NORTH CAROLINA GENERAL ASSEMBLY

1967 SESSION

 

 

CHAPTER 1091

HOUSE BILL 1167

 

 

AN ACT TO AMEND CHAPTER 54 OF THE GENERAL STATUTES RELATING TO BUILDING AND LOAN, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS SO AS TO AUTHORIZE SUCH INSTITUTIONS TO FORM A MUTUAL DEPOSIT GUARANTY ASSOCIATION.

 

The General Assembly of North Carolina do enact:

 

Section 1. Chapter 54 of the General Statutes is hereby amended by adding a new Article immediately following Article 7, to be designated as Article 7A, and to read as follows:

"ARTICLE 7A

"Mutual Deposit Guaranty Associations.

"G.S. 54-44.1.  Definitions. As used in this Article,

(1)        'Institution' means a building and loan association, a savings and loan association or a credit union organized pursuant to Article 1 of Subchapter I and Article 10, Subchapter III of this Chapter.

(2)        'Guaranty association' means a mutual deposit guaranty association organized pursuant to this Article.

(3)        'Commissioner' means Commissioner of Insurance of North Carolina.

"G.S. 54-44.2.  Organization of a Mutual Deposit Guaranty Association. Any number of institutions, not less than 10, may become incorporated as a mutual deposit guaranty association without capital stock subject to the limitations prescribed in this Article.

"Articles of incorporation of a guaranty association shall be filed in the office of the Secretary of State. The Secretary of State shall, upon receipt of such articles, transmit a copy of them to the Commissioner and shall not record them until authorized to do so by the Commissioner.

"G.S. 54-44.3.  Examination and Certificate by Commissioner. Upon receipt from the Secretary of State of a copy of the Articles of incorporation of a proposed guaranty association, the Commissioner shall at once examine into all the facts connected with the formation of such proposed corporation. In the event such articles of incorporation are correct in form and substance and the examination shows that such corporation, if formed, would be entitled to commence the business of a guaranty association, the Commissioner shall so certify to the Secretary of State.

"The Commissioner may refuse to make such certification if upon examination he has reason to believe the proposed corporation is to be formed for any business other than assuring the liquidity of member institutions and guaranteeing deposits therein, if he has reason to believe that the character and general fitness of the incorporators are not such as to command the confidence of the general public or if the best interests of the public will not be promoted by its establishment.

"G.S. 54-44.4.  Recording of Articles of Incorporation, Certified Copies. Upon receipt of the certificate provided for in Section 54-44.3, the Secretary of State shall record the articles of incorporation of such guaranty association and furnish a certified copy thereof to the incorporators and to the Commissioner. Upon such recordation, such association shall be deemed a corporation. All papers thereafter filed in the office of the Secretary of State relating to such corporation shall be recorded as provided by law and a certified copy forwarded to the Commissioner.

"G.S. 54-44.5.  Proposed Amendments Transmitted to Commissioner. When any proposed amendments to the articles of incorporation of a guaranty association are filed in the office of the Secretary of State, the Secretary of State shall transmit a copy thereof to the Commissioner and shall not record such amendments until authorized to do so by the Commissioner.

"G.S. 54-44.6.  Examination and Certificate of Amendments. Upon receipt from the Secretary of State of a copy of proposed amendments to the articles of incorporation of a guaranty association, the Commissioner shall at once examine the proposed amendments to determine their effect on the operation of the guaranty association.

"In the event such proposed amendments are correct in form and substance and the examination shows that if adopted they would not change the character or principal business of the guaranty association, the Commissioner shall so certify to the Secretary of State.

"The Commissioner may refuse to make such certification if upon examination he has reason to believe the proposed amendments would change the character of the business of the guaranty association or the best interests of the public will not be promoted by their adoption.

"G.S. 54-44.7.  Recording of Amendments; Certified Copies. Upon receipt of the certificate provided for in G.S. 54-44.6, the Secretary of State shall record the amendments to the articles of incorporation and furnish a certified copy thereof to the corporation and to the Commissioner.

"G. S. 54-44.8.  Powers of Associations. A guaranty association incorporated in accordance with the provisions of this Article may:

(1)        Assure the liquidity of a member institution;

(2)        Guarantee the free shares or deposits in a member institution;

(3)        Loan money to a member institution for the purpose of assuring its liquidity and deposits therein;

(4)        Buy any assets owned by a member institution for the purpose of assuring its liquidity and deposits therein;

(5)        Invest any of its funds in:

a.         Bonds or interest bearing obligations of the United States or for which the faith and credit of the United States are pledged for the payment of principal and interest;

b.         Bonds or interest bearing obligations of this State;

c.         Farm loan bonds issued under the 'Federal Farm Loan Act' and amendments thereto;

d.         Notes, debentures, and bonds of the federal home loan bank issued under the 'Federal Home Loan Bank Act' and any amendments thereto;

e.         Bonds or other securities issued under the 'Home Owners Loan Act of 1933' and any amendments thereto;

f.          Securities acceptable to the United States to secure government deposits in national banks;

g.         Certificates of deposit of any financial institution that is subject to examination and supervision by the United States or by this State.

(6)        Issue its capital notes or debentures to member institutions, provided the holders of such capital notes or debentures shall not be individually responsible as such holders for any debts, contracts, or engagements of the guaranty association issuing such notes or debentures;

(7)        Borrow money;

(8)        Exercise any corporate power or powers not inconsistent with, and which may be necessary or convenient to, the accomplishment of its purposes of assuring liquidity of member institutions and guaranteeing deposits therein.

"G.S. 54-44.9.  Filing of Semiannual Financial Reports. Each guaranty association shall on the thirtieth day of June and the thirty-first day of December of each year, or within 40 days thereafter, file with the Commissioner a report for the preceding half year, showing its financial condition at the end thereof.

"Such reports shall be in such form and contain such information as may be prescribed by the Commissioner.

"G.S. 54-44.10.  Annual Examination of Associations. At least once each year the Commissioner shall make or cause to be made an examination into the affairs of each guaranty association doing business in this State. The expenses of such yearly examination shall be paid by the association so examined.

"G.S. 54-44.11.  Special Examinations. Whenever the Commissioner deems it necessary he may make or cause to be made a special examination of any guaranty association doing business in this State in addition to the regular examination provided for by this Article. The expense of a special examination shall be paid by the guaranty association so examined.

"G.S. 54-44.12.  Right to Enter and Conduct Investigations. The Commissioner or any examiner appointed by him shall have access to and may compel the production of all books, papers, securities, moneys, and other property of a guaranty association under examination by him. He may administer oaths to and examine the officers and agents of such association as to its affairs.

"G.S. 54-44.13.  Fees. Each guaranty association doing business in this State shall pay to the Commissioner, at the time of filing each semiannual report required by this Article, the sum of five dollars ($5.00). All such fees shall be paid into the State treasury to the credit of the General Fund."

Sec. 2.  All laws and clauses of laws in conflict with this Act are hereby repealed.

Sec. 3.  This Act shall become effective upon its ratification.

In the General Assembly read three times and ratified, this the 3rd day of July, 1967.