Chapter 1133: SOCIETIES FOR SAVING

1133.01 Societies for saving definitions.

Where terms used in this chapter are defined in section 1101.01 of the Revised Code, they shall have the meaning set forth in that section.

Effective Date: 01-01-1997

1133.02 Incorporating society for savings - contents of articles of incorporation.

(A) Any number of natural persons, not less than twenty, each of whom is acting in the person's individual capacity and not as the representative, agent, nominee, or trustee for any person, organization, firm, or corporation, whether for profit, or not for profit, not less than three-fourths of whom are citizens of this state, may act as incorporators and become incorporated as a mutual savings bank without capital stock, to be known as a society for savings or a savings society, upon the terms and subject to the limitations prescribed in this chapter and in Chapters 1101. to 1127. of the Revised Code.

(B) Such persons shall subscribe articles of incorporation which must contain:

(1) The name by which such corporation is to be known, which shall include "savings society" or "society for savings" but shall not contain "bank," "banker," "banking," or words of similar meaning in any foreign language;

(2) The particular municipal corporation or township where its business is to be transacted;

(3) A statement that such corporation is formed as a savings society or as a society for savings;

(4) The names and post-office addresses of its trustees, not less than five, who are to serve until the first annual or other meeting called to elect trustees, or to have such other tenure of office as is specified in said articles.

(C) In addition, such articles may contain:

(1) The names of any persons who, together with the subscribers to the articles, are to be members of the corporation upon organization;

(2) Any qualification for membership in such corporation, and the method of selection of members;

(3) Any provision for the purpose of defining, limiting, or regulating the exercise of the powers of the corporation, the trustees, the members, and any class of members.

(D) The articles with the instruments required by section 1113.01 of the Revised Code shall be filed with the superintendent of financial institutions.

Effective Date: 01-01-1997

1133.03 Superintendent of financial institutions examination and certification - recording articles.

Upon receipt of a copy of the articles of incorporation and accompanying documents, the superintendent of financial institutions shall give notice and make an examination as required by section 1113.03 of the Revised Code. The superintendent shall forward the articles and the superintendent's certificate to the secretary of state and the incorporators in the manner provided in section 1113.03 of the Revised Code.

When such articles are recorded by the secretary of state, the incorporators, any other members designated in the articles, and their successors, shall, from the date of such recording, constitute a body corporate with perpetual succession, with the powers provided in section 1702.12 of the Revised Code. So far as consistent with this chapter, Chapter 1702. of the Revised Code shall apply to societies incorporated under this chapter.

Effective Date: 01-01-1997

1133.04 Guaranty fund.

Before any society for savings or savings society incorporated on or after January 1, 1968, may do business in this state, its incorporators shall establish and create out of their individual resources pro rata a guaranty fund. The fund shall be for the protection of its depositors against losses upon its loans and investments, whether arising from depreciation in the market value of its securities or otherwise, and for expenses of organization and of the first year's operations. The guaranty fund shall be created by paying to the credit of the corporation, in cash, at least two hundred fifty thousand dollars, and at least ten thousand dollars additional to cover such expenses. Contributions to the fund may be repaid to the contributors pro rata whenever the repayment will not reduce the surplus provided for in section 1133.10 of the Revised Code to less than twenty per cent of the whole amount of the corporation's deposits or to less than two hundred fifty thousand dollars, provided the superintendent of financial institutions approves in writing the time and amount of the repayment. If the corporation is liquidated, the contributions for expenses shall be repaid to the contributors thereof pro rata. There shall first be paid the debts, deposits, and the expense of liquidation. After the full repayment of such contributions, other contributions to the guaranty fund shall be repaid to the contributors thereof pro rata, without the allowance of any interest, dividend, or profit thereon, before any distribution of surplus is made among depositors.

Effective Date: 01-01-1997

1133.05 Deposits - investments - division of profits.

A society incorporated under this chapter and a society which by election or otherwise is subject to this chapter, may receive deposits of money only from one or more individuals or from a corporation, association, or other organization not organized or operated for profit. A society may use and improve such money for the purposes and according to the direction specified in this chapter. Investments of such money may be made in the same manner as investments of funds by banks organized under the laws of the state; however, except as provided in division (B) of section 1109.47 of the Revised Code, a society shall not invest more than three per cent of its deposits and surplus in the stock, obligations, or other securities of any one issuer. The income or profits from such investments shall be divided among the persons and nonprofit organizations making deposits or their executors, administrators, assigns, and successors in just proportion after such reasonable deductions as may be chargeable on the income or profits. Such deposits may be withdrawn at such times and in such manner as are provided for in the rules of the society, except that no deposit may be withdrawn by check or draft. No society shall carry for any member or depositor any demand, commercial, or checking account. No compensation or profit shall accrue or be paid to members or trustees of the society as such, other than reasonable compensation to trustees for attendance at meetings of the trustees or of committees of the trustees. The society may limit the aggregate amount which any one person may deposit with it, may refuse to receive any deposit, and may at any time return any part of any deposit if the trustees determine to return it.

Effective Date: 01-01-1997

1133.06 Loans - obligations - reserves.

Any society for savings or savings society may make loans in reliance for repayment on the character and earning capacity of the borrower, and in addition to discounting interest at the rate allowed by law, require such borrower, as security for the loan, to make periodical deposits with the society during the period of the loan, with or without an allowance of interest on the deposits, and with or without additional security. The society may purchase any obligation payable in installments, with or without recourse on the holder from which it is purchased, and such transactions shall not be deemed usurious. No reserve shall be required against deposits hypothecated to secure indebtedness of a depositor to the society, and such hypothecated deposits shall not be included in the whole amount of deposits referred to in section 1133.10 of the Revised Code.

Effective Date: 01-01-1997

1133.07 Investment and loan authority.

In addition to investments and loans authorized by sections 1133.05 and 1133.06 of the Revised Code, any society for savings or savings society may make investments and loans, including the purchase of participations or commitments to purchase from a federal reserve bank. A society may make investments or loans in cooperation with a federal reserve bank, any other credit agency organized or sponsored by the United States, banks organized under the laws of the United States or of any state, or insurance companies. Loans and investments shall be subject to all of the following:

(A) Division (B)(1) of section 1109.22 of the Revised Code. However, except as otherwise provided by the superintendent of financial institutions, the total loans and extensions of credit by a society to a person outstanding at one time shall not exceed three per cent of the society's deposits and surplus.

(B) Section 1109.47 of the Revised Code. However, except as provided in division (B) of section 1109.47 of the Revised Code, a society shall not invest more than three per cent of its deposits and surplus in the stock, obligations, or other securities of any one issuer.

(C) Such restrictions as to maturity, security, and collateral and such protective provisions as are prescribed in rules adopted by the superintendent.

Effective Date: 01-01-1997

1133.08 Amortized real estate loans.

Any society for savings or savings society may make amortized real estate loans in an amount not to exceed eighty per cent of the appraised value of the real estate offered as security for such loans, but in all other respects such loans shall be made in accordance with the limitations and restrictions prescribed by section 1109.16 of the Revised Code in regard to real estate loans by banks.

Effective Date: 01-01-1997

1133.09 Additional investments and loans.

Any society for savings or savings society, in addition to the investments and loans authorized by this chapter and Chapters 1101. to 1127. of the Revised Code, may invest its funds in assets, other than corporate stocks, investment in which is not otherwise authorized by such chapters, if the book value of all assets held under this section plus the aggregate book value, as defined in section 1109.31 of the Revised Code, of all real estate held by it under divisions (A) and (B) of section 1109.31 of the Revised Code does not exceed one hundred per cent of the amount of its surplus fund.

Effective Date: 01-01-1997

1133.10 Surplus fund balance.

In this section, "surplus fund" means the net assets of a society for savings or of a savings society over and above the amount of its debts and deposits, excluding from its debts its liability on capital notes or debentures that are subordinated to its other debts and to its deposits.

Before any dividend or interest on deposits is paid by a society incorporated under this chapter, it shall have a surplus fund equal to not less than five per cent of the whole amount of the deposits. It shall gradually increase the surplus fund to an amount equal to ten per cent of such amount of deposits. This section does not prevent the corporation from increasing the surplus fund to such an amount in excess of ten per cent of such deposits as the trustees deem adequate for the protection of the deposits.

Effective Date: 01-01-1997

1133.11 Capital notes and debentures.

A society incorporated under this chapter may issue its capital notes or debentures at such times, in such amounts, and subject to such terms as the superintendent of financial institutions approves in writing, but in no event shall such terms require or permit that the holders of such capital notes or debentures be held individually responsible as such holders for any debts, contracts, or engagements of the corporation.

Effective Date: 01-01-1997

1133.12 No loans to officers or trustees.

No officer or trustee of a society incorporated under this chapter shall, on or after January 1, 1968, borrow any of its funds, become surety for loans by it to others, or directly or indirectly, on behalf of himself or herself or of others, become an obligor for money borrowed from the corporation.

Effective Date: 01-01-1997

1133.13 Federal reserve membership.

A society incorporated under this chapter may become a member bank under the "Federal Reserve Act of 1913." Every such corporation that becomes such a member bank may do everything which the "Federal Reserve Act of 1913" requires of or permits to member banks, and is subject to section 1109.03 of the Revised Code.

Such corporation may do all things necessary or proper, including the purchase of stock in the federal deposit insurance corporation, to secure temporary and permanent insurance of deposits.

Effective Date: 01-01-1997

1133.14 Provisions applicable to societies for savings.

Societies incorporated under this chapter are subject to all sections of the Revised Code relating to:

(A) Examinations and reports of a bank;

(B) Payment of fees to the superintendent of financial institutions;

(C) Keeping books and accounts;

(D) Establishing branches;

(E) Bonds of officers;

(F) Orders of the superintendent;

(G) Consolidation with or transfer of assets to another society for savings or to a bank;

(H) The provisions of Chapter 1125. of the Revised Code;

(I) Purchase of real estate by banks;

(J) Receipt and payment of time deposits;

(K) Leasing of safety deposit boxes and accepting property for safekeeping;

(L) Deposits in names of minors, joint deposits, and deposits in trust for another;

(M) Maintenance and deposit of reserves required for time deposits;

(N) Dealing in foreign exchange;

(O) The provisions of sections 1127.01 and 1127.09 of the Revised Code.

The trustees of societies incorporated under this chapter shall cause minutes of meetings to be kept and recorded as required of directors of a bank under section 1105.08 of the Revised Code.

Effective Date: 01-01-1997

1133.15 No investment in capital stock of bank.

No society shall organize, acquire, whether by subscription or purchase, invest in, or own the capital stock of a bank except that acquired prior to December 31, 1956.

Effective Date: 01-01-1997

1133.16 Investments and dividends of certain societies.

Savings societies organized and doing business under volume 64, Ohio Laws, page 184, and volume 65, Ohio Laws, page 27, may, in addition to the investments authorized in such acts, invest their funds in the bonds of any county or municipal corporation in this state, and may charge interest on loans of not more than eight per cent per annum payable semiannually.

Societies for savings incorporated by the general assembly and doing business under their respective acts of incorporation may invest in land, and in the erection of buildings thereon, for the purpose of their own business, such sums, not more than five per cent of the amount of deposits held by them, as their trustees deem necessary, and may also rent any part of such buildings not needed for their own use.

Before a dividend, or interest on deposits, is paid by such a savings society or society for savings, the society shall have a surplus fund equal to not less than five per cent of the whole amount of deposits made with it. It shall gradually increase such fund to an amount equal to ten per cent of such amount of deposits.

Effective Date: 01-01-1997