J. MILLARD TAWES, GOVERNOR 255
CHAPTER 94
(Senate Bill 41)

AN ACT to repeal and re-enact, with amendments, Sections 42 and
43 of Article 11 of the Annotated Code of Maryland, (1957
Edition), title "Banks and Trust Companies", sub-title "Savings
Institutions", relating to the payment of dividends or interest by
certain savings institutions in this State, and to the guarantee fund
which is to be held by such institutions without impairment by the
payment of interest and dividends, and correcting an error in
this section.

SECTION 1. Be it enacted by the General Assembly of Maryland,
That Sections 42 and 43 of Article 11 of the Annotated Code of
Maryland, (1957 Edition), title "Banks and Trust Companies", sub-
title "Savings Institutions", be and the same are hereby repealed and
re-enacted, with amendments, to read as follows:

42. No savings institution shall, out of its net earnings in the
course of any year, declare or pay any dividend or interest to its
depositors, unless there shall be reserved and set aside, as a guarantee
fund, an amount equivalent to at least [one-eighth] one-quarter of 1
per cent, per annum on the whole amount of deposits then held, until
such guarantee fund shall amount to at least [3] 5 per cent, on the
whole amount of deposits. The guarantee fund shall at all times be
maintained for the protection of depositors [, and shall never be im-
paired by the payment of any interest or dividends],

43. The dividend or interest of the depositors in such savings in-
stitution shall be declared and paid from the net income or profits
after deducting expenses for management, losses, necessary credits
to premium account, taxes, and the amount reserved for guarantee
fund, but this dividend shall not exceed such net income or profit
remaining after the above deductions, nor shall it at any time impair
the guarantee fund of [3] 5 per cent, provided for. In ascertaining
the profits or earnings, no savings institution shall be required to
charge off from the premium of bonds purchased or [hold] held
more than an amount proportionate to the life of the bond [, and in
ascertaining the amount of said guarantee fund the assets shall not
be valued above their market value]. In evaluating the assets of the
institution^ the Commissioner may use such method for the evaluation
of securities and other assets as may from time to time be adopted
and approved by the Federal bank supervisory agencies.

If the Commissioner at any time shall find that the guarantee fund
is less than five per centum (5%) on the whole amount of the
deposits in any such institution, he may cause said institution to re-
duce the interest rate paid or to be paid in an amount sufficient to
restore the guarantee fund to the amount required by this article.
No such institution, however, may be required to set aside more
than one quarter of one per centum (^ of 1%) on the whole amount

EXPLANATION: Italics indicate new matter added to existing law.

[Brackets] indicate matter stricken from existing law.

CAPITALS indicate amendments to bill.

Strike out indicates matter stricken out of bill.