be a secondary fund for securing the payment of the savings
15liability of the association.

16(19.2) "PSAIC," the Pennsylvania Savings Association
17Insurance Corporation established by the act of April 6, 1979
18(P.L.17, No.5), referred to as the Pennsylvania Savings
19Association Insurance Corporation Act.

20(20) "Regular lending area," this Commonwealth and within
21fifty miles of the boundary thereof or within one hundred miles
22of the main office of an association without regard to the
23Commonwealth boundary lines.

24(21) "Resulting association," the association which
25continues after a merger or after the conversion of a Federal
26savings and loan association or a savings bank to an
27association.

28(22) "Savings account," the amount paid in cash to an
29association for deposit plus all earnings or interest credited
30thereto, less all withdrawals, redemptions and charges.

1(23) "Savings bank," a corporation existing under the laws
2of this Commonwealth as a savings bank and authorized under the
3Banking Code of 1965 to receive savings deposits.

4(24) "Savings liability," the aggregate amount of savings
5accounts of members including earnings credited to such accounts
6less redemptions and withdrawals.

7(25) "Service corporation," a corporation organized under
8the laws of the Commonwealth of Pennsylvania the entire capital
9stock of which corporation is available for purchase only by
10savings associations organized and existing under the laws of
11the Commonwealth of Pennsylvania and by Federal savings and loan
12associations having their home office in the Commonwealth of
13Pennsylvania and by savings banks.

14(25.1) "Shares," the units into which the permanent reserve
15fund stock is divided.

16(25.2) "Subscriber," a person who subscribes to shares of
17the permanent reserve fund stock.

18(26) "Surplus," the earnings and profits of an association
19which have not been allocated to savings accounts or to a loss
20reserve.

21(27) "Withdrawal value of a savings account," the credit
22balance of a savings account at any particular time as shown by
23the books of an association.

24(28) "Travelers' convenience withdrawals," the right of an
25account holder of an association as a convenience when fifty
26miles or more from his or her principal residence to make a
27withdrawal from his or her regular savings account at the office
28of a financial institution, the accounts of which are insured by
29the Federal Savings and Loan Insurance Corporation or the
30Pennsylvania Savings Association Insurance Corporation.

1(29) "Corporate debt security," a marketable obligation
2evidencing the indebtedness of any corporation in the form of a
3bond, note and/or debenture which is commonly regarded as debt
4security and is not predominantly speculative in nature. A
5security is marketable if it may be sold with reasonable
6promptness at a price which corresponds reasonably to its fair
7value.]

8Section 4. Sections 103, 104, 105, 106, 107, 108, 109, 110,
9111, 112 and 113 of the act are repealed:

10[Section 103. Declaration of Purposes; Standard for Exercise
11of Power and Discretion by Department.--(a) The General
12Assembly declares as its purposes in adopting this act to
13provide for:

14(1) The safe and sound conduct of the business of
15associations subject to this act,

16(2) The conservation of their assets,

17(3) The maintenance of public confidence in them,

18(4) The protection of the interests of the owners of savings
19accounts, creditors and of the interest of the public in the
20soundness and preservation of the savings and loan system,

21(5) The opportunity for associations subject to this act to
22remain competitive with each other, with financial organizations
23existing under other laws of this Commonwealth, and with savings
24and financial organizations existing under the laws of other
25states, the United States and foreign countries,

26(6) The opportunity for associations subject to this act to
27serve effectively the convenience and needs of owners of savings
28accounts, borrowers and other customers, to participate in and
29promote the economic progress of Pennsylvania and the United
30States and to improve and expand their services and facilities

1for those purposes,

2(7) The opportunity for managements of associations to
3exercise business judgment, subject to the provisions of this
4act, in conducting the affairs of associations, to the extent
5compatible with, and subject to, the purposes recited in the
6preceding clauses of this subsection (a),

7(8) A delegation to the department of adequate rule-making
8power and administrative discretion, subject to the provisions
9of this act and to the purposes stated in this subsection (a),
10in order that the supervision and regulation of associations
11subject to this act may be flexible and readily responsive to
12changes in economic conditions and to changes in savings and
13loan practices, and

14(9) Simplification and modernization of the law governing
15savings associations.

16(b) The purposes of this act stated in subsection (a) of
17this section shall constitute standards to be observed by the
18department in the exercise of its discretionary powers under
19this act, in the promulgation of rules and regulations, in the
20examination and supervision of associations subject to this act
21and in all matters of construction and application of this act
22required for any determination or action of the department.

23Section 104. Rules of Construction.--In the interpretation
24and construction of this act:

25(a) The comments of the commission which drafted this act
26may be consulted in the construction and application of its
27original provisions but the text of the act will control in the
28event of a conflict between text and comments.

29(b) A reference in this act to a statute or to a regulation
30issued by a governmental agency includes the statute or

1regulation with all amendments and supplements thereto and any
2new statute or regulation substituted for such statute or
3regulation, as in force at the time of application of the
4provision of this act in which such reference is made, unless
5the specific language or the context of the reference in this
6act clearly includes only the statute or regulation as in force
7on the effective date of this act.

8(c) A reference in this act to a governmental agency,
9department, board, commission or other public body or to a
10public officer includes an entity or officer succeeding to
11substantially the same functions as those performed by such
12public body or officer on the effective date of this act, unless
13the specific language or the context of the reference in this
14act clearly includes only the public body or officer on the
15effective date of this act.

16(d) A power of an association stated in this act to be
17subject to regulation of the department may be exercised,
18subject to the provisions of this act, in the absence of such
19regulation but a power which is stated to be subject to approval
20or permission of the department may not be exercised in the
21absence of such written approval or permission.

22(e) The provisions of this act are severable so that if any
23provision or the application of this act in particular
24circumstances should be held to be invalid, such invalidity will
25not affect any other provision or application of this act which
26can be given effect without the invalid provision or
27application.

28(f) Provisions of this act for the violation of which
29specific penalties are imposed under Article XV of this act are
30indicated by inclusion in the provisions of the phrase "subject

1to the penalty provisions of this act" or its equivalent.

2Section 105. Emergency Powers.--In the event a nuclear
3attack or other disaster results in the declaration of an
4emergency an association may during the continuance of such
5emergency, without regard to any restriction or limitation of
6this act, take any action to preserve the assets of the
7association and to continue or resume its business, including
8any action to obtain the benefit of, or participate in,
9emergency action authorized by the Federal government.

10Section 106. Certificates and Certified Copies of Documents
11to be Received in Evidence.--All certificates issued by the
12Department of Banking and by the Department of State and all
13copies of articles, papers and other documents filed in either
14department and certified by the Secretary of the Department of
15Banking or by the Secretary of the Commonwealth shall be taken
16and received by all courts, public offices, and official bodies
17as prima facie evidence of the facts therein stated.

18Section 107. Advertisement.--(a) Every advertisement
19required by this act shall be published, except as otherwise
20provided in this act, once in a newspaper of general circulation
21and once in a legal newspaper.

22(b) The newspaper of general circulation for publication of
23advertisement shall be one published in the English language,
24shall satisfy the requirements of the Newspaper Advertising Act
25and shall be:

26(1) A newspaper which is one of general circulation in the
27county and is published in the city, borough or township in
28which the principal office of each association required to
29publish the advertisement is, or the principal office of such a
30proposed association will be, located, or if there is none,

1(2) A newspaper of general circulation in such county,
2published at the county seat, or if there is none,

3(3) The newspaper of general circulation published in the
4county at the place nearest such city, borough or township, or
5if there is none,

6(4) The newspaper of general circulation published at the
7place nearest such city, borough or township in an adjoining
8county.

9(c) The legal newspaper for publication of advertisements
10shall satisfy the requirements of the Newspaper Advertising Act
11and shall be one published in the county in which the principal
12office of each association required to publish the advertisement
13is, or the principal office of such a proposed association will
14be, located. If there is no legal newspaper published in such
15county, the advertisement shall be published in an additional
16newspaper of general circulation in the county but if there are
17not two such newspapers, then only the advertisement provided
18for under subsection (b) of this section shall be required.

19Section 108. Notices.--(a) Written notice required to be
20given to any person under the provisions of this act or under
21the articles or bylaws of an association may be given to such
22person, either personally or by sending a copy thereof through
23the mail, or by telegram, charges prepaid, to his address
24appearing on the books of the association, or supplied by him to
25the association for the purpose of notice. If the notice is sent
26by mail or by telegraph, it shall be deemed to have been given
27to the person entitled thereto when deposited in the United
28States mail or with a telegraph office for transmission to such
29person. If such notice is of a meeting, it shall specify the
30place, date and hour of the meeting, and, in the case of a

1special meeting of members, the general nature of the business
2to be transacted.

3(b) Any written notice required to be given under the
4provisions of this act or the articles or bylaws of an
5association need not be given if there is a waiver thereof in
6writing, signed by the person entitled to such notice, whether
7before or after the time when the notice would otherwise be
8required to be given. If the notice is of a meeting other than a
9special meeting of members, neither the business to be
10transacted at, nor the purpose of, the meeting need be specified
11in the waiver of notice.

12(c) Attendance of a person, either in person or by proxy, at
13any meeting shall constitute a waiver of notice of such meeting,
14except where a person attends a meeting for the express purpose
15of objecting to the transaction of any business because the
16meeting was not lawfully called or convened.

17(d) If the language of a proposed resolution or a proposed
18plan requiring approval by members is included in a written
19notice of a meeting of members, the members' meeting considering
20the resolution or plan may adopt it with such clarifying or
21other amendments as do not enlarge its original purpose without
22further notice to members not present in person or by proxy.

23Section 109. Execution of Instruments.--Without regard to
24any other form of execution provided in the bylaws, an
25instrument in writing, or any assignment or endorsement thereof,
26executed or entered into between an association and any person
27and signed by the president or vice-president and by the
28secretary or treasurer of the association, shall be held to have
29been properly executed by and in behalf of the association.
30Except as otherwise required by statute, the affixation of the

1corporate seal shall not be necessary to the valid execution,
2assignment or endorsement by an association of any instrument in
3writing.

4Section 110. Books, Records and Accounts of Associations.--
5(a) An association may maintain its books of account on a cash,
6accrual, or modified accrual basis, as determined by the board
7of directors.

8(b) An association shall enter on its books a complete and
9accurate account of all its assets, whether the assets are in
10its name or the names of others, at values which shall not
11exceed the actual cost of the assets to the association unless
12prior approval so to do is received from the department.

13(c) An association shall enter on its books a complete and
14accurate account of its liabilities and of its savings accounts
15and of its members.

16(d) An association shall set out in full on its records any
17pledge or assignments of assets.

18(e) An association may not cause to be performed by contract
19or otherwise, accounting or bookkeeping services for itself,
20whether on or off its premises, unless assurances satisfactory
21to the department are furnished to the department by both the
22association and the person performing such service that the
23performance thereof will be subject to regulation and
24examination by the department to the same extent as if such
25service were being performed by the association itself on its
26own premises. For the purpose of this subsection (e) "services"
27shall mean clerical, bookkeeping, accounting and statistical.

28(f) Any officer, director or employe of an association who
29knowingly violates any of the provisions of this section shall
30be subject to the penalty provisions of this act.

1Section 111. Retention of Records and Admissibility of
2Copies in Evidence.--(a) Every association shall preserve in
3such form and manner that they may be readily produced upon
4proper demand, all of its records of original or final entries
5for a period of seven years from the date of making the last
6entry thereon, except that coupons accompanying deposits in a
7club account, such as a Christmas club or a vacation club, need
8not be so retained for more than two years from the date of
9closing of such account.

10(b) All records required to be retained under subsection (a)
11of this section shall be retained in their original form except
12that, in lieu of the originals, film, photographic, photostatic
13or other copies which accurately reproduce all lines and
14markings on the originals may be retained.

15(c) Any copy of a record permitted to be kept in lieu of the
16original under subsection (b) of this section shall be
17admissible in evidence in any proceeding with the same effect as
18though it were the original.

19Section 112. Repledging of Collateral.--(a) An association
20shall not repledge any property held by it in pledge or as
21collateral.

22(b) Any officer, director or employe of an association who
23knowingly repledges any such property shall be subject to the
24penalty provisions of this act.

25Section 113. Statutory Amendment of Existing Charters.--The
26charters of all existing building and loan associations and
27savings and loan associations heretofore granted shall be deemed
28to be amended to the extent necessary to give effect to the
29provisions of this act and to conform thereto.]

30Section 5. Section 115 of the act, added December 21, 1988

1(P.L.1427, No.174), is repealed:

2[Section 115. Savings Association Holding Companies.--(a)
3The following words and phrases when used in this section shall
4have, unless the context clearly indicates otherwise, the
5following meanings:

6(1) "Savings association holding company," any entity:

7(i) which directly or indirectly owns, controls or holds
8with power to vote twenty-five percent or more of the voting
9shares of one or more savings association or of a company which
10is or becomes a savings association holding company; or

11(ii) which controls in any manner the selection of a
12majority of the directors of one or more savings associations or
13of a majority of the directors of a savings association holding
14company.

15(2) "Entity," any corporation, partnership, association or
16similar organization, including banks and thrift institutions.

17(3) "Savings association," an association as defined in
18section 102(3) of this act.

19(4) "Subsidiary," with respect to a specified holding
20company, means any company twenty-five percent or more of whose
21voting shares are directly or indirectly owned, controlled or
22held by the holding company with the power to vote such shares,
23or in which the selection of a majority of the directors of the
24company is controlled by the holding company.

25(b) The Secretary of Banking may require any savings
26association holding company to furnish such reports as the
27secretary deems appropriate to the proper supervision of such
28companies. Unless the secretary determines otherwise, reports
29prepared for Federal authorities may be submitted by the savings
30association holding company in satisfaction of the requirements

1of this section. The secretary may make examinations of each
2savings association holding company and each subsidiary thereof,
3the cost of which shall be assessed against and paid by such
4savings association holding company.

5(c) The secretary shall have the authority to issue rules,
6regulations and orders as may be necessary to properly
7administer this section, including the authority to order a
8savings association holding company to cease and desist from
9engaging in any activity which constitutes a serious risk to the
10financial safety, soundness or stability of the savings
11association.]

12Section 6. Section 116 of the act, added July 9, 1992
13(P.L.414, No.89), is repealed:

14[Section 116. Federal Agency References.--(a) Any reference
15in this act to the Federal Home Loan Bank Board shall mean the
16Office of Thrift Supervision under section 3 of the Home Owners'
17Loan Act (48 Stat. 128, 12 U.S.C. § 1462a).

18(b) Any reference in this act to the Federal Savings and
19Loan Insurance Corporation shall mean the Savings Association
20Insurance Fund of the Federal Deposit Insurance Corporation.]

21Section 7. Article II heading of the act is repealed:

22[ARTICLE II

23INCORPORATION AND ORGANIZATION]

24Section 8. Section 201 of the act, amended December 21, 1988
25(P.L.1427, No.174), is repealed:

26[Section 201. Incorporators.--(a) A savings association may
27be incorporated by three or more adults.

28(b) At least two-thirds of the incorporators shall be
29citizens of the United States or of its territories or
30possessions and residents of Pennsylvania.]

1Section 9. Section 202 of the act, amended April 9, 1982
2(P.L.334, No.94), is repealed:

3[Section 202. Prohibition of Promoters' Fees.--(a) A
4savings association shall not pay any fee, compensation or
5commission for the promotion or organization of an association
6or for any part of the money collected from members, except
7legal fees and other usual and ordinary expenses necessary for
8its organization. Any incorporator, officer, director or employe
9paying or receiving any such fee, compensation or commission
10shall be subject to the penalty provisions of this act.

11(b) A majority of the incorporators shall file with the
12department at the time of the filing of the articles an
13affidavit:

14(1) Setting forth all expenses incurred or to be incurred in
15connection with the organization of the association. If the
16association is a permanent reserve fund stock association there
17shall also be stated any expense in connection with the
18subscription for its shares and sale of its shares, if any, and

19(2) Stating that no fee, compensation or commission
20prohibited by subsection (a) of this section has been paid or
21incurred.

22(c) In the event of a violation of this section, the
23department may disapprove the articles on account of such
24violation.]

25Section 10. Section 203 of the act, amended April 9, 1982
26(P.L.334, No.94) and December 21, 1988 (P.L.1427, No.174), is
27repealed:

28[Section 203. Articles of Incorporation.--(a) Articles of
29incorporation shall be signed and acknowledged by each of the
30incorporators.

1(b) The articles shall set forth, in the English language:

2(1) The name of the association,

3(2) The county in which its first principal place of
4business is to be located,

5(3) A precise and accurate statement of the purpose or
6purposes for which it is organized, as well as a statement that
7it is organized under the provisions of this act,

8(4) The term for which it is to exist, which may be
9perpetual,

10(5) The name, occupation, citizenship, place of residence,
11and post office address of each incorporator,

12(6) The name, occupation, citizenship, place of residence,
13post office address, and term of office of each of the first
14directors,

15(7) The aggregate number of permanent reserve fund shares
16which the association shall have authority to issue. If the
17articles provide for the issuance of permanent reserve fund
18stock it shall specify the par value of each share, the number
19of shares and the kinds or classes which the association is
20authorized to issue. There shall also be specified the capital
21surplus to be contributed by each subscriber to permanent
22reserve fund stock. All shares shall contribute a pro rata
23proportion of the capital surplus. The authorized capital may be
24in any amount but may not be less than is required by the
25department.]

26Section 11. Sections 204 and 205 of the act are repealed:

27[Section 204. Application for Approval by Department.--The
28incorporators shall make an application to the department for
29approval of the proposed association in a manner prescribed by
30the department and shall deliver to the department when

1available:

2(1) The articles of incorporation,

3(2) The affidavit required by section 202,

4(3) Evidence of reservation in the Department of State of
5the name of the proposed association,

6(4) Applicable fees payable to the department in connection
7with the articles and with the conduct of the investigation
8required by section 206,

9(5) As soon as available proof of publication of the
10advertisement required by section 205.

11Section 205. Advertisement.--(a) The incorporators shall
12advertise their intention to deliver, or the delivery of,
13articles of incorporation with the department once in each
14newspaper in which such advertisement is required to be made and
15published in accordance with section 107.

16(b) The advertisement shall appear prior to, or within seven
17days after the date of delivery of the articles to the
18department and shall set forth briefly:

19(1) The name of the proposed association,

20(2) A statement that it is to be incorporated under the
21provisions of this act,

22(3) The purpose or purposes of the association,

23(4) The names and addresses of the first directors as they
24appear or will appear in the articles,

25(5) The date of delivery of the articles to the department.]

26Section 12. Section 206 of the act, amended April 9, 1982
27(P.L.334, No.94) and repealed in part June 3, 1971 (P.L.118,
28No.6), is repealed:

29[Section 206. Approval of Proposed Association by
30Department.--(a) Upon receipt of an application for approval of

1a proposed association the department shall conduct such
2investigation as it may deem necessary to ascertain whether:

3(1) The articles and supporting items satisfy the
4requirements of this act,

5(2) The convenience and needs of the public will be served
6by the proposed association,

7(3) The population density or other economic characteristics
8of the area primarily to be served by the association afford
9reasonable promise of adequate support for the association,

10(4) The character and fitness of the incorporators, of the
11directors and of the proposed officers are such as to command
12confidence of the community and to warrant the belief that the
13business of the association will be honestly and efficiently
14conducted,

15(5) There has not been nor will there be any violation of
16section 202,

17(6) The amount of savings, which will be attracted to the
18association, shall be adequate properly to operate the
19association with safety to prospective members, and such savings
20will be insured by the Federal Savings and Loan Insurance
21Corporation or by any other public or private corporation
22authorized by law to insure accounts of savings associations and
23approved by the Department of Banking,

24(7) The proposed association will have sufficient personnel
25with adequate knowledge and experience to administer the
26business of the association, and

27(8) In the case of a permanent reserve fund stock
28association, the capital and capital surplus thereof are
29adequate in relation to the amount and character of the
30anticipated business of the association.

1(b) Within sixty days after receipt of the articles, the
2department shall make a determination whether to approve or
3disapprove the proposed association on the basis of its
4investigation. In giving approval, the department may impose
5conditions to be satisfied prior to the issuance of a
6certificate of authorization under section 209. If the
7department shall approve the proposed association with or
8without conditions, it shall deliver the articles with its
9written approval to the Department of State and notify the
10incorporators of its action. If the department shall disapprove
11the association it shall give written notice to the
12incorporators of its disapproval and a statement in detail of
13the reasons for its decision.]

14Section 13. Sections 207, 208, 209, 210 and 211 of the act
15are repealed:

16[Section 207. Issuance of Certificate of Incorporation.--If
17all the taxes, fees and charges required by law shall have been
18paid and if the name of the proposed association continues to be
19reserved or is available on the records of the Department of
20State the receipt of the articles by the Department of State
21with the written approval of the department shall constitute
22filing of the articles with the Department of State as of the
23date and time of receipt or as of any later date and time
24specified by the department and the Department of State shall
25immediately issue to the incorporators a certificate of
26incorporation as of the date and time of filing with the
27approved articles attached thereto and shall make and retain a
28copy of such certificate and articles.

29Section 208. Effect of Filing of Articles in Department of
30State and of Certificate of Incorporation.--(a) As of the

1filing of the articles in the Department of State the corporate
2existence of the association shall begin.

3(b) The certificate of incorporation shall be conclusive
4evidence of the fact that the association has been incorporated
5but proceedings may be instituted by the Commonwealth to
6dissolve, wind up and terminate an association which should not
7have been incorporated under this act or which was incorporated
8without a substantial compliance with the conditions prescribed
9by this act as precedent to incorporation.

10Section 209. Certificate of Authorization to do Business.--
11(a) Until receipt of a certificate of authorization issued by
12the department an association shall not open savings accounts
13for its members, incur indebtedness or transact any business
14except such business as is incident to its organization or to
15the obtaining of subscriptions. Any officer or director
16violating this prohibition shall be subject to the penalty
17provisions of this act.

18(b) The department shall issue to the association a
19certificate of authorization to do business when:

20(1) Bona fide applications or promises to open accounts in
21writing, signed by the prospective account holder, have been
22received in an amount satisfactory to the department.

23(2) There shall have been paid in an expense fund in an
24amount fixed by the department and subject to such conditions as
25the department may impose,

26(3) The bylaws of the association have been filed with the
27department,

28(4) The association has been organized and is ready to begin
29the business for which it was incorporated,

30(5) All conditions imposed by the department in giving its

1approval of the proposed association under section 206 have been
2satisfied or provision satisfactory to the department made for
3meeting them,

4(6) The department has received an affidavit signed by at
5least a majority of the directors of the association to the
6effect that all the foregoing requirements of this subsection
7have been satisfied.

8Section 210. Organization Meetings.--(a) After the filing
9of the articles in the Department of State the first meeting of
10the members shall be held within this Commonwealth at the call
11of the incorporators, or the majority of them, for the purpose
12of adopting such bylaws as this act and the articles require to
13be adopted by the members, and for such other purposes as shall
14be stated in the notice of the meeting. The incorporators, at
15the call of the meeting, shall give to each member at least five
16days' written notice of the time and place of the meeting.

17(b) After the filing of the articles in the Department of
18State, an organization meeting of the board of directors named
19in the articles shall be held within this Commonwealth at the
20call of a majority of the directors, for the purpose of adopting
21such bylaws as the articles authorize the directors to adopt, of
22electing officers and of transaction of such other business as
23may come before the meeting. The directors who call the meeting
24shall give to each director named in the articles at least five
25days' written notice of the time and place of the meeting.

26Section 211. Adoption and Contents of Bylaws.--(a) The
27members shall have the power to make, alter, amend and repeal
28the bylaws of an association, but such authority may be
29expressly vested by the articles or by the bylaws in the board
30of directors (except as to bylaws fixing the qualification,

1classification, or terms of office of directors), subject to the
2power of the members to change such action. Unless the articles
3or bylaws otherwise provide, the powers hereby conferred shall
4be exercised by a majority vote of the directors or by the
5majority vote of members of the association present in person or
6by proxy at any regular or special meeting. No notice shall be
7required to members for any regular meeting where such bylaw
8changes are to be considered.

9(b) The bylaws of an association may contain provisions for
10the regulation and management of the affairs of the association
11not inconsistent with law or its articles.

12(c) An association shall send to the department a copy of
13its bylaws and of all changes therein immediately after every
14adoption and change of its bylaws.]

15Section 14. Section 212 of the act, amended July 9, 1992
16(P.L.414, No.89), is repealed:

17[Section 212. Acquisitions and Offers to Acquire Shares of
18Permanent Reserve Fund Stock of Association.--(a) The following
19words and phrases when used in this section shall have, unless
20the context clearly indicates otherwise, the following meanings:

21(1) "Acquire," obtaining legal or beneficial ownership of
22shares, or voting rights of shares, whether obtained directly or
23indirectly, through an intermediary or otherwise; beneficial
24ownership by a person shall be deemed to include ownership by
25another person which controls, is controlled by or is under
26common control with such person and to include ownership by a
27spouse or member of the family of such person; the acquisition
28of options, warrants and rights to subscribe for, or to
29purchase, shares and the acquisition of rights to obtain shares
30through conversion or exchange shall be deemed an acquisition of

1such shares.

2(2) "Control," the power to elect a majority of the board of
3directors of an institution or corporation.

4(3) "Institution," a permanent reserve fund stock
5association.

6(4) "Ownership change," the same meaning as in section 382
7of the Internal Revenue Code of 1986 (Public Law 99-514, 26
8U.S.C. § 1 et seq.), as amended.

9(5) "Proposal to acquire," any offer or attempt to buy or
10solicitation of an offer to sell or other attempt or offer to
11acquire by any means, directly or indirectly, through an
12intermediary or otherwise.

13(b) Except as provided in subsection (i), it shall be
14unlawful, without the prior written approval of the department
15pursuant to this section, for any person to acquire, or to make
16a proposal to acquire, shares of an institution or shares of a
17corporation which controls an institution if the aggregate
18number of shares held after such acquisition, whether or not any
19prior acquisition had been approved by the department pursuant
20to this section, would total more than:

21(1) ten percent of any class of the outstanding shares of
22such institution; or

23(2) five percent of any such class, if such institution or
24corporation had net operating loss carryforwards (as defined in
25the Internal Revenue Code of 1986) in excess of twenty percent
26of its total stockholders' equity, as reported in its most
27recent publicly available annual financial statements.

28(c) If the approval of the department is required under
29subsection (b), a person who intends to acquire, or to make a
30proposal to acquire, shares of an institution or of a

1corporation which controls an institution shall:

2(1) File an application for approval in such form as the
3department may prescribe,

4(2) Deliver to the department from time to time such other
5information as the department may require with such
6certification of financial information and such verification by
7oath or affirmation of other data as the department may specify,

8(3) Pay such investigation fee as the department may
9specify, and

10(4) Except in the case of an applicant which is a domestic
11corporation or a foreign corporation qualified to do business in
12Pennsylvania, deliver to the department a written consent to
13service of process in any action or suit arising out of or in
14connection with the proposed acquisition through service of
15process on the Secretary of Banking.

16(d) Upon receipt of an application for approval and other
17items required under subsection (c) the department shall conduct
18an investigation to determine whether the acquisition, its
19purposes and probable effects would be consistent with the
20purposes of this act set forth in section 103(a), whether the
21applicant, or its directors and officers in the case of a
22corporation, and any proposed new officers or directors of the
23institution involved would satisfy the test for incorporators,
24directors and officers of a new institution under section
25206(a), and whether the proposed acquisition would be
26prejudicial to the interests of the depositors, creditors,
27beneficiaries of fiduciary accounts or shareholders of the
28institution or corporation involved. As part of its
29investigation, the department shall transmit to the institution
30or the corporation whose shares are proposed to be acquired a

1copy of the application and all other information received from
2the applicant, except such information which the department
3determines should be kept confidential, for the purpose of
4receiving such comments thereon as such institution or
5corporation shall transmit to the department upon its request.

6(e) Within sixty days after receipt of an application under
7subsection (c) or within a longer period not in excess of thirty
8days after receipt from the applicant of additional information
9required by the department, the department shall approve or
10disapprove the proposed acquisition and give written notice of
11its decision to the applicant and the institution or corporation
12whose shares are proposed to be acquired. If the department
13approves a proposed acquisition which may result in a change of
14control or ownership change of such institution or corporation
15it may impose conditions to be observed after such acquisition
16with respect to transactions between the institution involved
17and the applicant or affiliate of the applicant, with respect to
18dividends or distributions by such institutions, with respect to
19employe relations, with respect to reimbursement for any loss
20occasioned by such ownership change or with respect to such
21other matters as the department may deem advisable on the basis
22of the purposes of this act set forth in section 103(a). The
23decision of the department shall be subject to review by the
24Commonwealth Court in the manner provided by law.

25(f) A proposal to acquire shares which is made to all or
26substantially all of the shareholders of an institution or a
27corporation which controls an institution shall, to the extent
28required by the department in approving the proposal, provide
29that the proposal will remain open for a specified minimum
30period of time, that shares may be withdrawn from deposit prior

1to the time the person making the proposal becomes bound to
2acquire them and that there will be pro rata acceptance of
3shares offered or deposited if they exceed the number proposed
4to be acquired.

5(g) It shall be unlawful for any person directly or
6indirectly to make any untrue statement of a material fact or to
7omit to state a material fact necessary in order to make the
8statements made, in the light of the circumstances in which they
9were made, not misleading in connection with any acquisition of,
10or proposal to acquire, shares within the scope of this section
11or in any application or submission of information to the
12department under subsection (c).

13(h) The enforcement and implementation of this section shall
14be subject to regulation by the department.

15(i) No approval under this section shall be required for an
16acquisition or proposal to acquire shares in the case of either:

17(1) An acquisition or proposal to acquire shares by the
18issuer thereof or by a person who at the time controls the
19institution or corporation whose shares are proposed to be
20acquired,

21(2) A merger or consolidation which requires the approval of
22the department or the Office of Thrift Supervision,

23(3) A transaction by a broker-dealer who does no more than
24perform the customary broker's function in transactions on a
25stock exchange or in the over-the-counter market, who receives
26no more than the customary broker's commission and who does not
27solicit, or arrange for the solicitation of orders, or

28(4) A transaction of a type exempted by regulation of the
29department in the light of the purposes of this act set forth in
30section 103(a).

1(5) An acquisition or proposal to acquire shares by the
2issuer's tax-qualified employe benefit program.

3(j) (1) Any person who acquires or proposes to acquire
4shares of an institution or of a corporation which controls an
5institution in violation of this section or who violates
6subsection (g) shall be guilty of a misdemeanor and shall upon
7conviction be subject, in the case of an individual, to
8imprisonment for a period not exceeding five years or a fine not
9exceeding five thousand dollars ($5,000), or both, and, in the
10case of any other person, to a fine not exceeding fifty thousand
11dollars ($50,000).

12(2) Any person who violates any provision of this section
13shall be liable to any institution or corporation or shareholder
14thereof damaged thereby and, in the discretion of the court, for
15punitive damages. The provisions of this section shall be
16enforceable in any administrative action, action or suit
17instituted by the department or by any such institution,
18corporation or shareholder to enjoin or restrain any violation
19or threatened violation of that section.]

20Section 15. Article III heading of the act is repealed:

21[ARTICLE III

22NAMES]

23Section 16. Sections 301, 302 and 303 of the act are
24repealed:

25[Section 301. Names permitted to be Used.--(a) The name of
26an association:

27(1) May be in any language but shall be expressed in English
28letters or characters,

29(2) It shall contain the words "savings association,"
30"savings and loan association" or "building and loan

1association."

2(3) The name of the association shall not contain the words
3"trust," "bank," "deposit," "discount" or any other words which
4may deceptively lead to the conclusion that it is authorized to
5perform any act or conduct any business which is forbidden to it
6by law, its articles or otherwise. The name of the association
7shall not contain the words "Government," "Official," "Federal,"
8"National," "United States," or "insured."

9(4) The name of an association shall not be the same as, or
10deceptively similar to, that of any other corporation authorized
11to transact business in this Commonwealth.

12(b) An association may without regard to the provisions of
13subsection (a) of this section use:

14(1) Its name legally in use on the effective date of this
15act, or

16(2) A name legally in use on the effective date of this act
17by another association which is adopted by the resulting
18association in a plan of merger or consolidation to which the
19association using the name is a party.

20(c) The Department of State shall not approve as a corporate
21name or register as a fictitious name, any name which would
22violate the provisions of this section.

23Section 302. Change of Name of an Association.--(a) If an
24association makes any change in its name the new name shall
25comply with the provisions of section 301.

26(b) An association may change its name by an amendment of
27its articles.

28Section 303. Reservation of Name.--(a) The exclusive right
29to use a name permitted to be used by an association under this
30act may be reserved by an individual intending to incorporate an

1association, by an association intending to change its name, or
2by a Federal savings and loan association intending to convert
3into a State association.

4(b) Such reservation may be made by filing with the
5Department of State an application executed by the applicant. If
6the Department of State finds that the name applied for is
7available it shall send a copy of the application to the
8department. If the department determines that the use of the
9name complies with the requirements of this article and is
10otherwise consistent with the purposes and provisions of this
11act it shall give its written consent to the Department of State
12which shall then reserve the name for the exclusive use of the
13applicant for a period of six months.

14(c) A name which has been reserved for a period of six
15months pursuant to this section may be reserved for additional
16successive periods of six months each, if prior to the
17expiration of each such period of six months the applicant files
18with the Department of State a statement executed by the
19applicant to the effect that the proposed association for which
20the name is intended has taken appropriate action to obtain, but
21has not received, all approvals of regulatory authorities
22required for the business in which the name would be used.

23(d) The right to the exclusive use of a name reserved
24pursuant to this section may be transferred to anyone who would
25be entitled to reserve such name under this section except for
26such prior reservation, by filing with the Department of State a
27notice of the transfer which shall be executed by the transferor
28who reserved the name and which shall set forth the name of the
29transferee. The Department of State shall send a copy of such
30notice to the department.]

1Section 17. Article IV heading of the act is repealed:

2[ARTICLE IV

3OFFICES]

4Section 18. Section 401 of the act is repealed:

5[Section 401. Authorized Offices.--(a) An association may
6not maintain any office for the conduct of its business other
7than:

8(1) Its principal place of business,

9(2) Branches authorized prior to the effective date of this
10act or authorized pursuant to this act.

11(b) Any association which prior to January 1, 1954 had
12authorized any corporation or person to collect money on
13savings, mortgages, and other loans, in any city, borough or
14township in the Commonwealth other than a place of business of
15the association permitted by prior acts and, in the case of
16merger or consolidation, a resulting association, may continue
17to collect money on savings, mortgages and other loans in any
18such communities through any such corporations or persons and
19may appoint successors in their stead in any city, borough or
20township in the Commonwealth.]

21Section 19. Section 402 of the act, amended April 9, 1982
22(P.L.334, No.94), is repealed:

23[Section 402. Change of Location of Office.--

24(b) An association with the prior written approval of the
25department and any necessary amendment to its articles may
26change its principal place of business to a location anywhere in
27Pennsylvania.

28(c) An association may with the prior written approval of
29the department change the place of business of a branch to a new
30location in the same manner and subject to the same requirements

1and limitations as are prescribed by this act for the
2establishment of branches.

3(d) An association may with the prior written approval of
4the department designate a branch office as its main office and
5the original main office may thereafter be conducted as a branch
6office.

7(e) An association which has changed the place of business
8of a branch shall discontinue operation of the branch at the
9previous location immediately upon commencing operation of the
10branch at the new location.

11(f) In the event a place of business becomes unavailable an
12association with the prior written approval of the department
13may temporarily or permanently change its place of business to
14another place in close proximity thereto.]

15Section 20. Section 403 of the act, amended April 9, 1982
16(P.L.334, No.94) and December 18, 1986 (P.L.1723, No.206), is
17repealed:

18[Section 403. Authorization of New Branches.--(a) Upon a
19merger, consolidation or conversion of a Federal savings and
20loan association into a State association the resulting
21association may with the prior written approval of the
22department maintain as branches, in addition to its principal
23place of business, every office which was maintained prior to
24the merger or consolidation by the parties thereto or prior to
25the conversion by the Federal savings and loan association and
26which is located within Pennsylvania.

27(b) Except as provided in subsection (a) of this section, an
28association may establish a branch after the effective date of
29this act anywhere in Pennsylvania and anywhere in the United
30States upon compliance with the following requirements:

1(1) The proposed branch shall be authorized by resolution by
2its board of directors.

3(2) If the location of the proposed branch is outside of the
4city, incorporated town, borough or township in which the
5principal place of business of the association is located, the
6association shall give notice of the filing of the application
7by advertisement in the county in which the proposed branch is
8to be located.

9(3) The branch shall be approved by the department.]

10Section 21. Section 404 of the act, amended April 9, 1982
11(P.L.334, No.94) and July 9, 1992 (P.L.414, No.89), is repealed:

12[Section 404. Approval of Branch by Department.--(a) Upon
13receipt of an application for approval of a branch which
14satisfies the requirements of this act and the payment of all
15fees, and after such further notice as the department may
16require, the department shall conduct such investigation as it
17may deem necessary and in its discretion may hold hearings.

18(c) Within sixty days after receipt of the application or
19such longer periods as may be required by any hearing which the
20department may hold, the department shall, approve the
21application if it finds that the establishment of the proposed
22branch would be consistent with the purposes of this act set
23forth in subsection (a) of section 103 and that the requirements
24of this act have been complied with, but shall otherwise
25disapprove the application. If the department approves the
26application it shall issue to the association a letter of
27authority to establish a branch. If the department disapproves
28the application it shall give the association written notice of
29its disapproval and a statement in detail of the reasons for its
30decision.

1(d) An association may establish a branch pursuant to
2approval of the department under this section not later than
3twelve months after the date of the letter of authority or
4within such longer period as the department shall allow for good
5cause. Each such period of extension by the department shall not
6exceed six months. The association shall deliver to the
7department a certificate of the establishment of the branch in a
8form prescribed by the department.

9(e) An association may, pursuant to a resolution of its
10board of directors and with prior written approval of the
11department, discontinue the operation of a branch upon such
12prior public notice of at least thirty days as the department
13shall prescribe. The association shall deliver to the department
14a certificate of the discontinuance of the branch in a form
15prescribed by the department.

16(f) The department shall maintain a record of the number and
17location of all branches of associations.

18(g) An association may establish and operate as a branch any
19principal place of business or branch of an affiliated State or
20Federal savings and loan association or State or National bank
21or State or Federal savings bank upon written approval by the
22department of an application for approval in a form prescribed
23by the department accompanied by any applicable fee. The
24department may issue regulations under this subsection. However,
25the absence of regulations shall not be a bar to consideration
26of an application filed under this subsection nor a basis for
27denial of such application.]

28Section 22. Section 405 of the act, amended April 9, 1982
29(P.L.334, No.94), is repealed:

30[Section 405. Branches Acquired from the Receiver of a

1Closed Association.--Any association whose principal place of
2business is located in Pennsylvania may maintain as a branch any
3office which it acquires from the secretary, or public body of
4the United States, as receiver, in conjunction with an
5assumption of deposit liabilities of a closed association
6whether in connection with a purchase of assets, through a
7merger or consolidation or otherwise, without regard to the
8location of the principal place of business of the acquiring
9association.]

10Section 23. Article V heading of the act is repealed:

11[ARTICLE V

12DIRECTORS, OFFICERS, EMPLOYES AND ATTORNEYS]

13Section 24. Section 501 of the act is repealed:

14[Section 501. Board of Directors.--(a) The business and
15affairs of an association shall be managed by a board of
16directors.

17(b) Subject to the provisions of this act and provisions of
18the articles, the number, qualifications, terms of office,
19manner of election, time and place of meetings, powers and
20duties of the directors may be prescribed by the bylaws.

21(c) The board of directors of an association may appoint an
22individual as director emeritus or member emeritus of an
23advisory board. An individual so appointed may be compensated
24but may not vote at any meeting of the board of directors or
25advisory committee or be counted in determining a quorum. He
26shall not have any responsibility or be subject to any
27liability.]

28Section 25. Section 502 of the act, amended July 9, 1992
29(P.L.414, No.89), is repealed:

30[Section 502. Number and Qualifications of Directors.--(a)

1The bylaws shall fix the number of directors at not less than
2five.

3(b) Each director shall be a citizen of the United States.]

4Section 26. Section 503 of the act is repealed:

5[Section 503. Term of Office of Directors; Vacancies;
6Classification of Directors.--(a) Each director shall hold
7office for the term for which he is elected and until his
8successor shall have been duly elected and qualified. Directors
9shall be elected by the members for a term of one year except as
10otherwise provided in this article or in the articles or the
11bylaws.

12(b) Except as otherwise provided in the articles or bylaws,
13vacancies in the board of directors may be filled by the
14remaining members of the board even though less than a quorum.
15Each person so designated as a director shall serve as such
16director for the unexpired term to which he is appointed.

17(c) Directors may be classified, pursuant to the provisions
18of the articles or bylaws, according to the time for which they
19shall severally hold office, except that the directors named in
20the articles shall serve only until the first annual meeting of
21members. Each class shall be as nearly equal in number as
22possible, the term of office of at least one class shall expire
23in each year and the members of a class shall not be elected for
24a shorter period than one year or a longer period than four
25years. If directors of more than one class are to be elected at
26a meeting of members there shall be a separate election for each
27class of directors to be elected at the meeting.]

28Section 27. Section 504 of the act, amended December 21,
291988 (P.L.1427, No.174), is repealed:

30[Section 504. Method of Action by Board of Directors,

1Executive or Other Committee.--Except as otherwise provided in
2this act or in the articles or bylaws:

3(a) The board of directors shall hold a regular meeting at
4least once in each month. Meetings of the board of directors
5shall be held upon such notice as the bylaws may prescribe.
6Unless the bylaws provide otherwise, written notice of any
7special meeting of the board of directors shall be given to each
8director. Notice of an adjourned meeting may be given by
9announcement at the meeting at which the adjournment is taken.
10Minutes shall be kept of all meetings.

11(b) A majority of all the directors in office shall
12constitute a quorum for the transaction of business and actions
13of a majority of those present at a meeting at which a quorum is
14present shall be actions of the board.

15(c) The board of directors may by resolution adopted by a
16majority of the whole board delegate three or more of its number
17to constitute an executive committee or other committee which to
18the extent provided in such resolution, shall have and exercise
19the authority of the board of directors in the management of the
20business of the association. Minutes shall be kept of all
21meetings.

22(d) Any action which may be taken at a meeting of the
23directors or at an executive or other committee meeting may be
24taken without a meeting if a consent or consents in writing
25setting forth the action shall be signed by all the directors or
26all of the members of the executive or other committee and filed
27with the secretary of the association.

28(e) The board of directors may by resolution adopted by a
29majority of the whole board designate one or more officers or
30personnel of the association to approve loans as to amount, type

1of collateral, and other requirements, as shall be established
2in the resolution authorizing the approval of said loans.]

3Section 28. Section 505 of the act is repealed:

4[Section 505. Communications from Department of Banking.--
5Every official communication directed by the department to an
6association, or to any officer thereof, shall be transmitted by
7the officer receiving it to the board of directors at the next
8meeting of such board, and shall be duly noted in the minutes of
9such meeting.]

10Section 29. Section 506 of the act, amended July 9, 1992
11(P.L.414, No.89), is repealed:

12[Section 506. Removal of Directors.--(a) The board may
13remove a director from office if:

14(1) He is adjudicated an incompetent by a court or is
15convicted of a felony,

16(2) He does not within sixty days of his election, or such
17other time as the bylaws may specify, accept the office in
18writing or by attendance at a meeting and fulfill other
19requirements for holding the office,

20(3) He fails to attend regular meetings of the board for six
21successive months or such shorter period as is established by
22the bylaws without having been excused by the board.

23(b) The court of common pleas of the county where the
24principal place of business of the association is located may in
25a suit in which the association is a party filed by a majority
26of the board of directors or by the members holding at least ten
27percent of the voting rights of the association remove from
28office a director for fraudulent or dishonest acts or gross
29abuse of authority or discretion in the affairs of the
30association and may bar any director so removed from re-election

1for a period prescribed by the court.

2(c) The shareholders may remove a director from office
3subject to the provisions of the association's bylaws or
4articles of incorporation.]

5Section 30. Sections 507, 508, 510 and 511 of the act are
6repealed:

7[Section 507. Officers.--(a) An association shall have a
8president, a secretary and a treasurer and such other officers,
9including a conveyancer, as it may authorize. The bylaws may
10provide that the same individual may hold two offices except
11that the president shall not hold any other office. The
12president shall be a member of the board of directors.

13(b) Except as otherwise provided in the bylaws, the board of
14directors shall elect the officers, fix their compensation and
15fill vacancies however occurring. An officer elected or
16appointed by the board may be removed by the vote of the
17majority of the board at any time.

18(c) The officers shall, as between themselves and the
19association, have such authority and perform such duties as may
20be provided in the bylaws or in the absence of a provision in
21the bylaws as may be provided by the board.

22Section 508. Bonds.--Each officer and employe and any
23director who is authorized to handle money or negotiable assets
24on behalf of the association shall be bonded and the association
25may pay the cost of such bond. The form, amount and surety of
26such bonds shall be such as is approved by the board of
27directors, but the department may require an additional amount
28or new or additional surety.

29Section 510. Prohibitions Applicable to Directors, Officers,
30Employes and Attorneys.--(a) No director, officer, employe or

1attorney of an association shall:

2(1) Receive anything of value for procuring or attempting to
3procure any loan from or investment by an association,

4(2) Purchase, lease, or directly or indirectly be interested
5in purchasing or leasing from the association for less than its
6fair market value any security or other property,

7(3) Contract with an association upon terms less favorable
8to the association than those offered by any other corporation
9or person,

10(4) Engage in any transaction under subsections (2) and (3)
11hereof unless the transaction is authorized by the vote of at
12least two-thirds of all the members of the board of directors
13who are not interested in such transaction except in their
14capacity as directors,

15(5) Receive a mortgage loan from the association unless the
16real property securing the loan shall be occupied by such
17director, officer, attorney or employe at his home.

18(b) A violation of any of the subsections (a) (1), (a) (2)
19or (a) (3), of this section shall be subject to the penalty
20provisions of this act.

21Section 511. Audits and Reports.--(a) Except as provided in
22subsection (c) of this section the board of directors of an
23association shall cause an annual audit to be made of the books,
24papers, securities and affairs of an association and the loans
25thereof and such other matters as the department may require and
26such audit shall be made by an independent public accountant
27satisfactory to the department. The department may by regulation
28establish minimum standards for audits and reports under this
29subsection (a).

30(b) A detailed written report of such audit certified to by

1the accountant making such audit shall be promptly sent to the
2department. A signed copy thereof shall be placed on file with
3the association and noted in its minutes.

4(c) In the case of an association which has a system of
5internal audit control approved by the department no audit under
6subsection (a) of this section shall be required and in lieu of
7a report required by subsection (b) the internal auditor of the
8association shall submit to the board an annual summary of the
9same matters as those required under subsection (a) of this
10section. Such report shall set forth the degree of compliance
11with the approved audit system and shall express the opinion of
12the internal auditor as to the adequacy of the internal
13controls. The report shall be kept in the files of the
14association and a copy shall be filed with the department.]

15Section 31. Section 514 of the act, added July 9, 1992
16(P.L.414, No.89), is repealed:

17[Section 514. Department Review of Additions of any Director
18or Senior Executive Officer.--(a) An insured association or a
19Pennsylvania thrift institution holding company shall notify the
20department of the proposed addition of any individual as a
21senior executive officer of such institution or holding company
22at least thirty days before such addition or employment becomes
23effective, if the insured association or the Pennsylvania thrift
24institution holding company:

25(1) has been chartered less than two years in the case of an
26insured association;

27(2) has undergone a change in control or a charter
28conversion within the preceding two years; or

29(3) is not in compliance with the minimum capital
30requirement applicable to such insured association or is

1otherwise in a troubled condition, as determined by the
2department on the basis of such insured association's or holding
3company's most recent report of condition or report of
4examination.

5(b) An insured association or Pennsylvania thrift
6institution holding company may not add any individual to the
7board of directors or employ any individual as a senior
8executive officer if the department issues a notice of
9disapproval within thirty days following the receipt of the
10notice of proposed action pursuant to subsection (a).

11(c) The department shall issue a notice of disapproval with
12respect to a notice submitted pursuant to subsection (a) if the
13competence, experience, character or integrity of the individual
14who is the subject of such notice indicates that it would not be
15in the best interests of the depositors of the insured
16association or in the best interest of the public to permit the
17individuals to be employed by or associated with the insured
18association or a Pennsylvania thrift institution holding
19company. The notice shall set forth the reason for such
20disapproval.

21(d) The department may issue regulations regarding
22exceptions to prior notice required in subsection (a). The
23department shall publish a notice outlining the information
24required to be included in such notice as required in subsection
25(a).]

26Section 32. Article VI heading of the act is repealed:

27[ARTICLE VI

28MEMBERS]

29Section 33. Sections 601, 602 and 603 of the act are
30repealed:

1[Section 601. Meetings of Members.--(a) Meetings of the
2members of an association shall be held at such place within the
3Commonwealth as shall be fixed by the bylaws or by the board of
4directors pursuant to the bylaws, or if none is so fixed, at the
5principal place of business of the association.

6(b) There shall be at least one annual meeting of members in
7each calendar year for the election of directors and any other
8business which members may present to that meeting. The time of
9such annual meeting shall be fixed by the bylaws or by the board
10of directors pursuant to the bylaws. If the annual meeting shall
11not be called and held within one month after the time
12designated in the bylaws or if the board of directors pursuant
13to the bylaws fails for a period of one month after the date
14they are required to fix the meeting, to so designate a time any
15member shall have the power to call upon the department to issue
16an order in the manner provided by law to compel the calling and
17holding of such meeting.

18(c) Special meetings of the members may be called at any
19time by the president, by the board of directors, by the members
20entitled to cast at least one-fifth of the votes which all
21members are entitled to cast at the particular meeting or by
22such other officers or persons as the bylaws may provide. Upon
23the written request of a person or persons who are entitled to
24call a special meeting, the secretary shall fix a date of such
25meeting to be held not more than sixty days after receipt of the
26request and shall give due notice thereof. In the event of the
27secretary's failure within thirty days after the receipt of the
28request to fix the date or give the notice, the person or
29persons making the request shall have the power to call upon the
30department to issue an order to compel the calling and holding

1of such meeting.

2(d) Any meeting may be adjourned for any period except that
3a meeting at which directors are to be elected may be adjourned
4only from day to day until such directors have been elected.

5Section 602. Notice of Meetings of Members.--(a) If the
6time and place of a regular meeting of the members are stated in
7the bylaws, it shall be sufficient, in addition to any other
8notice, if any, required by the bylaws, to post a notice at the
9place of business of the association during the month
10immediately preceding the date of such meeting. Written notice
11of each special meeting of members and of each regular meeting,
12the time and place of which are not stated in the bylaws, shall
13be given to each member of record entitled to vote at the
14meeting at least five days prior to the date thereof, unless a
15longer period of notice is required by the articles, bylaws, or
16other provisions of this act. The notice required by this
17section shall specify the place, day and hour of the meeting,
18and, in the case of a special meeting, the general nature of the
19business to be transacted. Notice of an adjourned meeting and of
20the business to be transacted at such meeting may be given by
21announcement at the meeting at which the adjournment is taken
22unless otherwise provided in the articles or bylaws.

23(b) The time and place of the annual meeting of members
24shall be stated in a prominent place on the cover or inside
25cover of each passbook or other evidence of membership.

26Section 603. Quorum and Action by Members.--(a) A meeting
27of the members duly called shall not be organized for the
28transaction of business unless a quorum is present.

29(b) Unless otherwise provided in the articles or in a bylaw:

30(1) The presence, in person or by proxy, of the members

1entitled to cast a least a majority of the votes which all
2members are entitled to cast on a particular matter shall
3constitute a quorum for the purpose of considering such matter,
4except as provided in subsection (c) of this section,

5(2) At a duly organized meeting, the acts of the members
6present who are entitled to cast at least a majority of the
7votes which all members present and entitled to cast shall be
8the acts of the members, except as otherwise provided in this
9act,

10(3) The members present at a duly organized meeting may
11continue to do business until adjournment, notwithstanding the
12withdrawal of enough members to leave less than a quorum,

13(4) If a meeting cannot be organized for lack of a quorum,
14those present may, except as otherwise provided in this act,
15adjourn the meeting to such time and place as they may
16determine.

17(c) In the case of a meeting for the election of directors
18which is twice adjourned for lack of a quorum, those present at
19the second of such adjourned meetings shall constitute a quorum
20for the election of directors without regard to the other quorum
21requirements of this section, the articles or the bylaws.]

22Section 34. Section 604 of the act, amended April 9, 1982
23(P.L.334, No.94) and July 9, 1992 (P.L.414, No.89), is repealed:

24[Section 604. Voting Rights of Members.--(a) Except as
25otherwise provided in this act at every meeting of the members
26of an association the members shall have the right to vote as
27follows:

28(1) In the case of a mutual association:

29(i) Each borrowing member shall have one vote,

30(ii) Each savings member shall have one vote. For each one

1hundred dollars ($100) in excess of the first one hundred
2dollars ($100) in a savings account such saver shall be entitled
3to one additional vote,

4(iii) A member who qualifies in more than one of the above
5classes shall be entitled to cast the total number of votes for
6which he qualifies. A member may vote in person or by proxy and
7shall not sell his vote nor execute a proxy for any sum of money
8or anything of value.

9(2) In the case of a permanent reserve fund stock
10association each member shall have one vote for each share of
11permanent reserve fund stock, or as defined in association
12bylaws.

13(3) If the bylaws of an association so provide, in each
14election of directors of an association each member entitled to
15vote shall have the right to multiply the number of votes to
16which he may be entitled by the total number of directors to be
17elected, and he may cast the whole number of such votes for one
18candidate or he may distribute them among any two or more
19candidates.

20(b) A proxy:

21(1) Shall be in writing and filed with the secretary of the
22association. Except as otherwise provided in the association's
23bylaws, a proxy shall be filed with the secretary not less than
24five days prior to the meeting at which the proxy is to be
25exercised.

26(2) Shall, unless coupled with an interest, be revocable at
27will notwithstanding any agreement to the contrary, but the
28revocation of a proxy shall not be effective until written
29notice thereof has been given to the association,

30(3) Shall not be revoked by the death or incompetency of the

1maker unless, before the vote is counted or the authority
2exercised written notice of such death or of an adjudication of
3such incompetence is received by the secretary.]

4Section 35. Sections 605, 606, 607, 608, 609, 610 and 611 of
5the act are repealed:

6[Section 605. Voting by Fiduciaries and Pledgors.--(a)
7Savings accounts standing in the name of a fiduciary may be
8voted either in person or by proxy of the fiduciary.

9(b) A member whose savings account is pledged shall be
10entitled to vote, in person or by proxy, until it has been
11transferred on the books of the association and thereafter the
12transferee shall be entitled to vote in person or by proxy.

13Section 606. Voting by Joint Holders of Savings Accounts and
14by Joint Mortgagors.--(a) Voting rights which are held jointly
15or as tenants in common by two or more persons, as fiduciaries
16or otherwise, shall be deemed to be represented for the purpose
17of determining a quorum if one or more such persons are present
18in person or by proxy. Except as provided in subsection (b) of
19this section, the vote shall be the vote cast by such persons or
20a majority of such persons but if such persons are equally
21divided upon the manner of voting, the voting rights held by
22them shall be divided equally among such persons, without
23prejudice to the rights of such joint owners or the beneficial
24owners thereof among themselves.

25(b) Upon the filing with the secretary of the association of
26a copy, certified by an attorney at law to be correct, of the
27relevant portions of the agreement under which such savings
28accounts are held or of the instrument or decree of court by
29which the fiduciaries were appointed, or by decree of court
30directing the voting of such savings accounts, the persons

1specified as having such voting power in the latest such
2document shall be entitled to vote such savings accounts in
3accordance therewith.

4Section 607. Voting Rights Held by Corporations.--An
5association or other corporation which holds voting rights of an
6association may vote the same by:

7(1) Its president or a vice-president,

8(2) A proxy appointed by its president or vice-president, or

9(3) A person appointed its general or special proxy by
10resolution of its board of directors or under a provision of its
11articles or bylaws a copy of which, certified to be correct by
12one of its officers, shall have been filed before the vote is
13taken with the secretary of the association in which the voting
14rights are held.

15Section 608. Determination of Members of Record.--(a) The
16board of directors of an association may, except as otherwise
17provided in its bylaws, fix a date for the determination of the
18members entitled to receive notice of and to vote at any meeting
19or to receive any distribution or allotment of rights or a date
20for any change, conversion or exchange of savings accounts by:

21(1) Fixing a record date not more than forty days prior
22thereto, or

23(2) Closing the books of the association against transfers
24for all or part of such period by giving notice to each member
25of record at least ten days before the closing of the books.

26(b) If no date for determination of members of record is
27fixed by the bylaws or pursuant to subsection (a) of this
28section, transferees of voting rights which are transferred on
29the books of the association within ten days of the date of a
30meeting of members shall not be entitled to receive notice of,

1or to vote at, the meeting.

2(c) Holders of savings accounts which have been voluntarily
3or involuntarily withdrawn, or holders of savings accounts who
4have not assented to or have dissented from a merger or a
5consolidation, shall be entitled to notice of, and to vote at,
6any meeting of members, until they shall have been paid in full
7the amount lawfully due them on account of their savings
8accounts. The exercise of such right to vote at such a meeting
9shall not constitute waiver of, nor in any way affect, any
10rights granted by law to such members by virtue of their savings
11accounts having become fully paid, or of their withdrawal from
12the association, either voluntarily or involuntarily, or of
13their failure to assent to, or their dissent from, a plan of
14merger or consolidation.

15Section 609. Judges of Election.--(a) One judge or three
16judges of election may be appointed:

17(1) In advance of each meeting of members by the board of
18directors, or

19(2) If the board of directors has not done so, at the
20meeting by the chairman of the meeting except that in such case,
21the holders of a majority of the voting rights present shall
22determine whether one or three judges are to be appointed. A
23judge of election need not be a member and a candidate for
24office shall not act as a judge.

25(b) The judge or judges of election shall perform his or
26their duties impartially, expeditiously and in good faith and
27shall:

28(1) Determine the number of voting rights entitled to be
29voted, the number represented at the meeting, the voting power
30of each and the existence of a quorum,

1(2) Determine the authenticity, validity and effect of
2proxies,

3(3) Receive votes or ballots, hear and determine all
4challenges and questions in any way arising in connection with
5the right to vote, count and tabulate the votes, and determine
6the result,

7(4) Do whatever is appropriate to conduct the election or
8vote with fairness to all members,

9(5) Act by majority vote, if there are three, and

10(6) Upon request of the chairman or any person at the
11meeting, make a written report of any matter determined by him
12or them and execute a certificate of any fact found by him or
13them.

14Section 610. Informal Action by Members.--Any action which
15may be taken at a meeting of members may, unless otherwise
16provided in the articles or bylaws, be taken without a meeting,
17if a consent or consents in writing, setting forth the action so
18taken, shall be signed by all the members who would be entitled
19to vote on such action at a meeting and shall be filed with the
20secretary of the association.

21Section 611. Immunity of Savings Account Members.--A savings
22account member of an association shall not, merely by reason of
23his ownership of savings or voting rights, be personally liable
24for any debt or liability of the association.]

25Section 36. Section 612 of the act, amended July 11, 1980
26(P.L.638, No.132), is repealed:

27[Section 612. Disclosure of Information Concerning
28Accounts.--(a) Record books and accounts of associations are
29private and confidential and the contents thereof may not be
30divulged by any officer, director or employe of the association

1except to:

2(1) Authorized employes of the Department of Banking,

3(2) Authorized employes of the Department of Revenue of the
4Commonwealth of Pennsylvania,

5(3) Authorized representatives of the Federal Home Loan Bank
6Board,

7(4) Members of the Savings Association Board during hearing
8before the board who shall have the right to inspect the records
9of the association.

10(5) Authorized representatives of the Pennsylvania Savings
11Association Insurance Corporation.

12(b) An association shall upon request furnish to any member
13information regarding his own account. The department shall by a
14regulation or ruling in any specific case, establish procedures
15for communication by one member of an association with other
16members of the same association, provided, that it determines
17that the request is made for legitimate purposes and can be
18complied with in such manner as not to disclose the investments
19of any members in the association. Any such communications shall
20be subject to the terms and conditions including payment of
21costs prescribed by the department.]

22Section 37. Article VII heading of the act is repealed:

23[ARTICLE VII

24CORPORATE POWERS]

25Section 38. Section 701 of the act, amended August 1, 1969
26(P.L.208, No.84), July 11, 1980 (P.L.638, No.132), June 5, 1981
27(P.L.81, No.28), April 9, 1982 (P.L.334, No.94), December 21,
281988 (P.L.1427, No.174) and July 9, 1992 (P.L.414, No.89) and
29repealed in part July 30, 1975 (P.L.105, No.55), is repealed:

30[Section 701. Powers of Associations.--(a) Every

1association incorporated pursuant to or operating under the
2provisions of this code shall have all of the powers enumerated,
3authorized, and permitted by this code and such other rights,
4privileges and powers as may be incidental to or reasonably
5necessary or appropriate for the accomplishment of the objects
6and purposes of the association. Among others, and except as
7otherwise limited by the provisions of this code, every
8association shall have the following powers:

9(1) To have perpetual existence: to adopt and use a
10corporate seal, which may be affixed by imprint, facsimile, or
11otherwise; and to adopt and amend bylaws.

12(2) To sue and be sued, complain and defend in courts of law
13or equity in its corporate name.

14(3) To acquire, hold, sell, dispose of and convey real and
15personal property consistent with its objects and powers on such
16terms as to the association seem most advantageous; to mortgage,
17pledge, or lease any real or personal property; and to take
18property by gifts, devise, or bequest.

19(4) To elect or appoint and remove officers, agents and
20employes of the association and define their duties and fix
21their compensation, and enter into employment contracts with
22them for such period or periods, not exceeding five years, as
23the board of directors shall determine.

24(5) An association may borrow from the Federal Home Loan
25Bank such sums as are permitted by the rules and regulations of
26the Federal Home Loan Bank and such borrowings shall be in
27accordance with such rules and regulations as may be prescribed
28by the Federal Home Loan Bank. An association may borrow from
29the Pennsylvania Savings Association Insurance Corporation such
30sums as are permitted by the rules and regulations of the

1Pennsylvania Savings Association Insurance Corporation and such
2borrowings shall be in accordance with such rules and
3regulations as may be prescribed by the Pennsylvania Savings
4Association Insurance Corporation. An association may borrow
5from sources individual or corporate, an aggregate amount not in
6excess of fifty percent of its savings liability. An insured
7association shall also have the right to issue notes, bonds,
8debentures and other securities in accordance with such rules
9and regulations as are prescribed by the Office of Thrift
10Supervision, the Federal Deposit Insurance Corporation and the
11Department of Banking. Loans and other evidences of indebtedness
12may be secured by assets of the association. The pledge of
13assets may be with recourse. When authorized by statute, an
14association may also pledge its assets for public fund deposits
15to the extent the same are not insured.

16(6) To qualify as and become a member of a Federal Home Loan
17Bank.

18(7) To become a member of, deal with, or make reasonable
19payments or contribution to any organization to the extent that
20such organization assists in furthering or facilitating the
21association's purposes, powers or community responsibilities,
22and to comply with any reasonable conditions of eligibility.

23(8) To maintain and let safes, boxes or other receptacles
24for the safekeeping of personal property upon such terms and
25conditions as may be agreed upon.

26(9) To sell money orders, travelers checks and similar
27instruments as agent for any organization empowered to sell such
28instruments through agents within this Commonwealth and to
29receive money for transmission through a Federal Home Loan Bank,
30to issue credit cards, extend credit in connection therewith,

1and otherwise engage in or participate in credit card operation
2and to honor withdrawals by travelers' convenience withdrawals,
3subject to regulations issued by the department after giving due
4consideration to the laws and regulations applicable to Federal
5savings and loan associations.

6(10) To act as fiscal agent of the United States, and, when
7so designated by the Secretary of the Treasury, to perform,
8under such regulations as he may prescribe, all such reasonable
9duties as fiscal agent of the United States as he may require;
10and to act as agent for any instrumentality of the United States
11and as agent of this Commonwealth or any instrumentality
12thereof.

13(11) To service loans and investments for others, provided
14that the loans or investments were sold by the association.

15(12) To act as trustee of funds or contributions received
16under a trust plan or instrument prepared in accordance with the
17requirements of the Self Employed Individuals Tax Retirement Act
18of 1962, its amendments and supplements, and the regulations
19promulgated thereunder, and the Employee Retirement System
20Income Security Act of 1974, its amendments and supplements, and
21the regulations promulgated thereunder, and as such trustee to
22invest such funds or contributions only in savings accounts,
23deposits, obligations and securities of the association which is
24insured by the Federal Savings and Loan Insurance Corporation
25pursuant to the provisions of the National Housing Act, its
26amendments and supplements or by the Pennsylvania Savings
27Association Insurance Corporation established by the act of
28April 6, 1979 (P.L.17, No.5), entitled "An act establishing the
29Pennsylvania Savings Association Insurance Corporation and
30providing for its powers and duties."

1(13) To act as agent for others in any transaction
2incidental to the operation of its business.

3(14) To sell with or without recourse and to purchase
4mortgages or other loans authorized by this act, including
5participating interests therein.

6(17) To make application for and to obtain insurance of
7loans pursuant to national housing legislation.

8(18) To make contributions and donations for the public
9welfare or religious, scientific or educational purposes.

10(19) To use abbreviations, words or symbols in connection
11with any document of any nature and on checks, proxies, notices
12and other instruments which abbreviations, words, or symbols
13shall have the same force and legal effect as though the
14respective words and phrases for which they stand were set forth
15in full for the purposes of all statutes of the Commonwealth and
16all other purposes.

17(20) To enter into a contract with any corporation
18authorized to transact the business of insurance in this
19Commonwealth, or to participate in, or become a member of a
20trust, fund, plan or agreement to provide retirement benefits,
21death benefits, or disability benefits, and to make such
22contributions out of the earnings of the association, as may be
23required to provide these benefits; provided that an association
24shall send the department a copy of any such contract, trust,
25fund, plan or agreement and of all changes therein immediately
26after every adoption and change.

27(21) To acquire savings and pay earnings or interest
28thereon, and to lend and invest its funds as provided in this
29code.

30(22) Notwithstanding any other provision of this act,

1associations shall have all powers granted to Federal savings
2and loan associations. Associations may invest in such bonds,
3capital stock obligations, and other securities that qualify for
4investment for any purposes by Federal savings and loan
5associations. The department may by regulation supervise the
6exercise of any additional powers which associations may acquire
7by virtue of this subsection.

8(23) An insured association issuing mortgage backed bonds
9may reinvest the accumulated principal payments on the mortgage
10collateral under regulations prescribed by the Federal Savings
11and Loan Insurance Corporation, or the Pennsylvania Savings
12Association Insurance Corporation, or may establish a sinking
13fund with the accumulated principal payments on the mortgage
14collateral. Such sinking fund investments shall be in bonds or
15other interest bearing obligations of the United States, or
16those for the payment of the principal and interest on which the
17faith and credit of the United States is pledged.

18(24) Upon receiving written approval of the department an
19association may act as trustee, executor, administrator,
20guardian, or in any other fiduciary capacity in which banks,
21trust companies or other corporations are permitted to act. Such
22approval and the exercise of such powers shall be subject to
23regulations issued by the department after giving due
24consideration to the laws and regulations applicable to Federal
25savings and loan associations. The department shall also
26promulgate regulations governing the surrender or revocation of
27such powers. Upon receiving written approval of the department,
28service corporations may invest in State or Federally chartered
29corporations which are located in Pennsylvania and which are
30engaged in trust activities.

1(25) (i) In accordance with regulations issued by the
2department, mutual capital certificates may be issued and sold
3directly to subscribers or through underwriters. Such
4certificates shall constitute a part of the general reserve and
5net worth of the issuing association; and

6(A) shall be subordinate to all savings accounts, savings
7certificates and debt obligations;

8(B) shall constitute a claim in liquidation on the general
9reserves, surplus and undivided profits of the association
10remaining after the payment in full of all savings accounts,
11savings certificates and debt obligation;

12(C) shall be entitled to the payment of dividends; and

13(D) may have a fixed or variable dividend rate.

14(ii) The department shall provide in its regulations for
15charging losses to the mutual capital certificate, reserves and
16other net worth accounts.

17(26) Except as provided in clause (27) any loans authorized
18by this code may be made at such interest, finance charge, rate,
19and/or terms herein authorized or at any interest, finance
20charge, rate, and/or terms permitted any other lender regulated
21by the Commonwealth of Pennsylvania or Federally chartered
22institutions operating in Pennsylvania and regulated by the
23Federal Home Loan Bank Board. The department shall have power to
24issue regulations with respect to amounts, terms and conditions
25including prepayment penalties and late charges.

26(27) The extension of credit through the issuance and use of
27credit cards may be made at such interest, finance charge, rate
28and/or terms as may lawfully be permitted State chartered
29institutions as defined by the act of November 30, 1965
30(P.L.847, No.356), known as the "Banking Code of 1965" or in

1accordance with the following:

2(i) For cash advances such interest, finance charge, rate
3and/or terms shall be as provided in the "Banking Code of 1965."

4(ii) For purchases of goods and services such interest,
5finance charge, rate and/or terms shall be as provided in the
6act of October 28, 1966 (1st Sp.Sess., P.L.55, No.7), known as
7the "Goods and Services Installment Sales Act."

8(b) The powers granted in this section shall not be
9construed as limiting or enlarging any grant of authority made
10elsewhere by this act, or as a limitation on the purposes for
11which an association may be incorporated. It shall not be
12permissible or necessary to set forth any of such powers in the
13articles of the association. Except as otherwise provided in
14this act, or in the articles, or in the bylaws, such powers
15shall be exercised by the board of directors of the
16association.]

17Section 39. Article VIII heading of the act, amended
18November 26, 1978 (P.L.1397, No.329), is repealed:

19[ARTICLE VIII

20SAVINGS OPERATIONS, EARNINGS, ACCOUNT

21INSURANCE AND RESERVES]

22Section 40. Sections 801, 802 and 803 of the act are
23repealed:

24[Section 801. No Limitation on Savings Accounts.--An
25association may receive money for savings accounts without
26limitation as to number and amount of such accounts unless the
27board of directors shall fix limits therefor.

28Section 802. Ownership.--Investments in savings accounts may
29be made only with cash and may be made by any person or persons
30in his or their own right or in a trust or other fiduciary

1capacity and by any partnership, association, corporation,
2political subdivision, public or governmental unit or entity.

3Section 803. Savings Contracts.--Each holder of a savings
4account opened or created after the effective date of this act
5shall execute a savings contract setting forth any special terms
6and provisions applicable to such account and the conditions
7upon which withdrawals may be made not inconsistent with the
8provisions of this act. Such savings contract shall be held by
9the association as part of its records pertaining to such
10account.]

11Section 41. Section 804 of the act, amended December 21,
121988 (P.L.1427, No.174), is repealed:

13[Section 804. Types of Savings Contracts.--(a) An
14association may make any type of savings account contract
15including a savings deposit account, a savings account subject
16to withdrawal on demand, and an optional type savings account
17subject to withdrawal by a Negotiable Order of Withdrawal.
18Savings accounts shall be issued in accordance with such
19regulations as the department shall prescribe. No type of
20account may be created by any association which imposes fines as
21penalties for late payment or nonpayment for a period of longer
22than six months. The resolution of the board creating the
23account may provide for transfer of the account at the
24termination of this period to another type of account.

25(b) Any share certificates which may be outstanding upon the
26effective date of this act which were valid under prior law
27shall continue to be valid, with the same rights and privileges
28and subject to the same duties and liabilities as though such
29certificates were savings accounts opened in accordance with the
30terms of this act in the amount of the withdrawal value of such

1certificates.]

2Section 42. Sections 805, 806, 807, 808, 809, 810, 811 and
3812 of the act are repealed:

4[Section 805. Evidence of Ownership of an Account.--The
5association shall issue to the holder of a savings account
6either an account book, a certificate or other evidence of
7ownership.

8Section 806. Transfer of Savings Accounts.--Savings accounts
9shall be transferable only on the books of the association upon
10presentation of evidence of transfer satisfactory to the
11association accompanied by proper application for transfer by
12the transferee who shall accept such account subject to the
13terms and conditions of the savings contract, the bylaws of the
14association and the provisions of its articles of incorporation.
15The association may treat the holder of record of a savings
16account as the owner thereof for all purposes without being
17affected by any notice to the contrary unless the association
18has acknowledged in writing the interest of persons other than
19the holder of record.

20Section 807. Savings Accounts of Minors.--An association may
21open savings accounts in the name of a minor as the sole and
22absolute owner of such savings account and receive payments
23thereon by or for such owner and pay withdrawals, accept pledges
24to the association and act in any other manner with respect to
25such accounts on the order of the minor. Any payment to a minor
26or a receipt or acquittance signed by the minor or any other
27action required by the association to be taken by the minor
28shall be binding upon such minor with like effect as if such
29minor were of full age and legal capacity and shall be a valid
30release to the association. The parent or guardian of such minor

1shall not, in his capacity as parent or guardian, have the power
2to attach, or in any manner transfer, any savings account owned
3and standing in the name of such minor.

4Section 808. Savings Accounts in Two or More Names.--(a)
5When a savings account is opened in any association in the names
6of two or more persons whether minor or adult and the savings
7contract provides that the moneys in such account may be paid to
8or on the order of any one of such persons, then the association
9may pay the moneys in such account to or on the order of any one
10of such persons either before or after the death of the other
11person or persons named on such account and such association
12shall have no further liability for the amount so paid.

13(b) If the savings contract provides that the signatures of
14more than one of such persons during their lifetimes or of more
15than one of the survivors after the death of any one of them are
16required on any receipt or withdrawal order then the association
17shall pay the moneys in the account only in accordance with such
18instructions; provided

19(c) Any one of the parties to a joint account may give
20written notice to the association not to permit withdrawals in
21accordance with the terms of the savings contract, in which
22event the association may refuse, without liability, to honor
23any receipt or withdrawal request on the account pending
24determination of the rights of the parties thereto.

25Section 809. Pledge to Association of Joint Savings
26Accounts.--The pledge or hypothecation to any association of all
27or part of a savings account issued in the names of two or more
28persons signed by any person or persons upon whose signature or
29signatures withdrawal may be made from the account shall, unless
30the terms of the savings account provide specifically to the

1contrary, be a valid pledge and transfer to the association of
2that part of the account pledged or hypothecated and shall not
3operate to sever or terminate the joint and survivorship
4ownership of all or any part of the account.

5Section 810. Savings Accounts of Fiduciaries.--If the
6fiduciary is permitted by law to make such investments an
7association may accept savings accounts in the name of any
8administrator, executor, custodian, guardian, trustee or other
9fiduciary for a named beneficiary or beneficiaries and any such
10fiduciary shall have the power to vote as a member as if the
11membership were held absolutely, to open and make additions to,
12and to withdraw from any such account in whole or in part.
13Except when otherwise provided by law, the payment to any such
14fiduciary or a receipt or acquittance signed by such fiduciary
15to whom any payment is made shall be a valid and sufficient
16release and discharge of an association for the payment so made.

17Section 811. Trust Accounts Where Trust Instrument is Not
18Disclosed.--Whenever an account shall be opened by any person,
19describing himself in opening such account as a trustee for
20another person or persons and no other or further notice of the
21existence and terms of a legal and valid trust than such
22description shall have been given in writing to such
23association, withdrawals from such account may be made on the
24signature of the person so described as trustee, and in the
25event of the death of such person, the withdrawal value of such
26account, or any part thereof, together with earnings thereon,
27may be paid to the person or persons for whom the account was
28thus stated to be opened. The receipt or acquittance of any such
29beneficiary or beneficiaries for the payments made in accordance
30with this section shall be a full, complete and valid release of

1the association from any further liability for the amounts so
2paid.

3Section 812. Powers of Attorney on Savings Accounts.--Any
4association may continue to recognize the authority of an
5attorney-in-fact authorized in writing to manage or to make
6withdrawals either in whole or in part from the savings account
7of a member until it receives written notice or is on actual
8notice of revocation of his authority. For the purposes of this
9section, written notice of the death or adjudication of
10incompetency of such member shall constitute written notice of
11revocation of the authority of his attorney-in-fact.]

12Section 43. Section 813 of the act, amended December 21,
131988 (P.L.1427, No.174), is repealed:

14[Section 813. Withdrawals from Savings Accounts.--Any
15savings account member may at any time withdraw all or any part
16of his savings account, including the right to effect such
17withdrawals by travelers' convenience withdrawals. If the
18savings account contract provides for withdrawal on demand, a
19savings account may be subject to withdrawal by check. An
20optional type savings account may be subject to withdrawal by a
21Negotiable Order of Withdrawal.]

22Section 44. Sections 814 and 815 of the act are repealed:

23[Section 814. Redemption of Savings Accounts.--At any time
24funds are on hand for the purpose, an association shall have the
25right to redeem by lot or otherwise, as the board of directors
26may determine, all or any part of any of its savings accounts on
27an earnings date by giving thirty days' notice by registered or
28certified mail, addressed to each affected account holder at his
29last address as recorded on the books of the association. No
30association shall redeem any of its savings accounts when the

1association is subject to receivership action under the
2provisions of this act or when it has applications for
3withdrawal which have been on file more than thirty days and
4have not been reached for payment. The redemption price of
5savings accounts redeemed shall be the withdrawal value thereof.
6If the notice of redemption shall have been duly given and if on
7or before the redemption date the funds necessary for such
8redemption shall have been set aside so as to be and continue to
9be available therefor, earnings upon the accounts called for
10redemption shall cease to accrue from and after the earnings
11date specified as the redemption date and all rights with
12respect to such accounts shall forthwith, after such redemption
13date, terminate, except only the right of the account holder of
14record to receive the redemption price.

15Section 815. Lien on Savings Accounts.--Every association
16shall have a lien, without further agreement or pledge, upon all
17savings accounts owned by any member to whom or on whose behalf
18the association has made an advance of money by loan or
19otherwise and upon the default in the repayment or satisfaction
20thereof the association may, without notice to or consent of the
21member, cancel on its books all or any part of the savings
22accounts owned by such member and apply the value of such
23accounts in payment on account of such obligation. An
24association may by written instrument waive its lien in whole or
25in part of any savings accounts. Any association may take the
26pledge of savings accounts of the association owned by a member
27other than the borrower as additional security for any loan
28secured by an account, or by an account and real estate, or as
29additional security for any real estate loan. Notwithstanding
30any other provision of this section, no association shall have a

1lien upon a savings account as a result of a default on any real
2estate loan, unless the said account is specifically pledged as
3security for the said real estate loan.]

4Section 45. Section 816 of the act, amended December 21,
51988 (P.L.1427, No.174), is repealed:

6[Section 816. Authorizing Payment of Earnings or Interest on
7Savings Accounts.--The board of directors shall determine the
8earnings or interest, if any, to be credited not less frequently
9than annually to savings accounts on the books of the
10association unless a savings account holder shall have requested
11and the association shall have agreed to pay earnings or
12interest on such savings account in cash. Earnings or interest
13payable in cash may be paid by check or bank draft. All accounts
14of the same type and class shall be paid the same rate of
15earnings or interest.]

16Section 46. Sections 817 and 818 of the act are repealed:

17[Section 817. Accounts Subject to Attachment.--Savings
18accounts of associations and Federal savings and loan
19associations shall be subject exclusively to attachment or any
20similar process and shall not be subject to levy and sale on
21execution or proceedings supplementary thereto.

22Section 818. Earnings Not Distributed.--An association may
23provide by resolution of its board of directors that it shall
24not distribute earnings on any savings account of less than a
25minimum amount fixed by such resolution, which amount shall be
26not more than fifty dollars ($50), or on any Christmas club,
27vacation club or other similar account in which the account is
28listed for withdrawal no later than fifteen months after the
29date of opening; and may, by resolution of its board of
30directors, fix a lesser amount than such minimum with respect to

1the distribution of earnings on savings accounts established in
2connection with a program offered by such association to
3children for the encouragement of thrift.]

4Section 47. Section 819 of the act, amended December 13,
51979 (P.L.522, No.115), is repealed:

6[Section 819. Service Charge.--An association may make a
7service charge of not more than five dollars ($5) in any
8calendar year against any savings account if at the time any
9such charge is made:

10(a) The association is not required to distribute earnings
11to such account,

12(b) No payment has been made and no earnings have been
13distributed on such account for a period of at least thirty-six
14months next preceding the date on which such charge is made, and

15(c) Thirty days prior to making the first service charge the
16association has mailed to the holder of such account at his last
17known address a notice that service charges will be made in
18accordance with this section.]

19Section 48. Section 820 of the act, amended December 27,
201974 (P.L.1012, No.329), is repealed:

21[Section 820. Inactive Accounts.--Savings on which no
22payments have been made and on which earnings are unclaimed for
23a period of six years or longer may be listed for withdrawal by
24action of the association's board of directors without regard to
25any other provisions or limitations of the statute. Notice of
26such action shall forthwith be mailed to the holder of such
27savings at his last known address. Any such withdrawals that
28remain unclaimed after thirty days from the mailing of such
29notice may be placed in a special account held solely for the
30purpose of paying any future claims of the rightful owners

1thereof. Earnings shall cease to accrue on such withdrawals
2after the placing of the funds in the special account.]

3Section 49. Section 821 of the act is repealed:

4[Section 821. No Duty on an Association to Determine
5Ownership of Funds Placed in Savings Accounts.--An association
6shall be under no duty to determine the ownership of funds
7received by it for saving accounts, but shall be entitled to
8rely on the savings account contract with the named owners. An
9association shall not be liable to any person claiming to be the
10owner, part owner, joint owner or beneficiary in any savings
11account unless such person is named as owner or beneficiary
12therein or the association is supplied with a decree or order of
13court determining ownership.]

14Section 50. Section 822 of the act, amended December 21,
151988 (P.L.1427, No.174), is repealed:

16[Section 822. Reserves.--(a) Every association shall
17maintain general reserves which shall be used solely for the
18purpose of absorbing losses. Such reserves shall consist of all
19or any of the following:

20(1) A reserve for contingent losses,

21(2) A reserve for bad debts,

22(3) In the case of an association whose accounts are insured
23by the Federal Savings and Loan Insurance Corporation, a Federal
24insurance reserve.

25(b) Whenever the general reserves plus capital and capital
26surplus of an association are not equal to at least eight
27percent of the savings accounts and whenever the net worth of an
28association is not equal to at least ten percent of such savings
29accounts it shall credit to its general reserves each year an
30amount equal to not less than five percent, and as much more as

1it may deem desirable, of its net profits for the year.

2(c) Any net income remaining after reserve requirements are
3met and earnings distributions have been made may be retained in
4a surplus account.]

5Section 51. Sections 823, 823.1 and 823.2 of the act,
6amended or added December 21, 1998 (P.L.1002, No.132), are
7repealed:

8[Section 823. Account Insurance.--(a) Each association
9subject to this act shall obtain insurance of accounts as soon
10as the association can qualify for such coverage as provided by
11the Federal Deposit Insurance Corporation or the National Credit
12Union Administration.

13(a.1) Notwithstanding any provision to the contrary, no
14association may conduct the business of an association after
15thirty months from the effective date of this subsection unless
16its deposits are insured by the Federal Deposit Insurance
17Corporation or National Credit Union Administration.

18(a.2) A PSAIC insured association shall receive a refund of
19its capital deposit, to the extent that it exists, from the
20PSAIC pursuant to the following conditions:

21(1) An association which files an application for Federal
22deposit insurance with the Federal Deposit Insurance Corporation
23no later than eighteen months from the effective date of this
24subsection and which application is deemed to be substantially
25complete by the Federal Deposit Insurance Corporation, at such
26time as the association shall withdraw from the PSAIC.

27(2) An association which, no later than eighteen months from
28the effective date of this subsection, files an application with
29the department pursuant to Article XI and/or any appropriate
30Federal regulator to merge or consolidate with an existing

1federally insured institution and which application is deemed to
2be substantially complete by the department and/or any
3appropriate Federal regulator, at such time as the association
4withdraws from the PSAIC.

5(3) An association which files a certificate of election to
6dissolve no later than eighteen months from the effective date
7of this subsection, at such time as the association withdraws
8from the PSAIC.

9(4) An association which files an application to merge or
10convert pursuant to the provisions of section 1101.1 and which
11application is deemed to be substantially complete by the
12department and/or any appropriate Federal regulator no later
13than eighteen months from the effective date of this subsection,
14at such time as the association shall withdraw from the PSAIC.

15(5) An association which fails to file a substantially
16complete application for Federal deposit insurance with the
17Federal Deposit Insurance Corporation or fails to file a
18substantially complete application to merge or consolidate with
19a federally insured institution or fails to file a substantially
20complete application to merge with or convert to a credit union
21pursuant to section 1101.1 or fails to file a certificate of
22election to dissolve no later than eighteen months from the
23effective date of this subsection shall receive a refund of its
24capital deposit to the extent that it exists pursuant to the
25provisions of section 823.2(c).

26(a.3) Upon a PSAIC insured association's application to the
27department, the deadline for obtaining Federal insurance as set
28forth in subsection (a.1) may be extended for a period deemed
29appropriate by the department. The department's discretion in
30granting the extension shall be based on whether:

1(1) The association has filed an application for extension
2of the deadline at least thirty days prior to the deadline set
3forth in subsection (a.1).

4(2) The association has complied with the filing
5requirements of this section.

6(3) The association is in compliance with all other
7provisions of this act.

8(4) The department determines that the association has been
9diligent in fulfilling its obligations under this act.

10(5) The department determines that the association has
11replied in a timely fashion to all reasonable requests for
12information from any regulatory agency.

13(6) Other compelling reasons relative to this act which the
14department deems appropriate.

15(b) An association which is not insured or which loses its
16insurance may become the subject of a charter revocation
17proceeding by the department.

18Section 823.1. Dissolution.--Notwithstanding section 1207, a
19PSAIC insured association which fails to file a substantially
20complete application for Federal insurance of its accounts as an
21insured institution or an application with the department or any
22Federal banking regulator as required by law for merger with an
23existing federally insured institution or an application to
24merge with or convert to a credit union within the time period
25set forth in section 823 may be subject to the imposition of a
26plan of dissolution by the department. The distribution of
27assets shall be in accordance with section 1208. Additionally,
28the department may appoint a conservator to the association who
29shall have full authority to wind up the affairs of the
30association, including filing dissolution documents with the

1department or other relevant agency. The board of directors and
2the members shall have no authority upon appointment of a
3conservator.

4Section 823.2. PSAIC.--(a) Notwithstanding any provision of
5law to the contrary, including, without limitation, the
6provisions of the act of April 6, 1979 (P.L.17, No.5), referred
7to as the Pennsylvania Savings Association Insurance Corporation
8Act, or any bylaws, rules or regulations issued pursuant
9thereto, a PSAIC insured association which complies with the
10filing requirements of section 823 shall withdraw from the PSAIC
11by providing written notice of withdrawal to the board of
12directors of the PSAIC and shall receive a refund of the
13association's capital deposit to the extent that it exists
14within sixty days of the written notice.

15(b) Notwithstanding any provision of the Pennsylvania
16Savings Association Insurance Corporation Act or any law to the
17contrary, all of the PSAIC corporate powers shall be exercised
18by a board of directors, the number and qualifications of which
19shall be established by the PSAIC's bylaws. In addition to the
20directors elected by the member associations as provided in the
21bylaws of the PSAIC, the directors shall appoint up to five
22additional directors of the PSAIC at such time as the department
23deems appropriate, subject to written approval of each
24additional director by the department within sixty days of
25receipt by the department of written notice from the PSAIC that
26it has selected such a director. The five additional directors
27of the PSAIC shall represent the public interest and serve for a
28term of four years or until replaced. The terms shall commence
29on the date of the first meeting of the board of directors held
30following their appointment. Any director so appointed shall not

1be affiliated, either directly or indirectly, with any PSAIC
2member association, shall have a general knowledge of the
3financial services industry, shall be a registered voter of and
4shall reside in this Commonwealth. Any vacancy occurring in the
5term of any director shall be filled by the directors within
6sixty days.

7(c) Notwithstanding any provision of the Pennsylvania
8Savings Association Insurance Corporation Act or any other law
9to the contrary, the board of directors of the PSAIC shall
10proceed to dissolve the PSAIC under 15 Pa.C.S. Ch. 59 Subch. F
11(relating to voluntary dissolution and winding up) at such time
12when all member associations have withdrawn from the PSAIC, by
13the adoption of a resolution. At such time, the board of
14directors of the PSAIC may elect to reimburse the capital
15deposit of an association which did not comply with the
16provisions of section 823. At such time that the PSAIC has no
17outstanding liabilities, the PSAIC may distribute its retained
18earnings to the associations which were members of the PSAIC on
19June 30, 1996. The retained earnings of the PSAIC shall be
20distributed on a pro rata basis. The pro rata distribution shall
21be calculated by dividing an association's capital deposit
22liabilities as of June 30, 1996, by the total capital deposits
23of all associations belonging to the PSAIC on June 30, 1996.]

24Section 52. Section 824 of the act, added June 5, 1981
25(P.L.81, No.28), is repealed:

26[Section 824. Cashing Checks for Senior Citizens.--An
27institution shall after proper identification of payee cash,
28without charge, any State or Federal Government check presented
29for payment by the payee of the check who is a senior citizen
30sixty-five years of age or older.]

1Section 53. Section 825 of the act, added April 9, 1982
2(P.L.334, No.94), is repealed:

3[Section 825. Dividends on Permanent Reserve Fund Stock.--An
4association may not more frequently than it credits or pays
5earnings to savings accounts pay a dividend on permanent reserve
6fund stock subject to the following conditions:

7(1) The association shall have during the then current year,
8from its net earnings, credited or paid earnings on its savings
9accounts,

10(2) The association shall have from its net earnings of the
11then current year in which the dividend is to be paid credited
12to its general reserves such amounts as may be required by the
13department, and

14(3) No dividends shall be declared for permanent reserve
15fund stock that will impair reserves as set forth in section 822
16or 10 Pa. Code section 40.1 except upon written permission by
17the department.]

18Section 54. Article IX heading of the act is repealed:

19[ARTICLE IX

20INVESTMENT OPERATIONS]

21Section 55. Section 901 of the act, amended June 5, 1981
22(P.L.81, No.28), is repealed:

23[Section 901. Loans on Security of Real Estate.--An
24association may make a loan or participate in making loans or
25buy or sell participations in loans secured by a mortgage which
26is a lien on real estate located in the regular lending area of
27the association, owned by the borrower in fee or in which he has
28a leasehold interest. The total of all liens held by an
29association and all prior liens against real estate shall not
30exceed the maximum percentages of fair market value set forth in

1the subsections of this article. The loan shall be evidenced by
2a bond, note or other evidence of indebtedness and shall be made
3upon the security, terms and conditions and in the amount set
4forth in this article for such loan. Mortgage loans and
5participations shall be primarily on one to four family
6residential properties.]

7Section 56. Section 902 of the act, amended July 22, 1977
8(P.L.92, No.33), is repealed:

9[Section 902. Eighty Percent Loans on Properties Designed
10Primarily for Residential Use by Not More Than Four Families.--
11An association may make a mortgage loan on the security of real
12estate on which there is erected a building, a substantial
13portion of which is used as a one to four family residential
14structure or upon the security of real estate upon which such a
15building is to be erected and the loan is made for financing the
16construction of such building. A loan made under this section
17shall not exceed eighty percent of the fair market value of the
18property. An association may make a mortgage loan which exceeds
19eighty percent but does not exceed ninety percent of the fair
20market value of a one to four family residential structure or
21upon the security of real estate upon which such a building is
22to be erected and the loan is made for financing the
23construction of such building: Provided, That the principal
24portion of the loan in excess of seventy-five percent of the
25value is insured with a private mortgage guaranty company
26licensed to do business in the Commonwealth of Pennsylvania and
27approved by the department.]

28Section 57. Section 903 of the act, amended December 1, 1971
29(P.L.572, No.148) and repealed in part December 27, 1974
30(P.L.1012, No.329), is repealed:

1[Section 903. Over Eighty Percent Loans on One Family
2Residential Properties.--An association may make a mortgage loan
3which exceeds eighty percent, but does not exceed ninety
4percent, of the fair market value of a one family residential
5property if the following conditions are met:

6(b) The real estate shall be improved with a structure
7designed for residential use for one family or the loan is made
8to finance the construction of a structure designed for
9residential use for one family. Where the loan is made to
10finance construction, there shall not be disbursed on said loan
11in excess of eighty percent of the fair market value of the real
12estate unless construction has been fully completed and title is
13in the name of the owner who is occupying or will occupy the
14home as his residence or unless the owner is the buyer who has
15executed an agreement with the association assuming and agreeing
16to pay the mortgage.

17(c) The principal of the obligation of the loan shall not
18exceed thirty thousand dollars ($30,000) unless the department
19by regulation approves the granting of loans under this
20subsection in amounts greater than thirty thousand dollars
21($30,000).

22(d) The principal amount of all loans made under this
23section shall not exceed twenty percent of the association's
24assets. In calculating the said twenty percent there shall be
25deducted all loans on which the unpaid balance is less than
26eighty percent of the fair market value at the date of the
27making of the loan. Said twenty percent shall be in addition to
28any percentage of loans permitted to be invested in any other
29type of mortgage. The limitations of this subsection shall not
30apply to any loan during the time that at least the top twenty

1percent of said loan is insured with a reputable private
2mortgage guarantee company licensed to do business in the
3Commonwealth of Pennsylvania and approved by the department. The
4said limitation shall not apply when the mortgage qualifies in
5all respects as an eighty percent or less loan.

6(e) Loans in excess of the percentage herein authorized may
7be made on one family residential properties in such amounts and
8in such percentages and on such conditions as the department may
9by regulation authorize.]

10Section 57.1. Section 904 of the act, amended December 1,
111971 (P.L.572, No.148), is repealed:

12[Section 904. Seventy-five Percent Loans on Properties
13Designed Primarily for Residential Use by Five or More
14Families.--An association may make a mortgage loan not exceeding
15seventy-five percent of the fair market value of a property
16designed primarily for residential use by five or more families
17or upon the security of real estate on which such a building is
18to be erected or upon the security of real estate on which a
19building consisting of dwelling units used to house persons
20affiliated with a college, university, hospital or other
21institution is erected or to be erected. The department may by
22regulation authorize loans in excess of seventy-five percent of
23the fair market value on any or all of the aforedescribed
24properties.]

25Section 58. Sections 905 and 906 of the act, amended June 5,
261981 (P.L.81, No.28), are repealed:

27[Section 905. Loans on Other Income Producing Properties.--
28An association may make a mortgage loan not exceeding ninety
29percent of the fair market value of an income producing property
30not designed primarily for residential use limited to not in

1excess of twenty percent of the assets of an association. Such
2mortgage loans shall be a first lien on the premises described
3in the mortgage.

4Section 906. Insured or Guaranteed Loans.--The maximum
5limitations on loans set forth in sections 902 through 905
6inclusive, as to percentage of fair market value of properties
7on which loans are made, shall not apply to loans insured or
8guaranteed in whole or in part by the United States, or by the
9Commonwealth of Pennsylvania, or any instrumentality of either
10of them or if there is a commitment to so insure or guarantee.]

11Section 59. Section 907 of the act, amended December 27,
121974 (P.L.1012, No.329), is repealed:

13[Section 907. Limitation on Aggregate of Loans Made on Five
14or More Family Residential Properties, Development Loans, and
15Other Income Producing Properties.--The aggregate of all loans
16made by an association on residential properties for five or
17more families, development loans, and other income producing
18properties and of participation loans secured by such properties
19shall not exceed fifty percent of the assets of the
20association.]

21Section 60. Section 908 of the act, amended June 5, 1981
22(P.L.81, No.28), is repealed:

23[Section 908. Development Loans.--(a) An association may
24lend on the security of developed building lots or sites, or for
25the acquisition and development of land into building lots or
26sites not in excess of seventy-five percent of the fair market
27value of the real estate security as of the date of the
28advancement of the funds and such loans may be combined with
29construction loans and permanent loans, subject to the following
30conditions:

1(1) If the building lots or sites are completely developed
2at the time the loan is made the security documents shall
3require the borrower within a period of not more than six months
4to commence construction of one to four family residential
5structures on a specified number of such building lots or sites
6and within a period of eight years to complete construction of
7said structures on all of the building lots or sites.

8(2) If the building lots or sites are to be developed out of
9the proceeds of the loan the security documents shall require
10development of the real estate security to be commenced in not
11more than nine months.

12(b) An association may lend not over seventy percent of the
13fair market value of real estate security for the acquisition
14and development or the development of land for such purposes as
15the department may by regulation authorize.

16(c) The total of all disbursed unrepaid loans under this
17section shall not at any time exceed ten percent of the assets
18of the association.

19(d) Notwithstanding the provisions of subsections (a) and
20(b) of this section an association may lend to an individual on
21the security of a developed building lot or site designed for
22the erection of his permanent one family residence, without any
23requirement for the commencement of construction, not in excess
24of ninety percent of the fair market value, provided the
25security document shall require the borrower to repay the loan
26in a period not longer than fifteen years and shall require
27equal monthly payments throughout said fifteen-year period
28sufficient to result in an amortization of not less than thirty
29percent of the principal amount of the loan at the expiration of
30fifteen years.]

1Section 61. Section 909 of the act, amended December 13,
21979 (P.L.522, No.115), is repealed:

3[Section 909. Loans for Housing for the Aging.--An
4association may grant mortgage loans in an amount not exceeding
5at any time ten percent of its assets in loans or participating
6interests therein to provide housing facilities for the aging
7which facilities are existing or are to be constructed for such
8purpose or altered for such purpose. No such loans shall exceed
9ninety percent of the fair market value of the improved real
10estate given as security therefor.]

11Section 62. Section 910 of the act, amended June 5, 1981
12(P.L.81, No.28), is repealed:

13[Section 910. Urban Renewal Loans.--An insured association
14may grant or participate in a grant of mortgage loans within an
15urban renewal area as defined in subsection (a) of section 110
16of the Housing Act of 1949 as amended, provided, such loans
17shall not exceed ninety percent of the fair market value of any
18type of improved property. An association may make investments
19in real property and obligations secured by liens on real
20property located within a geographic area or neighborhood
21receiving concentrated development assistance by a local
22government under Title I of the Housing and Community
23Development Act of 1974 (Public Law 93-383) limited to not in
24excess of two percent of the assets of an association.]

25Section 63. Section 911 of the act is repealed:

26[Section 911. Limitation on Loans and Participation in Loans
27in Urban Renewal Areas.--The aggregate amount that an
28association may invest in loans and participations in loans in
29urban renewal areas plus the amount of real property owned by
30the association in urban renewal areas, plus investments made in

1accordance with the provisions of subsection 922 (j) of this act
2shall not exceed five percent of the assets of the association.
3Loans in urban renewal areas which meet all of the requirements
4of this act without the benefit of the authority to make such
5loans as contained in section 910 shall not be included in said
6five percent limitation.]

7Section 64. Section 912 of the act, amended December 1, 1971
8(P.L.572, No.148), is repealed:

9[Section 912. Business Development Credit Corporation
10Loans.--An association may make such mortgage loans as are
11authorized by the Business Development Credit Corporation Law of
121959 (P.L.1647), as amended, and as authorized or permitted by
13the act of August 23, 1967 (P.L.251), known as the "Industrial
14Development Authority Law."]

15Section 65. Section 913 of the act, amended June 5, 1981
16(P.L.81, No.28), is repealed:

17[Section 913. Construction Loans.--(a) Any mortgage herein
18authorized may be made for the acquisition and construction or
19the construction of a structure as hereinbefore classified for
20loans on improved real estate. The security documents shall
21specify the terms upon which advances are to be made on such
22construction loan and it may be combined with a permanent loan
23to continue after completion of the construction.

24(b) An association may also make construction loans without
25security. In such loans the investment shall not exceed the
26greater of:

27(1) The sum of its surplus, undivided profits, and reserves;
28or

29(2) Five percent of the assets of the association.

30(c) The principal purpose of such construction loans without

1security, as provided in subsection (b), shall be to provide
2financing with respect to what is, or is expected to become
3primarily residential real estate where:

4(1) the association relies substantially for repayment on
5the borrower's general credit standing and forecast of income
6without other security; or

7(2) the association relies on other assurances for
8repayment, including, but not limited to a guarantee or similar
9obligation of a third party.

10(d) Investments in construction loans without security shall
11not be included in any percentage of assets or other percentage
12referred to in this act.]

13Section 66. Section 914 of the act is repealed:

14[Section 914. Additional Collateral for Mortgage Loans.--(a)
15Any mortgage loan may be increased by the withdrawal value of
16any savings account pledged to the association by the borrower
17or any savings account holder as additional security for such
18loan. Such savings account or accounts assigned or pledged as
19additional collateral security for the loan by the borrower or
20any other savings account owner may be released by the
21association whenever the mortgage loan meets all of the
22requirements of this act and may be legally made at the time of
23release without the requirement of additional collateral.

24(b) An association may accept and hold additional collateral
25of any kind if the loan meets all of the requirements of this
26act and could have been legally made without such additional
27collateral.]

28Section 67. Section 915 of the act, amended October 5, 1978
29(P.L.1123, No.263), December 13, 1979 (P.L.522, No.115) and June
305, 1981 (P.L.81, No.28), is repealed:

1[Section 915. Terms of Mortgage.--Mortgages other than those
2set forth in subsections (c), (d), (e), (f), (k) and (l) of this
3section shall be written on such basis and in such aggregate
4amounts as the department may by regulation authorize or on a
5monthly direct reduction loan basis and the contract shall
6provide that the first monthly payment shall be made not later
7than sixty days after the advance of the loan, provided however:

8(a) If a direct reduction loan is to finance new
9construction the first monthly payment may be postponed to a
10date not later than twenty-four months after the date of the
11first advance made on the loan. Notwithstanding the foregoing
12the department may by regulations extend the first monthly
13payment date on construction loans to a period later than
14twenty-four months if the construction loan meets the
15requirements of the regulations of the department.

16(b) If the term of the loan is for a period not exceeding
17ten years and if the loan together with all other loans held by
18the association on the security of the same property does not
19exceed sixty-six and two-thirds percent of the fair market value
20of such property the loan may be made without provision for
21monthly amortization provided, however, that the security
22documents require the payment of interest not less frequently
23than semi-annually.

24(c) If the loan is made for the purpose of financing new
25construction of a one to four family residential property and is
26in an amount not to exceed eighty percent of the fair market
27value thereof it may be made for a term not exceeding twenty-
28four months without requiring amortization during said twenty-
29four months. Interest shall be payable not less frequently than
30semi-annually. If the loan is for the purpose of financing

1construction of residential property designed for use by more
2than four families and in an amount not exceeding seventy-five
3percent of the fair market value it may be made for a period not
4exceeding twenty-four months without amortization but interest
5shall be payable not less frequently than semi-annually.
6Notwithstanding the foregoing the department may by regulations
7extend the first monthly payment date on construction loans to a
8period later than twenty-four months if the construction loan
9meets the requirements of the regulations of the department.

10(d) If the loan is made for the purpose of facilitating the
11trade-in or exchange of residential real property a substantial
12portion of which is used as a dwelling for not more than four
13families and does not exceed ninety percent of the fair market
14value of the property it may be made for a term not exceeding
15eighteen months without amortization but interest shall be
16payable not less frequently than semi-annually.

17(e) Any development loan under section 908 shall be
18repayable within eight years and the interest on any such loan
19shall be payable at least semi-annually.

20(f) None of the limitations as to terms of repayment or term
21of mortgage shall be construed to apply to a purchase money
22mortgage taken by an association on real property or leasehold
23interest in real property owned by it and sold to the borrower.

24(g) Interest; premiums and charges:

25(1) Loans including variable interest rate loans may be made
26at rates of interest as authorized by the act of January 30,
271974 (P.L.13, No.6), referred to as the Loan Interest and
28Protection Law, or any other statute, or at a maximum rate of
29interest not in excess of the maximum lawful interest rate
30permitted to be charged by a National Bank located in

1Pennsylvania under 12 U.S.C. § 85: Provided, That any applicant
2to whom a variable interest rate mortgage is offered is also
3offered a direct reduction loan at reasonably competitive terms
4and rate, and that any association offering variable interest
5rate loans which ceases to offer such loans shall be prohibited
6from again offering variable interest rate loans for a period of
7seven years from the date of making its last variable interest
8rate loan,

9(2) Loans may be made with or without charging the borrower
10a premium. If a premium is charged by the association and
11deducted in advance it shall not exceed ten percent of the
12amount of the loan. If the premium is paid by the borrower in
13installments it shall not exceed one percent per annum of the
14unpaid balance of the principal amount of the loan and shall be
15payable in periodic installments extending over the period of
16the loan which installments shall be payable upon the same day
17as the periodic payment of principal and interest is due upon
18said loan,

19(3) If the borrower shall prepay a loan upon which the
20association has deducted a premium in advance no refund shall be
21required if the amount of said premium amounts to two percent or
22less of the amount of the loan. However, if the premium exceeds
23two percent of the amount of such loan the association shall not
24retain more than one one-hundredth of such premium for each
25calendar month that has expired since the date of the first
26advance of funds under the loan,

27(4) A premium paid pursuant to the provisions of this
28subsection by a borrower from an association shall not be deemed
29usurious and the total interest and premium shall be deemed a
30lawful contract rate,

1(5) An association may levy a reasonable charge upon any
2corporation or person applying for a mortgage loan for its
3services in making searches of title and appraising the real
4property offered to the association as security, in drawing any
5papers incident to the loan for which such real property is
6given as security, and in taking any other action permitted or
7required by law with respect to such loan, including the
8reducing of the amount of the loan, extending its maturity or
9otherwise readjusting or refinancing it, releasing any portion
10of the security and for any other action by the association
11permitted or required by law with respect to such loans,

12(6) An association may impose a late charge upon all
13borrowers who do not make payment on the date specified. Such
14late charge may be imposed each month on the amount of the
15payment which was not paid on the due date,

16(7) Borrowers shall have the right to repay a residential
17mortgage as defined in the act of January 30, 1974 (P.L.13,
18No.6) without the payment of any prepayment penalty or other
19charge for such prepayment at any time before the end of the
20period of the loan. On all other loans such limitations on
21prepayment and prepayment penalties and charges may be made and
22changed as are provided in the loan contract.

23(h) Mortgages may be written to permit the nonpayment of one
24month's principal and interest payment not more frequently than
25one time in a calendar year and not in total more than five
26times. Any obligation not met by such skip payments shall remain
27mortgagor's obligation.

28(i) Any mortgage authorized by this act and required to be
29repaid on a direct reduction loan basis may be written on a
30monthly payment basis with reduced monthly payments during the

1first twenty-five percent of the total number of years for which
2the mortgage is written. Thereafter the mortgage shall be paid
3on a direct reduction basis.

4(j) Mortgages may be written providing for advances of the
5principal periodically over a period of years. Interest shall be
6payable at the date of said periodic payments. Repayment of the
7mortgage shall be made on a not longer than ten year direct
8reduction basis commencing not later than three months after the
9date of the last payout of principal. The total of all advances
10under the mortgage shall constitute a lien on the real estate
11described in the mortgage from the date of the recording of the
12mortgage.

13(k) Except in the case of a due-on-sale clause or except in
14the case of a default and in accordance with the act of January
1530, 1974 (P.L.13, No.6), referred to as the Loan Interest and
16Protection Law, no loan for financing the purchase of an owner
17occupied one or two family residential property shall contain a
18provision that the loan may be accelerated at the lender's
19option. Balloon loans are prohibited for financing the purchase
20of an owner occupied one or two family residential property.
21This restriction shall apply to all commitments for mortgage
22loans granted subsequent to the effective date of this
23subsection.

24(l) Whenever a renegotiable or adjustable rate mortgage loan
25is to be made under the authority of this act, the initial or
26base value of the reference index to be utilized shall be
27committed to the borrower at the same time that the initial
28contract interest rate is committed to the borrower and shall be
29entered in the loan documents as a contractual provision of the
30loan.]

1Section 68. Section 916 of the act, amended December 21,
21988 (P.L.1427, No.174), is repealed:

3[Section 916. Limitation on Amount of Loans to Any One
4Borrower.--An association shall not, directly or indirectly,
5grant loans, except loans secured by savings accounts in the
6association, to any one corporation or person to a total amount
7in excess of ten percent of the amount of its savings.

8(a) In computing the total loans made by an association to
9an individual, there shall be included all loans made by the
10association to a partnership or other unincorporated association
11of which he is a member, all loans made either for his benefit
12or for the benefit of such partnership or other unincorporated
13association, and all loans to or for the benefit of a
14corporation of which he owns twenty-five percent or more of the
15capital stock.

16(b) In computing the total loans made by an association to a
17partnership or other unincorporated association, there shall be
18included all loans to its individual members, all loans made for
19the benefit of such partnership or other unincorporated
20association, or of any member thereof, and all loans to or for
21the benefit of any corporation of which the partnership or
22unincorporated association, or any member thereof, owns twenty-
23five percent or more of the capital stock.

24(c) In computing the total loans made by an association to a
25corporation, there shall be included all loans made for the
26benefit of the corporation and all loans to or for the benefit
27of any individual who owns twenty-five percent or more of the
28capital stock of such corporation.]

29Section 69. Section 917 of the act, amended December 13,
301979 (P.L.522, No.115) and December 21, 1988 (P.L.1427, No.174),

1is repealed:

2[Section 917. Right to Make, Purchase, Sell and Participate
3in Mortgages and Other Loans.--(a) An association may purchase
4and sell loans and participations in loans and participate with
5other lenders in originating and making any type of loan that it
6is authorized to make under the provisions of this act.

7(b) In addition to the authority set forth in sections 901
8and 910 of this article, an association shall have the right to
9make and purchase mortgages or participations in mortgages
10secured by property outside its regular lending area, subject to
11the following conditions:

12(3) No mortgage shall be made nor shall a mortgage or
13participation interest in a mortgage be purchased unless the
14mortgage is one that the association could make under the
15provisions of this act if the security property were within its
16regular lending area, provided, however, that if the mortgage
17which is being purchased or in which a participation is being
18purchased is in a state other than the Commonwealth of
19Pennsylvania and mortgage guarantee insurance is required, the
20insurer shall be a company that is authorized to do business in
21the state in which the real property which is security for the
22mortgage loan is situated.

23(4) The dollar amount that an association may have invested
24in mortgages and participation loans outside its regular lending
25area shall at no time exceed fifty percent of the assets of the
26association. This limitation shall not apply to loans insured or
27guaranteed in whole or in part by the United States or any
28instrumentality thereof or if there is a commitment to so insure
29or guarantee.

30(5) Such further conditions as the department may prescribe

1by regulation, giving primary consideration to the Declaration
2of Purposes as provided under section 103 of this act.]

3Section 70. Section 918 of the act, amended December 13,
41979 (P.L.522, No.115), is repealed:

5[Section 918. Loans for Property Repair, Alteration and
6Improvement.--Notwithstanding any other provisions of this or
7any other act an association may grant loans for repair,
8alteration or improvement of real property without the necessity
9of mortgage security subject to the following provisions:

10(a) When such loans are insured or will be insured under
11Title I of the National Housing Act they may be granted in any
12amount and on any terms permitted by that act or the regulations
13issued thereunder.

14(b) When any such loan is not insured under Title I of the
15National Housing Act the principal amount thereof shall not
16exceed the amount authorized under Title I of the National
17Housing Act and the loan shall be evidenced by a judgment note
18or other written evidence of debt requiring repayment in regular
19monthly installments over a period not exceeding that amount
20authorized under Title I of the National Housing Act with annual
21interest at a rate not exceeding the sum of the authorized
22interest rate for loans insured under Title I of the National
23Housing Act plus the annual rate for insurance on loans insured
24under Title I of the National Housing Act or creditor insurance
25applied to the loan on the declining balance except that loans
26over five thousand dollars ($5,000) shall be recorded or filed
27so as to create a lien position in the county in which the real
28estate is located. A loan is authorized under this section only
29if the association prepares and retains in its files written
30evidence that the loan is of the type that would be insurable

1under Title I of the National Housing Act. Such written evidence
2shall be retained in the files of the association while the loan
3is outstanding and for a period of one year thereafter. The note
4or other written evidence of debt shall contain a provision that
5if the borrower shall sell the premises or assign his leasehold
6interest therein or remove therefrom any improvements described
7in the security agreement the entire balance remaining due on
8the loan shall immediately become due and payable. In addition
9to the interest herein authorized an association may make the
10following charges in connection with said loan:

11(1) Premiums for insurance obtained in connection with the
12loan, but not including any charge for creditor insurance, if
13any, on such loan,

14(2) A single delinquency charge for each installment in
15arrears for a period of more than fifteen days other than by
16reason of acceleration or by reason of a delinquency on a prior
17installment in an amount not to exceed the lesser of five
18dollars ($5.00) or five percent of the amount of the
19installment,

20(3) A charge for an extension in an amount not to exceed two
21percent of the unpaid balance of the loan. Said charge may be
22imposed only one time during the life of the loan,

23(4) Fees paid for filing documents in public offices in
24connection with said loan,

25(5) Actual expenditures including reasonable attorneys' fees
26for proceedings to collect the loan.

27(c) The aggregate amount of all such loans held by any one
28association at one time with or without Title I insurance shall
29not exceed twenty percent of its total assets. Any such loan
30made without Title I insurance shall also conform to rules and

1regulations which may be prescribed from time to time by the
2department.]

3Section 71. Section 919 of the act, amended June 5, 1981
4(P.L.81, No.28), is repealed:

5[Section 919. Consumer Loans and Certain Securities.--An
6association may make secured or unsecured loans for personal,
7family or household purposes, and may invest in, sell, or hold
8commercial paper and corporate debt securities subject to
9regulations issued by the department after giving due
10consideration to the laws and regulations applicable to Federal
11savings and loan associations. The total of such loans and
12investments are limited to not in excess of twenty percent of
13the assets of the association.]

14Section 72. Section 920 of the act, amended December 21,
151988 (P.L.1427, No.174), is repealed:

16[Section 920. Loans on the Security of Savings Accounts and
17Certificates.--Subject to regulation by the department, an
18association may make loans on the security of its savings
19accounts and certificates whether or not the borrower is the
20owner of such account, provided:

21(a) The association obtains a lien upon or a pledge of such
22savings accounts and certificates as security therefor,

23(b) The loan shall not exceed the withdrawal value of the
24savings account and certificates securing the loan.

25(c) Notwithstanding different provisions of any other act,
26interest on loans secured by savings accounts and certificates
27shall be at least one percent higher than the rate of earnings
28paid by the association on the account or certificate securing
29the loan.]

30Section 73. Section 921 of the act is repealed:

1[Section 921. Educational Loans.--Associations may invest in
2loans, obligations and advances of credit (all of which are
3hereinafter referred to in this section as "loans"), made for
4the payment of expenses incurred or to be incurred in acquiring
5an education at a post secondary institution of higher learning,
6but no association shall make any investment in loans under this
7section if the principal amount of its investment in such loans
8would thereupon exceed five percent of its assets. Such loans
9shall be made under such regulations as the department may
10prescribe. In the event that the department shall not prescribe
11regulations then said loans shall be made under such regulations
12as are issued under and in accordance with the Pennsylvania
13Higher Educational Assistance Agency Act. Any person under the
14age of twenty-one years securing an educational loan under this
15section or an educational loan made by a Federal association
16shall be deemed to have full legal capacity to contract and
17shall have all rights, powers, privileges and obligations of a
18person of full age with respect thereto.]

19Section 74. Section 922 of the act, amended December 1, 1971
20(P.L.572, No.148), December 27, 1974 (P.L.1012, No.329) and July
219, 1992 (P.L.414, No.89), is repealed:

22[Section 922. Securities and Obligations.--An association
23may invest its funds:

24(a) In bonds or other interest-bearing obligations of the
25United States, or those for the payment of the principal and
26interest on which the faith and credit of the United States is
27pledged,

28(b) In bonds, debentures and other obligations of the
29Federal Home Loan Banks issued under the provisions of the
30Federal Home Loan Bank Act,

1(c) In bonds or interest-bearing debentures issued by the
2Federal Savings and Loan Insurance Corporation under the
3provisions of Title IV of the National Housing Act,

4(d) In bonds or other interest-bearing obligations of the
5Commonwealth of Pennsylvania, or those for the payment of
6principal and interest on which the faith and credit of this
7Commonwealth is pledged,

8(e) In obligations issued by the Federal National Mortgage
9Association under the provisions of the National Housing Act,
10its amendments and supplements, but the aggregate amount of all
11such investments held by an association at any one time shall
12not exceed five percent of its savings accounts,

13(f) In stock of the Federal National Mortgage Association
14acquired by an association through making nonrefundable capital
15contributions in connection with the sale of mortgages to the
16Federal National Mortgage Association,

17(g) In demand, time, or savings deposits, shares or accounts
18or other obligations of any financial institution, the accounts
19of which are insured by a Federal agency,

20(h) In shares, bonds or notes of any State or regional
21business development credit corporation formed under the laws of
22this Commonwealth, or in bonds, notes or any other obligation
23authorized or permitted by the act of August 23, 1967 (P.L.251),
24known as the "Industrial Development Authority Law,"

25(i) In bonds and notes of the Pennsylvania Housing Agency
26created by the "Housing Agency Law,"

27(j) An insured association may invest in obligations in the
28form of a bond or other instruments secured by a first lien on
29improved real property located within the regular lending area
30of the association and within an urban renewal area as defined

1in subsection (a) of section 110 of the Housing Act of 1949 as
2amended. No such investment shall be made if the total amount of
3all obligations issued on the security of the said first lien
4exceeds eighty percent of the fair market value of the security
5property, or if the obligations do not require repayment of the
6entire principal debt, together with interest, in substantially
7equal payments, at least annually, over a term of not more than
8thirty years. No investment shall be made under this subsection
9if the amount of such investment, plus all amounts outstanding
10in investments made in accordance with this subsection and in
11mortgages made under section 910 of this act and investments in
12real estate made under section 923 (c) of this act, would
13aggregate a total in excess of five percent of the association's
14assets,

15(k) In obligations of any county, city, borough, town,
16township, district, institution district or other political
17subdivision of the Commonwealth of Pennsylvania having the power
18to levy taxes: Provided, That the faith and credit of such
19political subdivision is pledged for the payment of said
20obligations: And provided further, That at the date of the
21investment in such obligations such political subdivision is not
22in default in the payment of any part of the principal or
23interest owing by it upon any part of its funded indebtedness,

24(l) In obligations of a Pennsylvania municipality authority
25issued in accordance with applicable law, provided, however,

26(1) The obligations are not in default and for the period of
27five fiscal years next preceding the date of acquisition, the
28income of such authority available for fixed charges has
29averaged not less than one and one-tenth times the average
30annual fixed charges of its obligations over the life of such

1obligations, or

2(2) The project for which the obligations were issued,

3(i) Is under lease to a school district or school districts,
4or

5(ii) Is under lease to a municipality or municipalities, or

6(iii) Is subject to a service contract with a municipality
7or municipalities, and

8(iv) As a condition of said lease or service contract the
9authority will receive lease rentals or service charges
10available for fixed charges on the obligations which will
11average not less than one and one-tenth times the average annual
12fixed charges for such obligations over the life thereof.

13(3) As used in this section the term "income available for
14fixed charges" shall mean income after deducting operating and
15maintenance expenses.

16(4) The term "fixed charges" shall include principal, both
17maturity and sinking fund, and interest on bonded debt.

18(5) In computing the income available for fixed charges for
19the purpose of this section, the income so available of any
20corporation acquired by any municipality authority may be
21included, such income to be calculated as though such
22corporation had been operated by a municipality authority and an
23equivalent amount of bonded debt were outstanding.

24(m) In bonds or other interest-bearing obligations of The
25General State Authority,

26(n) In capital stock obligations or other securities of any
27service corporation if the entire capital stock of such
28corporation is available for purchase only by savings
29associations and savings banks organized and existing under the
30laws of the Commonwealth of Pennsylvania, by Federal savings and

1loan associations having their home offices in the Commonwealth
2of Pennsylvania, by regional thrift institutions, as that term
3is defined in section 114, and by foreign thrift institutions,
4as that term is defined in section 114. The department shall
5have the right to define service corporations and the activities
6thereof. An association may make investments in service
7corporations up to three percent of its assets plus such
8additional percentage of assets as the department may by
9regulation authorize,

10(o) In obligations issued or guaranteed by the International
11Bank for Reconstruction and Development or by the Inter-American
12Development Bank, or in loans in Latin American countries
13guaranteed by the United States (acting through AID) under
14subsection 224 of the Foreign Assistance Act of 1961, as
15amended,

16(p) In bankers' acceptances and bills of exchange eligible
17for purchase in the open market by a Federal Reserve Bank which
18have been accepted by a member of a Federal Reserve Bank subject
19to a limit for all acceptances by one acceptor held at any time
20of twenty-five percent of the capital and surplus of such
21acceptor and to a limit to the aggregate of all such acceptances
22held at any time of five percent of the assets of the
23association,

24(q) In such obligations of any corporation organized or
25caused to be organized by the United States of America or the
26Commonwealth of Pennsylvania as the department may by regulation
27authorize.

28(r) An association may invest its assets in time deposits of
29the Bank for Savings and Loan Associations, Chicago, Illinois.

30(s) With the prior approval of the department, in up to one

1hundred percent of the stock of a bank, a bank and trust
2company, a trust company, a bank holding company, a savings
3bank, a regional thrift institution, a regional thrift
4institution holding company or a foreign thrift institution or a
5foreign thrift institution holding company, as those terms are
6defined in the Banking Code of 1965 and in section 114.]

7Section 75. Section 922.1 of the act, added December 21,
81988 (P.L.1427, No.174), is repealed:

9[Section 922.1. Other Investments.--Notwithstanding any
10other provision of this act and as permitted in regulations
11promulgated by the department, an association may make such
12investments as may be authorized for a savings bank by section
13504 of the act of November 30, 1965 (P.L.847, No.356), known as
14the "Banking Code of 1965," and may make such loans as may be
15authorized for a savings bank by section 506(a)(iv) of the
16"Banking Code of 1965." The regulations promulgated by the
17department may include such conditions, restrictions,
18limitations or requirements as the department deems necessary
19and appropriate.]

20Section 76. Sections 923 and 924 of the act are repealed:

21[Section 923. Real Estate.--(a) An association may invest
22its funds in real property which the association occupies for
23its accommodations and transaction of its business, or such real
24property as it partly so occupies and it partly leases to
25others. No such investment may be made without the prior
26approval of the department of the total amount of the investment
27in real estate for the accommodation of the association and the
28transaction of its business exceeds the amount of the
29association's net worth.

30(b) An association may invest its funds in such real estate

1as it shall purchase at sales under judgments, decrees and
2mortgages held by it or as it shall otherwise acquire in good
3faith and in satisfaction of debts previously contracted to it
4or in order to protect an interest it may otherwise have
5lawfully acquired in such property. The board of directors shall
6annually review such investments. The said real estate shall be
7sold as promptly as the same may expeditiously be done.

8(c) An insured association may invest its funds in real
9property, or interests in real property, in its regular lending
10area and within an urban renewal area as defined in subsection
11(a) of section 110 of the Housing Act of 1949, as amended. No
12such investment shall be made unless the amount of such
13investment, plus all amounts outstanding in such investments,
14does not exceed two percent of the association's assets and
15total of such investments and loans made under section 910 and
16subsection (j) of section 922 does not exceed five percent of
17the association's assets. The department may prescribe
18regulations under which such investments may be made.

19Section 924. Avoidance of Loss on Loans Previously Made.--An
20association shall have the right to invest its funds, operate a
21business, manage or deal in property, or take any other action
22over whatever period of time may reasonably be necessary to
23avoid loss on a loan or investment previously made or an
24obligation previously created in good faith.]

25Section 77. Sections 925 and 926 of the act, added June 5,
261981 (P.L.81, No.28), are repealed:

27[Section 925. Nonconforming Loans.--An association shall
28have the right to invest limited to not in excess of five
29percent of the assets of the association in loans upon the
30security of or respecting real property or in interests therein

1used for primarily residential or farm purposes that do not
2comply with the limitations elsewhere provided in the code.
3Nothing in this section shall be construed to allow loans which
4would not otherwise be permitted under section 915(k).

5Section 926. Enforcement of Mortgages.--Before any
6residential mortgage lender, as defined by the act of January
730, 1974 (P.L.13, No.6), referred to as the Loan Interest and
8Protection Law, may accelerate the maturity of any residential
9mortgage obligation as defined by the Loan Interest and
10Protection Law, commence any legal action including mortgage
11foreclosure to recover under such obligation, or take possession
12of any security of the residential mortgage debtor, as defined
13by the Loan Interest and Protection Law, for such residential
14mortgage obligation, such person shall give the residential
15mortgage debtor notice of such intention as provided under
16section 403 of the Loan Interest and Protection Law. A form of
17notice of intention to foreclose, prescribed by regulations of
18the Secretary of Banking as provided under section 601 of the
19Loan Interest and Protection Law, shall be interpreted as
20satisfying the requirements of section 403 of said act.]

21Section 78. Article X heading of the act is repealed:

22[ARTICLE X

23AMENDMENT OF ARTICLES]

24Section 79. Sections 1001, 1002, 1003 and 1004 of the act
25are repealed:

26[Section 1001. Authorized Amendments.--(a) An association
27may, in the manner provided in this article, amend its articles
28at any time in order to make any change therein including, but
29without limiting the general authorization contained herein, an
30amendment:

1(1) To adopt a new name permitted to be used under this act,

2(2) To increase the term for which it is to exist or to
3provide for perpetual existence,

4(3) To change, add to or diminish the statement of its
5purpose or purposes,

6(4) To restate the articles in their entirety.

7(b) Articles as amended under this section must be such as
8would be authorized as original articles under this act except
9that articles restated in their entirety shall state the county
10of the current, instead of the original, place of business of
11the association and need not state names or other information
12concerning the first directors or the incorporators.

13Section 1002. Proposal and Adoption of Amendments.--(a) An
14amendment of the articles shall be proposed by adoption of a
15resolution by the board of directors directing that it be
16submitted to a vote at a meeting of members held upon not less
17than ten days' notice to all members. Such notice shall state
18the place, the day and the hour of the meeting.

19(b) The resolution proposing an amendment or amendments
20shall contain the language of each amendment by setting forth in
21full the articles as they would be amended or any provision
22thereof as it would be amended or by setting forth in full any
23matter to be added to or deleted from the articles. A copy of
24the resolution or a summary thereof shall be included with the
25notice of the meeting to the members. Any number of amendments
26may be submitted to the members at one meeting.

27(c) Unless the articles or bylaws require a greater number
28adoption of each amendment shall require the affirmative vote of
29a majority of the votes represented at the meeting in person or
30by proxy.

1Section 1003. Articles of Amendment.--(a) Upon the adoption
2of an amendment or amendments, articles of amendment shall be
3signed by two duly authorized officers of the association under
4its seal and shall contain:

5(1) The name of the association,

6(2) The county of its principal place of business,

7(3) The act of Assembly under which the association was
8incorporated and the date of its incorporation,

9(4) The time and place of the meeting of members at which
10the amendment was adopted and the kind and period of notice
11given to the members,

12(5) The number of votes represented at the meeting,

13(6) The number of votes for and against the amendment, and

14(7) The amendment or amendments adopted which shall be set
15forth in full.

16(b) The articles of amendment shall be delivered to the
17department together with:

18(1) Applicable fees payable to the department in connection
19with the articles and with the conduct of the investigation
20required by section 1005,

21(2) As soon as available, proof of publication of the
22advertisement required by section 1004, and

23(3) If the amendment would change the name of the
24association, evidence of reservation in the Department of State
25of the proposed new name.

26Section 1004. Advertisement.--(a) The association shall
27advertise its intention to deliver, or the delivery of, articles
28of amendment to the department once in each newspaper in which
29advertisement is required to be published in accordance with
30section 107 of this act.

1(b) The advertisement shall appear prior to, or within seven
2days after, the date of delivery of the articles of amendment to
3the department and shall set forth briefly:

4(1) The name of the association,

5(2) The county address of its principal place of business,

6(3) A statement that articles of amendment are to be, or
7have been, delivered under the provisions of this act,

8(4) The nature of the amendment, and

9(5) The date of delivery of the articles of amendment to the
10department.]

11Section 80. Section 1005 of the act, repealed in part June
123, 1971 (P.L.118, No.6), is repealed:

13[Section 1005. Approval of Articles of Amendment by
14Department.--(a) Upon receipt of the articles of amendment the
15department shall conduct such investigation as it may deem
16necessary to determine whether:

17(1) The articles of amendment and supporting items satisfy
18the requirements of this act,

19(2) The interest of its members and the convenience and
20needs of the public will be served by the amendment.

21(b) Within sixty days after receipt of the articles of
22amendment the department shall approve or disapprove the
23articles of amendment on the basis of its investigation. If the
24department shall approve the articles of amendment, it shall
25deliver them with its written approval to the Department of
26State and notify the association of its action. If the
27department shall disapprove the articles of amendment, it shall
28give written notice to the association of its disapproval and a
29statement in detail of the reasons for its decision.]

30Section 81. Sections 1006 and 1007 of the act are repealed:

1[Section 1006. Issuance of Certificate of Amendment.--If all
2the fees, charges, and taxes, if applicable, required by law
3have been paid and, in the case of a change of name, if the
4proposed new name of the association continues to be reserved or
5is available on the records of the Department of State, the
6receipt of the articles of amendment by the Department of State
7with the written approval of the department shall constitute
8filing of the articles of amendment as of the date and time of
9receipt or as of any later date and time specified by the
10department. The Department of State shall immediately issue to
11the association a certificate of amendment as of the date and
12time of filing with the approved articles of amendment attached
13thereto and shall make and retain a copy of such certificate and
14articles.

15Section 1007. Effect of Filing of Articles of Amendment in
16Department of State and of Certificate of Amendment.--(a) As of
17the filing of the articles of amendment in the Department of
18State, each amendment shall become effective and the articles of
19incorporation shall be deemed to be amended accordingly.

20(b) The certificate of amendment shall be conclusive
21evidence of the performance of all conditions required by this
22act for amendment of articles of incorporation, except as
23against the Commonwealth.

24(c) No amendment shall affect any existing cause of action
25in favor of or against the association, any pending action in
26which the association is a party or existing rights of persons
27other than members. If the amendment changes the name of the
28association, no action by or against the association shall be
29abated for that reason.]

30Section 82. Article XI heading of the act is repealed:

1[ARTICLE XI

2MERGERS, CONSOLIDATIONS, CONVERSIONS

3AND REORGANIZATIONS]

4Section 83. Section 1101 of the act, amended April 9, 1982
5(P.L.334, No.94), December 21, 1988 (P.L.1427, No.174), July 9,
61992 (P.L.414, No.89) and December 21, 1998 (P.L.1002, No.132),
7is repealed:

8[Section 1101. Mergers, Consolidations and Conversions.--(a)
9Upon compliance with the requirements of this article, two or
10more associations may be merged into one of such associations or
11consolidate into a new association.

12(b) Upon compliance with the requirements of this article
13and other applicable law, one or more associations and one or
14more savings banks may merge into an association or into a
15savings bank or consolidate into a new association or a new
16savings bank.

17(b.1) Upon compliance with the requirements of this article,
18one or more associations may merge or consolidate with a
19regional thrift institution or with a foreign thrift
20institution, as those terms are defined in, and subject to any
21applicable limits of, section 114.

22(b.2) Upon compliance with all of the requirements of this
23article, except section 1105, an association may purchase the
24assets and assume the liabilities of another association, a
25Federal savings association or a State savings bank.

26(b.3) Notwithstanding any law to the contrary, upon
27compliance with the requirements of this article and any other
28law, one or more associations with savings accounts insured by
29the PSAIC may merge or consolidate into a bank, bank and trust
30company, savings bank or interstate bank as those terms are

1defined in section 102 of the act of November 30, 1965 (P.L.847,
2No.356), known as the Banking Code of 1965, or a national bank.

3(c) Upon compliance with the requirements of this article,
4one or more associations and one or more Federal savings and
5loan associations may merge into an association or a Federal
6savings and loan association or consolidate into a new
7association or a new Federal savings and loan association.

8(d) The authority of an association to merge or consolidate
9into a Federal savings and loan association shall be subject to
10the condition that at the time of the transaction the laws of
11the United States shall authorize a Federal savings and loan
12association to merge or consolidate into an association.

13(e) Upon compliance with the requirements of this article
14and other applicable law, an association may be converted into a
15Federal savings and loan association or a savings bank.

16(f) Upon compliance with the requirements of this article
17and other applicable law and subject to the laws of the United
18States, a Federal savings and loan association may be converted
19into an association or a savings bank.

20(g) Upon compliance with the requirements of this article, a
21mutual association may be converted to a permanent reserve fund
22stock association and a permanent reserve fund stock association
23may be converted to a mutual association. Such converted
24associations may not be voluntarily liquidated for a period of
25ten years from the date of conversion.

26(h) (1) All savers (including all classes thereof) shall be
27given a preemptive right to purchase reserve fund stock. The
28preemptive right to savers shall be nonassignable. The
29department, by regulation, may define the rights and prescribe
30the terms on which they may be exercised.

1(2) No preemptive rights will be given to any savers if the
2book value of the total assets of the association to be
3converted (determined in accordance with generally accepted
4accounting principles) is less than two percent in excess of the
5book value of its total liabilities, unless determined to be in
6the public interest by the Secretary of Banking.

7(i) All mergers, consolidations and conversions in which the
8resulting institution is an association or a savings bank shall
9be subject to the approval of the department.]

10Section 84. Section 1101.1 of the act, added December 21,
111998 (P.L.1002, No.132), is repealed:

12[Section 1101.1. Credit Union Merger and Conversion
13Procedures for PSAIC Insured Associations.--(a) A PSAIC insured
14association which files an application to merge or convert into
15a credit union may merge or convert with the approval of the
16department. The department shall impose reasonable conditions
17and requirements on the association relating to the merger with
18or conversion to a credit union, including, but not limited to,
19the following:

20(1) The association shall approve the merger or conversion
21plan by the affirmative vote of two-thirds of the entire
22membership of the board of directors of the association and such
23vote of the members as the department may require.

24(2) The department shall approve the merger or conversion
25plan.

26(3) The merging or converting association must qualify for
27share insurance by the National Credit Union Administration
28Share Program.

29(b) Upon receipt of an application for approval of merger or
30conversion, the department shall conduct such investigation as

1it may deem necessary in order to ensure that the merger or
2conversion would be consistent with adequate and sound credit
3union practices and in the public interest.

4(c) If the department approves the articles of merger or
5conversion, it shall register its approval thereon and shall
6forthwith forward the articles to the Department of State for
7filing. As of the filing of the articles in the Department of
8State, the merger or conversion shall be effective and the
9existence of the association shall cease as a separate entity
10but shall continue in, and the parties to the plan shall be, a
11single corporation which shall be the resulting credit union and
12which shall have without further act or deed all property,
13rights, powers, duties and obligations of each party to the
14plan.

15(d) The membership of the resulting credit union may permit
16individuals who, at the time of merger or conversion, were
17members, savings account holders, directors, officers, employees
18or borrowers of the association to become members of the
19resulting credit union.

20(e) Rights of dissenting members shall be determined
21pursuant to section 1109.

22(f) Notwithstanding any provision of this act to the
23contrary, a credit union which results from a merger or
24conversion is permitted to hold assets of the association even
25though such assets do not conform with the requirements of this
26act. However, except with the permission of the Secretary of
27Banking the credit union must divest itself of all assets which
28do not conform with the requirements of this act within five
29years of the effective date of the merger or conversion.]

30Section 85. Sections 1102, 1103 and 1104 of the act are

1repealed:

2[Section 1102. Requirements for a Merger, Consolidation or
3Conversion.--The requirements for a merger, consolidation or
4conversion which must be satisfied by the parties thereto are as
5follows:

6(a) The parties shall adopt a plan stating the method, terms
7and conditions of the merger, consolidation or conversion,
8including the rights under the plan of the members and/or
9shareholders of each of the parties, and any agreement
10concerning the merger or consolidation.

11(b) If the proposed merger, consolidation or conversion will
12result in an association subject to the provisions of this act,
13a Federal savings and loan association or a savings bank,
14adoption of the plan by each party thereto shall require the
15affirmative vote of two-thirds of the entire membership of the
16board of directors of each association, Federal savings and loan
17association, or the board of trustees of a savings bank. The
18department may require such vote of the members as it deems
19proper.

20(c) Any modification of a plan which has been adopted shall
21be made by any method provided therein, or in the absence of
22such provision by the same vote as that required for adoption.

23(d) If a proposed merger, consolidation or conversion will
24result in an association subject to this act, or a savings bank
25subject to the Banking Code of 1965 as amended, an application
26for the required approval thereof by the department shall be
27made in a manner prescribed by the department. The department
28may require notice to be given to such persons as it designates.
29There shall also be delivered to the department:

30(1) Articles of merger, consolidation or conversion,

1(2) Applicable fees payable to the department in connection
2with the articles and with the conduct of the investigation
3required by section 1106,

4(3) If the resulting corporation is a savings bank under the
5Banking Code of 1965 as amended, any documents or other items
6required under that code,

7(4) If the proposed name of the resulting association or
8savings bank is not identical with the name of one of the
9parties to the plan, evidence of reservation of such name in the
10department of State, and

11(5) If there is any modification of the plan at any time
12prior to the approval by the department an amendment of the
13application and, if necessary, of the articles, signed in the
14same manner as the originals, setting forth the modification of
15the plan, the method by which such modification was adopted and
16any related change in the provisions of the articles of merger,
17consolidation or conversion.

18Section 1103. Articles of Merger, Consolidation or
19Conversion.--The articles of merger, consolidation or conversion
20shall be signed by two duly authorized officers of each party to
21the plan under their respective seals and shall contain:

22(a) The names of the parties to the plan and of the
23resulting association or savings bank.

24(b) The county of the principal place of business of each,

25(c) The votes by which the plan was adopted and the time,
26place and notice of each meeting in connection with such
27adoption,

28(d) The names and addresses of the first directors of the
29resulting association or the names and addresses of the first
30trustees of the savings bank,

1(e) In case of a merger, any amendment of the articles of
2the resulting association or savings bank,

3(f) A record of the employment contracts which are to be
4legally binding on the resulting association,

5(g) In the case of a consolidation, the provisions required
6in articles of incorporation of a new association by section 203
7of this act.

8(h) In the case of a conversion, the provisions required in
9the articles of incorporation of a new association, or savings
10bank as the case may be,

11(i) The plan.

12Section 1104. Action Where Approval by Department Not
13Required.--If a proposed merger, consolidation or conversion
14will result in a Federal savings and loan association, an
15association which is a party to a plan shall:

16(a) Notify the department of the proposed merger,
17consolidation or conversion,

18(b) Provide such evidence of the adoption of the plan as the
19department may request,

20(c) Notify the department of any abandonment or disapproval
21of the plan,

22(d) File with the department and with the Department of
23State a certificate of the approval of the merger or
24consolidation by the Federal Home Loan Bank Board or its
25successor which has the right on behalf of the United States to
26approve such mergers, consolidations or conversions into Federal
27savings and loan associations.]

28Section 86. Section 1105 of the act, amended December 21,
291988 (P.L.1427, No.174), is repealed:

30[Section 1105. Advertisement.--(a) The association shall

1advertise its intention to deliver, or the delivery of articles
2of merger, consolidation or conversion, once in each newspaper
3in which advertisement is required to be published in accordance
4with section 107 of this act and file proof of advertisement
5with the department.

6(b) The advertisement shall appear prior to, or within seven
7days after, the date of delivery of the articles to the
8department and shall set forth briefly:

9(1) The name and county of the principal place of business
10of each of the associations or Federal savings and loan
11associations or savings banks intending to merge, consolidate or
12convert,

13(2) The name and county of the place of business of the new,
14resulting or converted association or savings bank,

15(3) A statement that the articles of merger, consolidation
16or conversion are to be filed under the provisions of this act
17if such merger, consolidation or conversion results in an
18association subject to the provisions of this act, or if the
19articles provide for a conversion from a Federal savings and
20loan association to an association subject to the provisions of
21this act. If the resulting corporation is a savings bank subject
22to the Banking Code of 1965 as amended, a statement to this
23effect shall be contained in the advertisement,

24(4) The purpose or purposes of the resulting, new or
25converted association or savings bank.]

26Section 87. Section 1106 of the act, repealed in part June
273, 1971 (P.L.118, No.6), is repealed:

28[Section 1106. Approval of Merger, Consolidation or
29Conversion by the Department.--(a) Upon receipt of an
30application for approval of a resulting new or converted

1association or savings bank as a result of a merger,
2consolidation or conversion the department shall conduct such
3investigation as it may deem necessary to ascertain:

4(1) Whether the articles and supporting items satisfy the
5requirements of this act, and if the Banking Code of 1965 as
6amended is applicable, that the requirements of that act are
7satisfied,

8(2) Whether the name of the resulting, new or converted
9association or savings bank conforms with the requirements of
10the law,

11(3) If the name is not the same as either of the merging or
12consolidating associations in the case of a merger or
13consolidation the department shall determine whether the name is
14so similar to a name presently in use by a corporation that it
15is likely to mislead the public,

16(4) Whether the merger, consolidation or conversion would be
17consistent with adequate and sound savings and loan practices
18and in the public interest. In determining this the department
19may consider:

20(i) The financial history and condition of the parties to
21the plan,

22(ii) Their prospects,

23(iii) The management of the associations or corporations,

24(iv) The effect of the merger, consolidation or conversion
25on competition, and

26(v) The convenience and needs of the area primarily to be
27served by the resulting corporation.

28(b) Within sixty days after receipt of the application or
29within an additional period of not more than thirty days after
30receipt of the amendment to the application, the department

1shall approve or disapprove the application on the basis of its
2investigation. The department shall immediately give to the
3parties to the plan written notice of its decision and, in the
4event of disapproval, a statement in detail of the reasons for
5its decision.]

6Section 88. Sections 1107 and 1108 of the act are repealed:

7[Section 1107. Procedure After Approval by Department;
8Issuance of Certificate of Merger, Consolidation or
9Conversion.--(a) If the laws of the United States require the
10approval of the merger, consolidation or conversion by any
11Federal agency, the department shall after its approval retain
12the articles of merger, consolidation or conversion until it
13receives notice of the decision of such agency. If such agency
14shall refuse to give its approval, the department shall notify
15the parties to the plan that the department's approval has been
16rescinded for that reason. If such agency gives its approval,
17the department shall immediately deliver the articles of merger,
18consolidation or conversion with its written approval to the
19Department of State for filing as of a date and time specified
20by the department and shall notify the parties to the plan.

21(b) If all the taxes, fees and charges required by law shall
22have been paid and if the name of the resulting savings
23association or savings bank continues to be reserved or is
24available on the records of the Department of State, the receipt
25of the articles by the Department of State with the written
26approval of the department shall constitute filing of the
27articles of merger, consolidation or conversion as of the date
28and time of receipt or as of any later date and time specified
29by the department. The Department of State shall immediately
30issue a certificate of merger, consolidation or conversion as of

1the date and time of filing with the approved articles of
2merger, consolidation or conversion attached thereto and shall
3make and retain a copy of such certificate and articles.

4Section 1108. Effect of Merger, Consolidation or
5Conversion.--(a) As of the filing of the articles of merger,
6consolidation or conversion in the Department of State, the
7merger, consolidation or conversion shall be effective.

8(b) The certificate of merger, consolidation or conversion
9shall be conclusive evidence of the performance of all
10conditions precedent to the merger, consolidation or conversion
11and of the existence or creation of the resulting savings
12association or savings bank, except as against the Commonwealth.

13(c) When a merger or consolidation or conversion becomes
14effective, the existence of each party to the plan, except the
15resulting association or savings bank, shall cease as a separate
16entity but shall continue in, and the parties to the plan shall
17be, a single corporation which shall be the resulting savings
18association or savings bank and which shall have without further
19act or deed, all the property, rights, powers, duties and
20obligations of each party to the plan.

21(d) The articles of the resulting association or savings
22bank shall be, in the case of a merger, the same as its articles
23prior to the merger with any change stated in the articles of
24merger, or in the case of a consolidation, the provisions stated
25in the articles of consolidation.

26(e) If the resulting corporation shall be a savings
27association such association shall have the authority to engage
28only in such business and exercise only such powers as it would
29have under original incorporation under this act. If the
30resulting corporation shall be a savings bank it shall engage

1only in such business and it shall have only such powers as it
2would have if it had been originally incorporated under the
3Banking Code of 1965 as amended.

4(f) No liability of any party to the plan or of its members,
5directors, trustees or officers shall be affected, nor shall any
6lien on any property of a party to the plan be impaired, by the
7merger, consolidation or conversion. Any claim existing or
8action pending by or against any party to the plan may be
9prosecuted to judgment as if the merger, consolidation or
10conversion had not taken place or the resulting corporation may
11be substituted in its place.]

12Section 89. Section 1109 of the act, amended April 9, 1982
13(P.L.334, No.94), is repealed:

14[Section 1109. Rights of Dissenting Members.--(a) In the
15case of a mutual association, no mortgage account member shall
16have any rights of any nature with regard to proceedings for
17merger, consolidation or conversion and shall conclusively
18become a borrower of the resulting association or savings bank
19in the event of a merger, consolidation or conversion. A savings
20member who dissents from any plan of merger, consolidation or
21conversion shall have the right to have his savings paid to him
22in full together with any and all additions thereto which have
23been credited to his account by way of earnings prior to the
24effective date of the merger, consolidation or conversion within
25thirty days of the receipt of notice by the association of his
26dissent.

27(b) In the case of a permanent reserve fund stock
28association, a permanent reserve fund stockholder shall have
29only the rights given him in the plan of merger, consolidation
30or conversion.]

1Section 90. Section 1110 of the act is repealed:

2[Section 1110. Reorganization of Associations.--An
3association may reorganize under the provisions of this section
4by adopting and carrying out a plan of reorganization which
5meets the requirements of this section.

6(a) The plan which may include amendment of the articles of
7incorporation after adoption by the directors shall be submitted
8to the department for approval. The department may approve such
9plan if it deems the plan equitable and in the best interests of
10creditors and members of the association.

11(b) The plan of reorganization, if approved by the
12department, shall be submitted to the members after such notice
13as may be required by the department.

14(c) The plan shall be valid if approved by members holding
15fifty-one percent of the votes represented in person or by proxy
16at the meeting where such plan is voted upon, and by creditors
17holding at least ninety percent of the total amount of all
18liability of the association to creditors which will not be paid
19in full under the plan. Creditors who will be paid in full shall
20have no vote on approval or disapproval of the plan. A plan of
21reorganization which shall have been approved by the department
22and adopted by the members and the creditors entitled to vote
23thereon shall be binding upon all members and creditors of the
24association whether or not they voted for or consented to the
25plan of reorganization.]

26Section 91. Article XII heading of the act is repealed:

27[ARTICLE XII

28VOLUNTARY AND INVOLUNTARY DISSOLUTION;

29DISTRIBUTION OF ASSETS UPON INSOLVENCY]

30Section 92. Sections 1201 and 1202 of the act, repealed in

1part June 3, 1971 (P.L.118, No.6), are repealed:

2[Section 1201. Voluntary Dissolution Prior to Commencement
3of Business.--(a) An association which has not transacted any
4business for which a certificate of authorization is required
5under this act may propose to dissolve by a vote of two-thirds
6of the incorporators and by delivering to the department
7articles of dissolution which shall be signed and acknowledged
8by a majority of the incorporators and which shall contain:

9(1) The name of the association,

10(2) The county in which it was to have its place of
11business,

12(3) The date of its incorporation,

13(4) A statement that it has not transacted any business for
14which a certificate of authorization is required under this act,

15(5) A statement that all liabilities of the association have
16been paid or provided for,

17(6) A statement that all amounts received on account of the
18expense fund, less amounts disbursed for expenses, have been
19returned to the persons entitled thereto,

20(7) The number of incorporators entitled to vote on the
21dissolution and the number of votes for and against dissolution
22respectively.

23(b) The articles of dissolution shall be delivered to the
24department together with any applicable filing fee. If the
25department is satisfied that the association has not conducted
26any business for which a certificate of authorization is
27required under this act and if it finds that the articles of
28dissolution satisfy the requirements of this act, it shall
29deliver them with its written approval to the Department of
30State which shall file the same on the date received from the

1department. The department shall notify the association of its
2action. If the department shall disapprove the articles of
3dissolution, it shall give written notice to the association of
4its disapproval and a statement in detail of the reasons for its
5decision.

6Section 1202. Voluntary Dissolution After Commencement of
7Business.--(a) An association which has commenced business may
8elect to dissolve voluntarily upon:

9(1) Adoption by the vote required of its members under
10subsection (b) of this section of a plan of dissolution
11providing for full payment of its liabilities, and

12(2) Approval by the department of the plan of dissolution
13after application for approval thereof in a manner prescribed by
14the department.

15(b) Adoption of the plan by the members of an association
16shall require the affirmative vote of the members entitled to
17cast at least two-thirds of the votes which all members are
18entitled to cast on the plan at a meeting held upon not less
19than ten days' notice to all members.

20(c) Upon receipt of an application for approval of a plan of
21dissolution, the department shall conduct such investigation as
22it may deem necessary to determine whether:

23(1) The plan satisfies the requirements of this act,

24(2) The plan adequately protects the interest of members and
25creditors, and

26(3) Within sixty days after receipt of the application, the
27department shall approve or disapprove the application on the
28basis of its investigation and shall immediately give to the
29association written notice of its decision, and in the event of
30disapproval, a statement in detail of the reasons for its

1decision.]

2Section 93. Sections 1203, 1204, 1205, 1206 and 1207 of the
3act are repealed:

4[Section 1203. Certificate of Election for Voluntary
5Dissolution.--(a) Immediately after the adoption and approval
6of a plan of dissolution under section 1202 of this act, the
7association shall deliver to the department, together with
8applicable fees payable to the department, a certificate of
9election to dissolve which shall be signed by two of its duly
10authorized officers under its seal and which shall contain:

11(1) The name of the association,

12(2) The county of its principal place of business,

13(3) The names and addresses of its officers and directors,
14and

15(4) The number of votes entitled to be cast on the plan of
16dissolution and the number of votes cast for and against the
17plan.

18(b) If the department has approved the plan of dissolution
19and if the certificate satisfies the requirements of this act,
20it shall deliver the certificate with its written approval to
21the Department of State which, upon payment of applicable fees
22and charges, shall issue to the association the approved
23certificate of election to dissolve and shall make and retain a
24copy thereof.

25(c) Upon the issuance of an approved certificate of an
26election to dissolve, the association shall cease to carry on
27its business except insofar as may be necessary for the proper
28winding up thereof but its corporate existence shall continue
29until issuance of a certificate of dissolution under this act.

30Section 1204. Winding Up in Voluntary Dissolution

1Proceedings.--(a) The board of directors shall have full power
2to wind up and settle the affairs of the association in
3voluntary dissolution proceedings.

4(b) Within thirty days after the issuance of an approved
5certificate of election to dissolve, the association shall give
6notice of its dissolution:

7(1) By mail to each member and creditor, including a
8statement of the amount shown by the books of the association to
9be due to such member or creditor, and a demand that any claim
10for a greater amount be filed with the association before a
11specified date at least sixty days after the date of notice,

12(2) By conspicuous posting at each office of the
13association, and

14(3) By such publication as the department may prescribe.

15(c) All claims of members and creditors shall be paid
16promptly after the date specified in the notice given under
17subsection (b) (1) of this section.

18(d) Assets remaining after the performance of all
19obligations of the association under subsection (c) of this
20section shall be distributed to its members according to their
21respective rights and preferences. Partial distributions to
22members may be made prior to such time only if, and to the
23extent, approved by the department.

24(e) During the course of dissolution proceedings the
25association shall make such reports as the department may
26require and the association shall continue to be subject to the
27provisions of this act concerning examinations of associations
28until completion of the dissolution of the association.

29(f) If at any time during the course of dissolution
30proceedings the department finds that the assets of the

1association will not be sufficient to discharge its obligations,
2the department may then or at any time thereafter take
3possession of the business and property of the association and
4complete the dissolution in accordance with the provisions of
5the Department of Banking Code.

6Section 1205. Articles of Dissolution.--(a) When all the
7liabilities of the association have been discharged, and all its
8remaining assets have been disbursed to members pursuant to
9section 1204, articles of dissolution shall be signed by two
10duly authorized officers of the association under its seal and
11shall contain:

12(1) The name of the association and the post office address
13of its principal place of business,

14(2) A statement that the association has previously
15delivered a certificate of election to dissolve to the
16department, and the date on which the approved certificate was
17filed in the Department of State.

18(3) A statement that all liabilities of the association have
19been discharged, and that the remaining assets of the
20association have been distributed to its members, and

21(4) A statement that there are no suits pending against the
22association.

23(b) The articles of dissolution shall be delivered to the
24department together with any applicable filing fees. If the
25department finds that the articles satisfy the requirements of
26this act it shall deliver them with its approval to the
27Department of State.

28Section 1206. Certificate of Dissolution.--If all applicable
29fees, charges and taxes required by law have been paid, the
30receipt of articles of dissolution by the Department of State,

1with the written approval of the department, shall constitute
2filing of the articles of dissolution as of the date and time of
3receipt. The Department of State shall immediately issue to the
4association a certificate of dissolution as of the date and time
5of filing, with the approved articles of dissolution attached
6thereto, and shall make and retain a copy of such certificate
7and articles. Upon the filing of the articles of dissolution,
8the existence of the association shall cease.

9Section 1207. Involuntary Dissolution.--(a) The department
10shall issue a certificate of dissolution under its seal:

11(1) If a certificate of authorization has not been issued to
12a newly incorporated association within two years after the date
13of its incorporation or such longer time as the department may
14allow for satisfaction of conditions precedent to the issuance
15of a certificate of authorization, or

16(2) If the department shall determine, after notice to the
17association, to issue a certificate of dissolution. Said
18determination shall be made if the department finds that the
19association has not exercised any of its powers under its
20articles, for any continuous period of two years, or

21(3) If the department after having taken possession of the
22business and property of an association has completely
23liquidated its assets, or

24(4) If the department, after having taken possession of the
25business and property of an association, has surrendered to any
26corporation or person the assets of the association in order to
27permit the carrying out of a special plan of liquidation, or

28(5) If the directors of an association or the liquidating
29trustees under the Building and Loan Code of 1933, as amended,
30pursuant to a plan of voluntary dissolution, have completely

1liquidated its assets and have not filed the articles of
2dissolution pursuant to the provisions of this act.

3(b) In connection with the issuance of a certificate of
4dissolution for any of the reasons set forth in subsection (a)
5above, the department shall recite the applicable facts and
6state that the certificate of authorization of the association
7and its articles of incorporation have been forfeited by reason
8of such facts and shall file the certificate in the Department
9of State.

10(c) Upon filing of the certificate of dissolution in the
11Department of State all rights of the association under its
12certificate of authorization shall cease and its existence as an
13incorporated association shall cease.]

14Section 94. Section 1208 of the act, amended December 27,
151974 (P.L.1012, No.329) and April 9, 1982 (P.L.334, No.94), is
16repealed:

17[Section 1208. Distribution of Assets Upon Liquidation.--In
18the distribution of assets of an association which is liquidated
19or dissolved, either under this act or by any other method,
20payment shall be made of liabilities and obligations to members
21in the following order:

22(a) First, the payment of costs and expenses of
23administration of the liquidation or dissolution,

24(b) Second, the payment of claims which are given priority
25by applicable statutes and, if the assets are insufficient for
26the payment in full of all such claims in the order provided by
27such statutes, or, in the absence of contrary provisions, pro
28rata,

29(c) Third, the payment of the balance as of the date of
30dissolution or liquidation in savings accounts of all types and

1of all other creditors except those creditors who have in
2writing subordinated their claims in favor of savings accounts.
3Said payments shall be pro rata to the amount owing said
4creditor and savings accounts on a basis pro rata to the balance
5in each account.

6(d) Fourth, payment to creditors who have in writing
7subordinated their claims in favor of savings accounts.

8(e) Fifth, any excess of assets shall be distributed to
9savings accounts on a basis pro rata to the balance in each
10account as of the date of liquidation or dissolution in the case
11of a mutual association. In a permanent reserve fund
12association, the excess of assets shall be distributed pro rata
13to the reserve fund stockholders.]

14Section 95. Article XIII heading of the act is repealed:

15[ARTICLE XIII

16FOREIGN AND FEDERAL ASSOCIATIONS]

17Section 96. Section 1301 of the act, amended December 21,
181988 (P.L.1427, No.174), is repealed:

19[Section 1301. Foreign Corporations.--(a) Except as
20provided in section 114, foreign corporations shall not transact
21the business of an association within this Commonwealth, nor
22maintain an office within this Commonwealth for the purpose of
23transacting such business. It shall be unlawful for any person
24to engage in the business of soliciting or receiving within this
25Commonwealth subscriptions to the shares or savings accounts of
26such corporations or payments therefor, or of granting loans
27within this Commonwealth on behalf of such corporations, or of
28soliciting applications therefor, or of receiving within this
29Commonwealth on behalf of such corporations, interest, premiums,
30fees or payments of any kind or of transacting business in any

1manner within this Commonwealth on behalf of such corporation.
2Nothing in this section shall prohibit a bona fide mortgage or
3loan subsidiary of a foreign association from conducting its
4business in this Commonwealth.

5(b) A violation of this section shall be subject to the
6penalty provisions of this act.]

7Section 97. Section 1302 of the act is repealed:

8[Section 1302. Federal Associations.--Notwithstanding any
9other provision of this act, unless Federal laws or regulations
10provide otherwise, a Federal savings and loan association,
11incorporated pursuant to the Home Owner's Loan Act of 1933, as
12now or hereafter amended, and whose principal office is in
13Pennsylvania, together with the members thereof, shall possess
14all of the rights, powers, privileges, benefits, immunities and
15exemptions that are now or hereafter provided in this code or by
16the laws of this Commonwealth for associations organized under
17the laws of this Commonwealth and for the members and savings
18account holders thereof. This provision is additional and
19supplemental to any provision which by specific reference is
20applicable to Federal savings and loan associations and the
21members thereof.]

22Section 98. Article XIV heading of the act, amended December
2321, 1988 (P.L.1427, No.174), is repealed:

24[ARTICLE XIV

25PROVISIONS APPLICABLE TO DEPARTMENT OF BANKING]

26Section 99. Section 1401 of the act, amended December 21,
271998 (P.L.1002, No.132), is repealed:

28[Section 1401. Examinations and Reports.--(a) The
29department shall examine all associations at least once every
30two calendar years and may examine any association more

1frequently and at any time it deems such action necessary or
2desirable for protection of members or creditors. The
3examination shall include a review of the accounts, records and
4affairs of the association, its compliance with law and such
5other matters as the department may determine. For this purpose
6the department may examine a person which is performing services
7for an association.

8(b) In the case of an association whose savings are insured
9by the Federal Savings and Loan Insurance Corporation the
10department may accept, in lieu of any examination required by
11this section and in lieu of any report required by the
12Department of Banking Code, examinations and reports made by
13examiners for the Federal Savings and Loan Insurance
14Corporation, the Federal Home Loan Bank Board, or a Federal Home
15Loan Bank.

16(c) Except as modified by the provisions of this section,
17the provisions of the Department of Banking Code governing the
18examinations and reports shall continue to apply to
19associations.]

20Section 100. Section 1402 of the act, amended December 21,
211988 (P.L.1427, No.174), is repealed:

22[Section 1402. Relationship of Savings Associations and
23Their Personnel with Officials and Employes of the Department.--
24(a) Except as provided in subsection (c) of this section a
25savings association or any director, officer, employe or
26attorney thereof shall not grant or give to the Secretary of
27Banking, any official or employe of the department, any deputy
28or any employe of the Secretary of Banking as receiver, any sum
29of money or any property as a gift, loan or otherwise, directly
30or indirectly--subject to the penalty provisions of this act.

1(b) Neither the Secretary of Banking, nor any official or
2employe of the department shall hold any office or position in a
3savings association nor exercise any right to vote on an
4association matter by reason of membership in such association--
5subject to the penalty provisions of this act.

6(c) The prohibitions of subsections (a) and (b) of this
7section shall not apply to either:

8(1) A loan subject to the provisions of this act secured by
9a lien on the home of the Secretary of Banking, an official or
10employe of the department, or

11(2) A savings account with an association except that an
12examiner assigned to the examination of savings associations
13shall not have a savings account in any mutual association.]

14Section 101. Section 1404 of the act, amended July 9, 1992
15(P.L.414, No.89), is repealed:

16[Section 1404. Orders by Department; Hearings.--(a) The
17department may by written order under seal of the department
18direct an association to discontinue any violation of law or
19regulation or any unsafe or unsound business practice within
20such period as shall be specified in the order.

21(b) If any director, officer, attorney or employe continues
22to violate the law or conduct the business of an association in
23an unsafe or unsound manner after having been warned by the
24department to discontinue such violations of law or such unsafe
25or unsound business practices, the department may issue a
26written order under seal of the department directing such
27director, officer, attorney or employe to appear on the date
28fixed in such order before the department and show cause why he
29should not be removed from his office or position.

30(c) A copy of such order shall be sent to the association of

1which such person is a director, officer, attorney or employe.

2(d) On the day fixed in the department's order, such
3director, officer, attorney or employe shall be heard in person
4or by counsel. The hearing shall be closed to the public unless
5the department determines that the public interest requires that
6the hearing be open to the public.

7(e) If the director, officer, attorney or employe does not
8appear on the day fixed in the department's order, or if, after
9hearing, the department determines that such director, officer,
10attorney or employe is guilty of a violation of law or an unsafe
11or unsound business practice and should be removed from his
12office or position, the department shall, within sixty days of
13such hearing, issue an order directing the association to remove
14such person from his office or position and declare such office
15or position vacant. A copy of such order shall be sent to the
16director, officer, attorney or employe so removed. The
17department shall specify in its order the date upon which any
18such removal and declaration of vacancy shall become effective.

19(f) If the person ordered by the department to appear is a
20director, officer, attorney or employe of an association which
21is a member of the Federal Home Loan Bank System or is insured
22by the Federal Savings and Loan Insurance Corporation, the
23department may advise the Federal Home Loan Bank or the Federal
24Savings and Loan Insurance Corporation of its order directing
25the appearance of such person before the department and of the
26decision of the department.

27(g) In connection with any hearing or investigation, the
28department shall have power to issue subpoenas requiring the
29attendance of or the production of pertinent books and papers by
30any person, including the officers, directors, agents, employes

1or members of any association. The department may, upon
2application of the director, officer, attorney or employe to be
3heard, subpoena such witnesses as are set forth in such
4application. The department shall have the power to question
5such witnesses under oath or affirmation and to examine such
6books and papers.

7(h) Any witness who refuses to obey a subpoena issued under
8this section or who refuses to be sworn or affirmed or to
9testify or who is guilty of any contempt after summons to appear
10may be punished as for contempt of court, and for this purpose
11an application may be made to any court of common pleas within
12whose territorial jurisdiction the offense was committed, for
13which purpose such court is hereby given jurisdiction.

14(i) Except as herein otherwise specifically provided, the
15proceedings of the department and its decisions may be published
16at the discretion of the department.

17(j) A director, officer, attorney or employe who is removed
18from his office or position as provided in this article and as
19provided in section 506 shall thereafter be disqualified from
20acting as a director, officer, attorney or employe of any
21association or any insured depository institution in this
22Commonwealth for such period as the department shall prescribe.]

23Section 102. Article XV heading of the act is repealed:

24[ARTICLE XV

25PENALTIES AND CRIMINAL PROVISIONS]

26Section 103. Sections 1501, 1502, 1503, 1504, 1505, 1506,
271507, 1508, 1509 and 1510 of the act are repealed:

28[Section 1501. False or Misleading Statements in
29Application.--Any person who shall knowingly make any false or
30misleading statement in the application for a mortgage loan or

1any other type of loan or in a request for advance or loan of
2funds from an association or shall knowingly conceal any
3material fact or facts in such application or who shall falsify
4or mutilate any application for any loan after it has been
5signed and delivered to the association, or who shall abstract
6any such application from the records of the association, or who
7shall cause or induce any other person to make any such
8statement or conceal any such fact or facts, falsify, mutilate
9or abstract any such application in the manner hereinbefore
10described shall be guilty of a misdemeanor and shall upon
11conviction thereof, be subject to imprisonment for a period not
12exceeding three years or a fine not exceeding one thousand
13dollars ($1,000) or both.

14Section 1502. Doing Business by a Foreign Corporation.--Any
15individual who shall violate the provisions of section 1301 of
16this act shall be guilty of a misdemeanor and shall upon
17conviction thereof, be subject to imprisonment for a period not
18exceeding one year or a fine not exceeding one thousand dollars
19($1,000) or both. He shall also be subject to a further fine
20equal to any moneys received by him within this Commonwealth in
21violation of said section. The corporation which such individual
22represents shall be guilty of a misdemeanor and upon conviction
23thereof shall be subject to a fine of five thousand dollars
24($5,000). Such corporation shall be subject to a further fine
25equal to the amount of any moneys received by such corporation
26or its agent in violation of this section.

27Section 1503. Perjury.--Anyone who shall wilfully and
28corruptly make a false statement under any oath or affirmation
29provided for in this act, or in any document required to be
30executed by this act or anyone who shall by means procure or

1suborn any other person to do so, shall be guilty of the crime
2of perjury and upon conviction thereof, shall be subject to the
3same punishment as is or may be provided by law for perjury.

4Section 1504. Acceptance of Fee for Procuring Loan.--Any
5director, officer, attorney, or employe of an association who
6knowingly violates the provision of subsection (a) (1) of
7section 510 of this act shall be guilty of a misdemeanor, and
8shall, upon conviction thereof, be subject to a fine not
9exceeding a sum equal to three times the amount of the value of
10the property which he received as such fee, commission or gift.
11In addition he shall be disqualified from acting as an officer,
12director, attorney or employe of any association within this
13Commonwealth for a period of five years after the date of such
14conviction.

15Section 1505. Dealings Between an Association and Its
16Directors, Officers, Employes and Attorneys.--Any officer,
17director, attorney or employe of an association who knowingly
18violates the provisions of either subsection (a) (2) or
19subsection (a) (3) of section 510 shall be guilty of a
20misdemeanor and shall upon conviction thereof, be subject to
21imprisonment not exceeding one year, or a fine not exceeding one
22thousand dollars ($1,000), or both. He shall also be subject to
23a further fine equal to any profit which he shall have made upon
24the transaction.

25Section 1506. Failure to Keep Proper Accounts.--Any
26director, officer or employe of an association who knowingly
27violates the provisions of section 110 of this act shall be
28guilty of a misdemeanor and shall upon conviction thereof be
29subject to imprisonment not exceeding one year or a fine not
30exceeding one thousand dollars ($1,000), or both.

1Section 1507. Repledging of Collateral.--Any officer,
2director or employe of an association who knowingly violates
3section 112 of this act shall be guilty of a misdemeanor and
4shall upon conviction thereof be subject to imprisonment not
5exceeding one year or a fine not exceeding one thousand dollars
6($1,000), or both.

7Section 1508. Prohibition of Promoter's Fees.--Any
8incorporator, officer, director or employe who knowingly
9violates section 202 (a) of this act shall be guilty of a
10misdemeanor and shall upon conviction thereof be subject to
11imprisonment not exceeding one year or a fine not exceeding one
12thousand dollars ($1,000), or both.

13Section 1509. Transacting Business before Certificate of
14Authorization Issued.--Any officer or director of an association
15who knowingly violates section 209 (a) of this act shall be
16guilty of a misdemeanor and shall upon conviction thereof be
17subject to imprisonment not exceeding one year or a fine not
18exceeding one thousand dollars ($1,000), or both.

19Section 1510. Relationship of Savings Associations and Their
20Personnel with Officials and Employes of the Department.--Any
21director, officer, attorney or employe of an association, or the
22Secretary of Banking, or any employe, or any official of the
23department who knowingly violates the provisions of either
24subsection (a) or subsection (b) of section 1402 shall be guilty
25of a misdemeanor and shall upon conviction thereof, be subject
26to imprisonment not exceeding one year or a fine not exceeding
27one thousand dollars ($1,000), or both.]

28Section 104. Article XVI heading of the act is repealed:

29[ARTICLE XVI

30EFFECTIVE DATE AND REPEALERS]

1Section 105. Section 1601 of the act is repealed:

2[Section 1601. Effective Date.--This act shall take effect
3in one hundred eighty days.]

4Section 106. Section 1602 of the act, amended December 21,
51998 (P.L.1002, No.132), is repealed:

6[Section 1602. Specific Repeals.--(a) The following acts
7and all amendments thereof are hereby repealed absolutely:

8(1) The act of May 5, 1933 (P.L.457), known as the "Building
9and Loan Code."

10(2) The act of June 24, 1939 (P.L.746), entitled "An act
11authorizing Federal savings and loan associations to issue share
12accounts in the name of certain minors and in the joint names of
13two or more persons, and validating the acquittances of such
14minors and validating the acquittances of either person in a
15joint account, under certain conditions; and outlining the
16procedure for the payment of share accounts issued in the name
17of a trustee following the death of the trustee."

18(3) The act of April 6, 1979 (P.L.17, No.5), referred to as
19the Pennsylvania Savings Association Insurance Corporation Act.

20(b) The following parts of acts are hereby repealed to the
21extent specified:

22(1) Sections 301, 401A, 402B, 501A, 501B, 501C, 503A, 503C
23and 1011B of the act of May 15, 1933 (P.L.565), known as the
24"Department of Banking Code," as applicable to savings
25associations, savings and loan associations and building and
26loan associations.

27(2) Section 504B of the act of May 15, 1933 (P.L.565,
28No.111), known as the "Department of Banking Code," is repealed
29insofar as it applies to nonfederally insured savings
30associations.

1(3) Section 4 of the act of April 6, 1979 (P.L.17, No.5),
2referred to as the Pennsylvania Savings Association Insurance
3Corporation Act, is repealed.]

4Section 107. Sections 1603 and 1604 of the act are repealed:

5[Section 1603. General Repeal.--All other acts and parts of
6acts inconsistent with the provisions of this act are hereby
7repealed.

8Section 1604. Transition Provisions.--(a) Transactions and
9proceedings commenced under or pursuant to statutes repealed by
10this act shall be terminated, completed or enforced pursuant to
11the provisions of such statutes which for such purpose shall
12remain in full force and effect as to such transactions and
13proceedings.

14(b) Any agreement, transaction or relationship which was
15valid immediately prior to the effective date of this act and
16which continues after the effective date of this act shall
17remain valid although not in compliance with the provisions of
18this act, except that any affirmative action required by this
19act which may be legally taken in connection with such
20agreement, transaction or relationship shall be taken within
21such reasonable time after the effective date of this act as may
22be fixed by the department unless the requirement of such action
23would impair any vested right.]

24Section 108. (a) An association as defined in section 102
25of the act existing on the effective date of this section shall
26do one of the following within six months of the effective date
27of this section:

28(1) file an application with the Department of Banking 
<-29and Securities to convert to a savings bank pursuant to
30section 1609(a)(v)(C) of the act of November 30, 1965

1(P.L.847, No.356), known as the Banking Code of 1965;

2(2) file a notice with the Department of Banking <-and 
3Securities that the association has filed an application with
4the Office of the Comptroller of the Currency to convert to a
5Federal savings association; or

6(3) be a party to a merger application filed with the
7Department of Banking <-and Securities or the Office of the
8Comptroller of the Currency whereby the association will be
9merged with an existing institution regulated by the
10Department of Banking <-and Securities or the Office of the
11Comptroller of the Currency.

12(b) The Department of Banking <-and Securities shall not
13charge a fee for the application for conversion required by
14subsection (a)(1); however, the application for conversion shall
15be accompanied by any applicable filing fees due to the
16Department of State.

17Section 109. (a) Transactions and proceedings commenced
18under or pursuant to the statute repealed by this act shall be
19terminated, completed or enforced pursuant to the provisions of
20such statute, which for such purpose shall remain in full force
21and effect as to those transactions and proceedings.

22(b) Any agreement, transaction or relationship that was
23valid immediately prior to the effective date of this section
24and that continues after the effective date of this section
25shall remain valid although not in compliance with the
26provisions of this act, except that any affirmative action
27required by this act which may be legally taken in connection
28with such agreement, transaction or relationship shall be taken
29within such reasonable time after the effective date of this
30section as may be fixed by the Department of Banking and<- 

1Securities unless the requirement of such action would impair
2any vested right.

3Section 110. This act shall take effect as follows:

4(1) Section 108 of this act shall take effect
5immediately.

6(2) This section shall take effect immediately.

7(3) The remainder of this act shall take effect in one
8year.