HARRY HUGHES, Governor                             3045

(D)  DIVIDENDS OR INTEREST; OWNERSHIP.

EXCEPT AS TO WITHDRAWAL RIGHTS, PRIORITY OF CLAIMS ON
LIQUIDATION, AND THE PROVISIONS OF THIS SECTION, AN
INCORPORATOR'S CONTRIBUTION TO THE INITIAL GENERAL RESERVE
FUND SHALL BE TREATED AS A SAVINGS ACCOUNT IN THE SAVINGS
AND LOAN ASSOCIATION.

(E)  EXCEPTION.

SUBSECTIONS (C) AND (D) OF THIS SECTION DO NOT APPLY TO
ANY PORTION OF THE INITIAL GENERAL RESERVE FUND THAT IS
PROVIDED FROM THE PAID-IN SURPLUS OF A CAPITAL STOCK
ASSOCIATION.

COMMITTEE COMMENT: This section replaces former CA §
6-204(b) and Art. 23, § 161M(a)(2).

This initial general reserve fund is in place
until the Corporation's own reserves are
established.

Subsection (b) of this section is new language
added to clarify the use of the fund.

Subsection (c) of this section clarifies that it
is the Initial General Reserve Fund which
terminates under appropriate conditions.

In subsection (c)(1), the time period of
maintenance of the Initial General Reserve Fund
is increased from 5 years to 10 years.

Subsection (c)(3) of this section, which gives
the Board of Commissioners authority to permit
this fund to be terminated is a new provision
added on the advice of the Board of
Commissioners. Note that subsection (c)(2) is an
event unlikely ever to be met in modern
associations.

Subsection (d) of this section is a new provision
added to make clear that the incorporator's
initial contribution is returned after the
requirements of subsection (c) are met. The
provision for dividends to be paid on the amounts
in the Initial General Reserve Fund is a new
provision suggested by the need to make such an
investment attractive to investors.

Subsection (e) of this section is new language
added as a corollary to the provision that allows
a capital stock association to use its paid-in
surplus for the initial general reserve fund.

As to the maintenance of the General Reserve Fund
see § 9-327 of this title.