SPIRO T. AGNEW, Governor                         21

152.

(b) An endorsed note, or a note secured by a duly recorded lien
upon unencumbered real or leasehold property, or the assignment of
shares and deposits in the credit union, may be deemed security by
the credit committee within the meaning of this subtitle. No member
of the board of directors, credit committee or the supervisory com-
mittee shall directly or indirectly borrow from or become security
for a loan or advance made by the corporation, in excess of the total
of his shares and deposits, or in excess of the total of paid-in shares
and deposits, held by him and his comakers in said credit union,
unless said loan shall have been approved [at a regularly called meet-
ing of the membership 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 dis-
cussed at said meeting] by a majority vote at a joint meeting in the
absence of the applicant at which a majority of the members of the
credit committee and a majority of the members of the board of
directors are present.

Sec. 2. And be it further enacted, That this Act shall take effect
July 1, 1968.

Approved March 22, 1968.

CHAPTER 21
(Senate Bill 110)

AN ACT to repeal and re-enact, with amendments, Section 154 of
Article 11 of the Annotated Code of Maryland (1957 Edition),
title "Banks and Trust Companies," subtitle "Credit Unions," to
lower the present annual transfer requirement for the reserve fund
of credit unions.

Section 1. Be it enacted by the General Assembly of Maryland,
That Section 154 of Article 11 of the Annotated Code of Maryland
(1957 Edition), title "Banks and Trust Companies," subtitle "Credit
Unions," be and it is hereby repealed and re-enacted, with amend-
ments, to read as follows:

154.

All entrance fees, transfer fees and fines shall, after the payment
of the organization expenses, 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 20% of the
net income of the corporation, which has been earned for the year.
This amount may be increased by vote of the members of the credit
union on the recommendation of the board of directors. The reserve
fund shall belong to the corporation and shall be held to meet con-
tingencies rising through losses in loans, etc., and shall not be dis-
tributed to members, except upon dissolution of the corporation.
When the reserve fund shall equal [20 %] 10% of the amount paid
in on shares by members, only such amount of the annual net income