PRIOR PRINTER'S NO. 1850 PRINTER'S NO. 1978
No. 1458 Session of 1978
INTRODUCED BY ZEMPRELLI, SCHAEFER, HANKINS, DUFFIELD, SCANLON, DWYER, KUSSE, ANDREWS, ROMANELLI AND LYNCH, APRIL 19, 1978
AS AMENDED ON THIRD CONSIDERATION, JUNE 13, 1978
AN ACT 1 Amending Title 15 (Corporations and Unincorporated Associations) 2 of the Pennsylvania Consolidated Statutes, establishing the 3 Pennsylvania Savings Association Insurance Corporation. 4 The General Assembly of the Commonwealth of Pennsylvania 5 hereby enacts as follows: 6 Section 1. Part III of Title 15, act of November 25, 1970 7 (P.L.707, No.230), known as the Pennsylvania Consolidated 8 Statutes, is amended by adding an article to read: 9 PART III 10 CORPORATIONS NOT-FOR-PROFIT 11 * * * 12 ARTICLE D 13 PENNSYLVANIA SAVINGS ASSOCIATION INSURANCE CORPORATION 14 Sec. 15 8151. Definitions. 16 8152. Creation; application of General Corporation Law; 17 adoption, application and filing of bylaws; rules and 18 regulations.
1 8153. Purposes and powers; accumulated earnings. 2 8154. Board of directors. 3 8155. Qualifications for membership in corporation; withdrawal. 4 8156. Exchange of information. 5 8157. Faith or credit of State not pledged. 6 8158. Bylaws, rules and regulations generally. 7 8159. Corporation or member associations not subject to 8 insurance laws. 9 8160. Liability of officer or director upon contracts. 10 8161. Perpetual life. 11 8162. Exemption from taxation. 12 8163. Application for membership. 13 8164. Filing certificate of commencement of business. 14 8165. Termination of existence. 15 § 8151. Definitions. 16 The following words and phrases when used in this part shall 17 have, unless the context clearly indicates otherwise, the 18 meanings given to them in this section: 19 "Association." Any building, savings, savings and loan or 20 homestead association organized under the laws of this 21 Commonwealth, Federal Savings and Loan Association Incorporated 22 pursuant to the Federal Act of June 13, 1933, known as the 23 "Homeowners' Loan Act of 1933," and further, each such Federal 24 association shall be required to have its principal offices in 25 this Commonwealth and 75% of its total assets invested in this 26 Commonwealth. 27 "Corporation." The Pennsylvania Savings Association 28 Insurance Corporation, hereby created. 29 "Directors." The Board of Directors of the Pennsylvania 30 Savings Association Insurance Corporation. 19780S1458B1978 - 2 -
1 "Insured institution." An association whose accounts are 2 insured by the Federal Savings and Loan Insurance Corporation. 3 "Savings account." Any sum of money deposited with an 4 association in exchange for a promise to pay interest to the 5 depositor. 6 § 8152. Creation; application of General Corporation Law; 7 adoption, application and filing of bylaws; rules and 8 regulations. 9 A nonstock, nonprofit corporation is hereby created, which 10 shall be known as the Pennsylvania Savings Association Insurance 11 Corporation and the members of which shall be certain eligible 12 savings and loan associations of this Commonwealth. Except as 13 otherwise provided in this act, the corporation possesses all 14 the powers, privileges and immunities which now are or hereafter 15 may be conferred on corporations by the general corporation law 16 applicable to corporations organized thereunder. The board of 17 directors may adopt and promulgate bylaws, rules and regulations 18 which conform to the reasonable intent and purposes of this act. 19 The rules and regulations apply to members of the corporation 20 and to associations applying for membership therein. The bylaw, 21 rules and regulations so adopted shall be filed with the 22 Department of State. 23 § 8153. Purposes and powers; accumulated earnings. 24 (a) Purposes.--The purposes of the corporation are to 25 promote the elasticity and flexibility of the resources of 26 member associations, to provide for the liquidity of such 27 associations through a central reserve fund, and to insure the 28 savings accounts in such associations. 29 (b) Powers.--In furtherance of said purposes the corporation 30 has the following powers: 19780S1458B1978 - 3 -
1 (1) To provide for the liquidity of member associations 2 through the creation of a central reserve fund for the 3 purpose of making loans to member associations. The central 4 reserve fund shall not be subject to payment of insurance 5 claims against the corporation by member associations or 6 their account holders or otherwise. 7 (2) To insure the savings accounts in member 8 associations through the creation of a central insurance 9 fund. 10 (3) To borrow money and otherwise incur indebtedness for 11 any of its purposes; to issue its bonds, debentures, notes or 12 other evidences of indebtedness, whether secured or 13 unsecured, therefor; and to secure the same by mortgage, 14 pledge, deed of trust, or other lien on its property, rights, 15 and privileges of every kind and nature or any part thereof. 16 (4) To lend money to, and to guarantee, endorse, or act 17 as surety on the bonds, notes, contracts, or other 18 obligations of or otherwise assist financially, any member 19 association; and to establish and regulate the terms and 20 conditions with respect to any such loans or financial 21 assistance and the charges for interest and service connected 22 therewith; 23 (5) To purchase, receive, hold, lease, or otherwise 24 acquire and to sell, convey, mortgage, lease, pledge or 25 otherwise dispose of, upon such terms and conditions as its 26 board of directors may deem advisable, real and personal 27 property, together with such rights and privileges as may be 28 incidental and appurtenant thereto and the use thereof, 29 including, but not restricted to, any real or personal 30 property acquired by the corporation from time to time in the 19780S1458B1978 - 4 -
1 satisfaction of debts or enforcement of obligations. 2 (6) To invest any of its funds, upon proper 3 authorization thereof by the board of directors, in any of 4 the following: 5 (i) Cash or deposits in checking or savings 6 accounts, or under certificates of deposit in national or 7 State banking institutions, to the extent that such 8 accounts are insured by the Federal Deposit Insurance 9 Corporation. 10 (ii) Savings and loan association savings accounts 11 to the extent that such accounts are insured by the 12 Federal Savings and Loan Insurance Corporation. 13 (iii) Interest bearing bonds, notes, certificates of 14 indebtedness bills, or other obligations of the United 15 States, any state or the District of Columbia, or of any 16 commission, instrumentality, agency, authority or 17 political subdivision thereof having legal authority to 18 issue the same. 19 (iv) Interest bearing bonds, notes or other interest 20 bearing obligations of any corporation created or 21 existing under the laws of the United States, any state, 22 or the District of Columbia. 23 (v) Dividend paying stocks or shares having readily 24 marketable values of any corporation created or existing 25 under the laws of the United States or of any state, may 26 not invest more than 10% of its total assets in such 27 stocks, nor more than 3% of its total assets in the stock 28 of any one corporation. 29 (vi) Loans secured by first mortgages or deeds of 30 trust on otherwise unencumbered fee simple real estate or 19780S1458B1978 - 5 -
1 improved leasehold property in this Commonwealth, 2 provided said loans are purchased from a member 3 association. 4 (vii) Ground rents in this Commonwealth. 5 (viii) Collateral loans secured by pledge of any 6 security hereinabove named. 7 (ix) Direct loans to member associations under the 8 terms and conditions established therefor by the board of 9 directors. 10 (7) To exercise all other corporate powers granted by 11 general law to corporations in this Commonwealth which are 12 not inconsistent herewith and which are necessary or 13 appropriate to the purposes hereof. 14 (c) Accumulated earnings.--The earnings shall be accumulated 15 by the corporation, and no part thereof shall be returned to the 16 member association. The provisions of this subsection shall not 17 prohibit the payment of interest by the corporation to member 18 associations which have made deposits, loans or advances to the 19 central reserve fund. 20 § 8154. Board of directors. 21 (a) Number of directors; initial appointment; election by 22 member associations; qualifications and terms of elective 23 directors.--All of the corporate powers of the corporation shall 24 be exercised by a board of directors, composed of 11 members who 25 initially shall be appointed by the Governor within 60 days of 26 the effective date of this act, with the advice of the Secretary 27 of Banking, and who shall serve until the first annual meeting. 28 After a minimum of 25 associations have become members of the 29 corporation, the first annual meeting of the corporation shall 30 be held, and the member associations of the corporation shall 19780S1458B1978 - 6 -
1 elect eight directors, each of whom shall be a registered voter 2 of the Commonwealth of Pennsylvania and shall reside therein. Of 3 the directors elected at the first annual meeting, three shall 4 be elected for terms of two years each, three shall be elected 5 for terms of three years each, and two shall be elected for 6 terms of four years each; and thereafter all terms shall be for 7 four years each. 8 (b) Appointment by Governor; terms and qualifications of 9 appointive directors.--In addition to the eight directors 10 elected by the member associations as provided in subsection 11 (a), the Governor shall, with the advice of the Secretary of 12 Banking, appoint three directors of the corporation for a term 13 of four years, whose terms shall commence on the date of the 14 first annual meeting of the corporation; and thereafter the 15 Governor, with the advice of the Secretary of Banking, shall 16 appoint directors from time to time to fill these offices of 17 director whenever they become vacant. Any director so appointed 18 shall be a registered voter of the Commonwealth of Pennsylvania 19 who resides in Pennsylvania. 20 (c) Vacancies.--If any vacancy occurs in the membership of 21 any director elected by the members of the corporation, through 22 death, resignation, or otherwise, the remaining directors shall 23 within 60 days elect a person to fill the vacancy of the 24 unexpired term. Any vacancy occurring in the term of director 25 appointed by the Governor shall be filled by the Governor within 26 60 days, with the advice of the Secretary of Banking, for the 27 unexpired term. Upon the expiration of the term of any director, 28 he shall continue as such until his successor has been elected 29 or appointed and has qualified. 30 (d) Chairman; adoption of bylaws, rules and regulations; 19780S1458B1978 - 7 -
1 appointment of officers and employees.--The board of directors 2 shall elect one of its members as chairman of such board, shall 3 adopt bylaws, rules and regulations for the corporation and may 4 appoint such officers and employees as it deems advisable. 5 (e) Quorum.--Six members of the board of directors are a 6 quorum at any meeting thereof. 7 (f) Voting.--In the election of directors and in voting on 8 any other matter legally to come before a meeting of the 9 corporation, each member association of the corporation has one 10 vote, to be cast by a delegate authorized to act by that 11 association. A delegate may not vote on behalf of more than one 12 member association. A majority of the votes so cast shall elect 13 directors or determine any question put to a vote. 14 (g) Service as director or officer of member association.-- 15 Not more than three directors of the corporation, at any one 16 time, may be directors or officers of member associations which 17 are insured institutions of the Federal Savings and Loan 18 Insurance Corporation. If at any time a director of this 19 corporation is also a director or officer of an association, and 20 said association becomes an insured institution of the Federal 21 Savings and Loan Insurance Corporation, and such occurrence 22 increases the number of directors, of this corporation, allowed 23 from associations which are insured institutions of the Federal 24 Savings and Loan Insurance Corporation to more than three, the 25 term of such director shall become vacant, and the vacancy shall 26 be filled as provided in subsection (c). 27 (h) Compensation.--The directors of the corporation may 28 receive such reasonable compensation as may be determined by the 29 board of directors. 30 (i) Surety bonds of officers and employees.--The directors 19780S1458B1978 - 8 -
1 of the corporation shall fix the amount of the surety bonds of 2 the officers and employees of the corporation conditioned upon 3 the faithful performance of their duties, as provided in the 4 bylaws of the corporation. 5 § 8155. Qualifications for membership in corporation; 6 withdrawal. 7 The membership of the corporation consists of those 8 associations the quality and soundness of whose financial 9 affairs, solvency, management, and directorship have been 10 certified to the corporation in an expeditious manner, as 11 approved for insurance of savings accounts, by the Secretary of 12 Banking and which have thereupon filed an application for 13 membership accepted by the board of directors, which acceptance 14 shall not be denied except for good cause shown regarding the 15 quality and soundness of their financial affairs, solvency, 16 management or directorship. Every savings and loan association 17 of this Commonwealth may become a member of the corporation and 18 may invest in and pay such assessments, premiums and other 19 charges as may be required for participation in the corporation. 20 Membership in the corporation is for the life of the 21 corporation, subject to the bylaws, rules and regulations of the 22 corporation. Any member may withdraw from the corporation upon 23 written notice given one year in advance of the intended date of 24 withdrawal and upon complying with the bylaws, rules and 25 regulations of the corporation. 26 § 8156. Exchange of information. 27 The laws of this Commonwealth, including but not limited to 28 the act of May 15, 1933 (P.L.565, No.111), known as the 29 "Department of Banking Code," shall be construed and applied so 30 as not to prevent an exchange of information relating to 19780S1458B1978 - 9 -
1 associations and their business, between the Secretary of 2 Banking and representatives of the corporation. 3 § 8157. Faith or credit of State not pledged. 4 Under no circumstances is the faith or credit of the 5 Commonwealth of Pennsylvania pledged herein. 6 § 8158. Bylaws, rules and regulations generally. 7 Within 60 days of its appointment and before the acceptance 8 of the membership of any associations, the board of directors 9 shall promulgate such bylaws, rules and regulations as may be 10 necessary and proper to carry out the provisions hereof and as 11 are not inconsistent herewith. Thereafter, the bylaws, rules and 12 regulations so adopted may be amended or revoked by the board of 13 directors and will become effective upon their adoption. As one <-- 14 of such SUCH rules and regulations the board of directors from <-- 15 time to time shall establish a limit on the amount of insurance 16 which may be provided for each separate savings account of an 17 association; and this limit may not exceed by more than the sum <-- 18 of $10,000, and shall not be less than the amount of prevailing <-- 19 insurance available from the Federal Savings and Loan Insurance 20 Corporation or its successor instrumentality from time to time. 21 § 8159. Corporation or member associations not subject to 22 insurance laws. 23 Neither the corporation, the member associations, nor those 24 persons owning savings accounts therein are subject to the 25 provisions of any Commonwealth laws, concerning insurance, by 26 reason of participation herein. 27 § 8160. Liability of officer or director upon contracts. 28 No officer or director of the corporation, whether appointed, 29 or elected, is personally liable upon any of its contracts 30 legally entered into on behalf of the corporation unless the 19780S1458B1978 - 10 -
1 same by its terms shall expressly obligate him or them. 2 § 8161. Perpetual life. 3 The life of the corporation is perpetual. 4 § 8162. Exemption from taxation. 5 The corporation is exempt from all special and ordinary taxes 6 and from documentary stamp and transfer taxes imposed by this 7 Commonwealth or any political subdivision thereof. 8 § 8163. Application for membership. 9 All applications from associations for membership received by 10 the corporation prior to appointment and organization of the 11 board of directors, shall be referred to the Secretary of 12 Banking. The Secretary of Banking shall examine the affairs of 13 all such applicants and as a result thereof if he finds the 14 applicants to meet the qualifications for membership in the 15 corporation set forth herein under section 8155 (relating to 16 qualifications for membership in corporation; withdrawal), he 17 shall so certify them. The corporation shall not extend the 18 benefits to be accorded to member associations to any applicant 19 until: 20 (1) It has received the report and recommendation as 21 provided herein from the Secretary of Banking as to each such 22 application so filed prior to appointment and organization of 23 the board of directors and has acted thereon; and 24 (2) It has accepted for membership a minimum of 25 25 associations, having savings accounts in the aggregate total 26 of at least $25,000,000. 27 § 8164. Filing certificate of commencement of business. 28 After the first meeting of the board of directors, a 29 certificate shall be filed by the board of directors with the 30 Department of State certifying that the corporation has 19780S1458B1978 - 11 -
1 commenced business as provided herein. Such certificate shall be 2 conclusive evidence that business was begun. 3 § 8165. Termination of existence. 4 If the corporation fails to insure savings accounts by 5 January 1, 1981, its existence terminates at that time without 6 further action by the General Assembly and the Governor of 7 Pennsylvania, the provisions of this act then are null and void. 8 Section 2. This act shall take effect in 60 days. D10L7RLC/19780S1458B1978 - 12 -