2013 Kentucky Revised Statutes CHAPTER 286 - KENTUCKY FINANCIAL SERVICES CODE Subtitle 5 - Savings and Loan Associations 5.5-491 Default in payment of dues -- Fine -- Forfeiture of shares -- Payments in advance.
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286.5-491 Default in payment of dues -- Fine -- Forfeiture of shares -Payments in advance.
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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 arrears, and in the event the member is a borrower, not exceeding an
additional ten cents (10 ) per one hundred dollars ($100) or part thereof on
account of failure to pay interest. No fine shall be charged after the expiration
of six (6) months from the first lapse in any such payment, nor upon fines in
arrears.
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) days after notice, be declared forfeited and the withdrawable value of
the shares at the time of the first default shall be ascertained and, after
deducting all fines and other legal charges, the balance shall be placed to an
account to be designated as the "forfeited share account" to the credit of the
defaulting member. If the member is not a borrower, he shall be entitled, upon
thirty (30) days' notice, to receive the balance so transferred without interest, in
his turn, out of the funds appropriated to the payment of withdrawals. All shares
so forfeited or transferred shall cease to participate in any income of the
corporation accruing after the last adjustment and distribution of dividends
before the default.
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 the estimated annual taxes, assessments, insurance premiums, and other
charges upon the real estate securing a loan, or any of such charges, so as to
enable the association to pay such charges as they become due from the
funds so received. The amount of such monthly charges may be increased or
decreased so as to provide reasonably for the payment of the estimated annual
taxes, assessments, insurance premiums, and other charges. The association
may carry such funds in trust in an account or may credit the same to the
indebtedness and advance the money for taxes, insurance, or other charges.
Every association shall keep a record of the status of taxes, assessments,
insurance premiums, and other charges on all real estate securing its loans
and on all real and other property owned by it.
Effective:June 18, 1964
History: Created 1964 Ky. Acts ch. 138, sec. 30, effective June 18, 1964.
Formerly codified as KRS 289.491.
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 Kentucky Financial Services Code, KRS Chapter 286.
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