J. MILLARD TAWES, Governor 367

rights, powers and privileges of ownership, including the right to
vote thereon, all without the approval of any regulatory authority of
the State of Maryland;

(2) All financial institutions as defined in Section 419 are hereby
authorized to become members of the corporation and to make loans
to the corporation as provided herein;

(3) A financial institution, as defined in Section 419, which does
not become a member of the corporation shall not be permitted to
acquire any shares of the capital stock of the corporation; and

(4) Each financial institution which becomes a member of the
corporation is hereby authorized to acquire, purchase, hold, sell,
assign, transfer, mortgage, pledge, or otherwise dispose of, any
bonds, securities or other evidences of indebtedness created by, or
the shares of the capital stock of the corporation, and while owners
of said stock to exercise all the rights, powers and privileges of
ownership, including the right to vote thereon, all without the ap-
proval of any regulatory authority of the State; provided, that the
amount of capital stock of the corporation which may be acquired
by any member pursuant to the authority granted herein shall not
exceed ten per cent of the loan limit (based on the formula therefor
provided in Section 420 (a) ) of such member. The amount of capital
stock of the corporation which any member is authorized to acquire
pursuant to the authority granted herein is in addition to the amount
of capital stock in corporations which such member may otherwise
be authorized to acquire.

424.

Such corporation shall be subject to an annual examination and
audit by one or more certified public accountants to be selected by
the board of directors, sufficient to reflect the result of the operations
during and the condition of the corporation at the end of the fiscal
year. A report of such examination, audit and condition of such
corporation shall be made in writing to each of the members and
stockholders of such corporation and to the Secretary of State of
Maryland on or before the [thirtieth] one hundred and twentieth
day of each succeeding fiscal year of said corporation.

425.

(a) Each year the corporation shall set apart as earned surplus
not less than ten per cent of its net earnings for the preceding fiscal
year until such surplus shall be equal in value to one half of the
amount paid in on the capital stock then outstanding. Said earned
surplus [shall be held in cash or invested in United States government
bonds or as provided in such corporation's bylaws, and] shall be
kept and used to meet losses and contingencies of such corporation;
and, whenever the amount of earned surplus shall become impaired;
it shall be built up again to the required amount in the manner
provided for its original accumulation.

SEC. 2. And be it further enacted, That this Act shall take effect
June 1, 1962.

Approved March 23, 1962.