2012 Arkansas Code
Title 23 - Public Utilities and Regulated Industries
Subtitle 2 - Financial Institutions And Securities
Chapter 38 - Building and Loan Associations -- Miscellaneous Provisions
Subchapter 3 - -- Liquidation
§ 23-38-302 - Notice of insolvency or illegal practices.

(a) If, from any source, it shall come to the knowledge of the Securities Commissioner that the assets of any building and loan association operating in this state have become impaired, and that it is insolvent; or that it is conducting its business in a fraudulent, illegal, or unsafe manner, which will jeopardize the safety of the investments therein; or that the amount of the paid-in guaranty permanent shares of any guaranty association is less than the ratio prescribed in this act to be maintained, as compared with its liabilities to other classes of shares and creditors, it shall be the duty of the commissioner to notify each officer and director of the association of the facts which have come to his or her knowledge.

(b) In case the assets of a mutual, serial, or Dayton optional payment plan association have become impaired and it is insolvent, the notice shall direct that effective steps be taken to restore the association to solvency, and that the commissioner be notified within a reasonable time, to be stated in the notice, of the action taken to carry out the directions thus given.

(c) In case the assets of a guaranty association have become impaired and it is insolvent, or if the ratio between the amount paid in on its guaranty permanent shares and its liabilities to all other classes of shares and creditors is less than the ratio prescribed in this act, the notice shall direct that an assessment shall be levied pro rata upon all the guaranty permanent shares at a rate sufficient to make good the impaired assets or correct the impaired ratio and applied for that purpose, or that other effective steps be taken to correct the shortages. The notice shall also direct that the commissioner be notified, within a reasonable time specified in the notice, of what steps have been taken to carry out the directions thus given.

(d) In case any association is conducting its business in a fraudulent, illegal, or unsafe manner, the notice shall direct that the association discontinue its fraudulent, illegal, and unsafe methods and practices, within a reasonable time which the notice shall specify, and that the commissioner shall be notified within that time as to what steps have been taken to comply with the notice.