2009 Kentucky Revised Statutes Subtitle 5. Savings and Loan Associations 286.5.491 Default in payment of dues -- Fine -- Forfeiture of shares -- Payments in advance.
286.5-491 Default in payment of dues -- Fine -- Forfeiture of shares -- Payments in
advance.
(1) Members who default in payment of their monthly or weekly charges, may be
charged a fine not exceeding ten cents (10¢) per share a month on each share in <br>arrears, and in the event the member is a borrower, not exceeding an additional ten <br>cents (10¢) per one hundred dollars ($100) or part thereof on account of failure to <br>pay interest. No fine shall be charged after the expiration of six (6) months from the <br>first lapse in any such payment, nor upon fines in arrears.
(2) The shares of a member who continues in arrears more than six (6) weeks shall, at
the option of the directors, if the member fails to pay the arrears within thirty (30) <br>days after notice, be declared forfeited and the withdrawable value of the shares at <br>the time of the first default shall be ascertained and, after deducting all fines and <br>other legal charges, the balance shall be placed to an account to be designated as the <br>"forfeited share account" to the credit of the defaulting member. If the member is <br>not a borrower, he shall be entitled, upon thirty (30) days' notice, to receive the <br>balance so transferred without interest, in his turn, out of the funds appropriated to <br>the payment of withdrawals. All shares so forfeited or transferred shall cease to <br>participate in any income of the corporation accruing after the last adjustment and <br>distribution of dividends before the default.
(3) An association may require borrower to pay monthly in advance, in addition to
interest or interest and principal payments, the equivalent of one-twelfth (1/12) of <br>the estimated annual taxes, assessments, insurance premiums, and other charges <br>upon the real estate securing a loan, or any of such charges, so as to enable the <br>association to pay such charges as they become due from the funds so received. The <br>amount of such monthly charges may be increased or decreased so as to provide <br>reasonably for the payment of the estimated annual taxes, assessments, insurance <br>premiums, and other charges. The association may carry such funds in trust in an <br>account or may credit the same to the indebtedness and advance the money for <br>taxes, insurance, or other charges. Every association shall keep a record of the status <br>of taxes, assessments, insurance premiums, and other charges on all real estate <br>securing its loans and on all real and other property owned by it.
Effective: June 18, 1964 <br>History: Created 1964 Ky. Acts ch. 138, sec. 30, effective June 18, 1964. <br>Formerly codified as KRS 289.491. <br>Legislative Research Commission Note (7/12/2006). In accordance with 2006 Ky. Acts
ch. 247, secs. 38 and 39, this statute has been renumbered as a section of the <br>Kentucky Financial Services Code, KRS Chapter 286.
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