946 LAWS OF MARYLAND [CH. 337

in fixed monthly installments instead of one sum. No member
of the board of directors, credit, committee or of the super-
visory committee shall either directly or indirectly, borrow
from or become surety for a loan or advance made by the cor-
poration, in excess of the total of his shares and deposit in said
union, unless said loan shall have been approved at a regu-
larly called meeting of the members of the corporation by a
majority vote of those present and represented at said meeting
and unless the call for the meeting contained notice of the fact
that such loan would be discussed at said meeting.

All officers and members of committee in any way know-
ingly permitted or participating in making a loan of funds
of a credit union to a non-member thereof shall be guilty of a
misdemeanor. The credit union shall have the right to re-
cover the amount of said illegal loans from the borrower or
from any officer or member of committees who knowingly per-
mitted or participated in the making thereof, or from them
all jointly. The supervisory committee shall appoint a sub-
stitute to act on the credit committee in the place of any mem-
ber, in case such member makes application to borrow money
from the credit union or to become surety for any other mem-
ber, whose application for a loan is under consideration. A
borrower may repay the whole or any part of this loan on any
day on which the office of the corporation is open for business.

SEC. 18. No credit union shall charge interest at the rate
which exceeds one per cent, per month, on unpaid balances.

SEC. 19. All entrance fees, transfer fees and fines shall,
after the payment of the organization expenses, to be known as
reserve income, and shall be added to the reserve fund of the
corporation. At the close of each fiscal year there shall be set
apart to the reserve fund twenty-five per cent, of the net in-
come of the corporation which has accumulated during the
year. This amount may be increased by vote of the members
on recommendation of the directors. The reserve fund shall
belong to the corporation and shall be held to meet contin-
gencies, and shall not be distributed to members, except upon
dissolution of the corporation.

SEC. 20. At the close of the fiscal year a credit union may
declare a dividend from the net earnings, after deducting the
proportionate part of the earnings set aside to the reserve fund.
Dividends shall be paid in the way and manner provided 111
the by-laws.