HARRY HUGHES, Governor                             3071

Former CA § 6-213(c)(l), which provided that the
articles of incorporation of a capital stock association
required that the holder of a free share account had the
same voting rights as a stockholder, was deleted as
inherently inequitable. Membership now determines voting
rights.

Former CA § 6-213(b)(2) and (3) which provided the
requirements for an existing association to convert to a
capital stock association and the requirements for a
proposed association to organize as a capital stock
association was deleted as being duplicative of provisions
in subtitle 6, as to conversion, and Subtitle 2, as to
organization.

Former CA § 6-213(c)(3), which prohibited payment of a
commission for obtaining stock subscriptions except in
connection with an underwriting by a registered broker, was
deleted as too restrictive. The provision that the amount
received could not be less than par value was deleted as
unnecessary in light of similar provisions in Subtitle 3.

Former CA § 6-214(a), which provided that guaranty
stock is a secondary reserve from which losses are paid
after other reserves are exhausted, was deleted since it is
inaccurate. Capital stock is not a secondary reserve in
accounting terminology but is, instead, the stated capital,
and losses are treated in accordance with general corporate
law.

Former CA § 6-216(c)(l), which prohibited a controlling
person from participating in transactions that could result
in a conflict of interest, was deleted in light of similar
provisions in § 9-323(d) of this subtitle.

Former CA § 6-216(e)(l) and (2), which provided that a
controlling person could not sell more than 25 percent of
the controlling stock without approval by the Division
Director, was deleted as being too restrictive.

The first sentence of former CA § 6-217.1(a), which
provided that incorporators of a capital stock association
file the articles of incorporation and the Board of
Commissioners must give prior written approval to the
incorporators, was deleted as unnecessary in light of
duplicate provisions in Subtitle 2 of this title.

Art. 23, § 161A(f), which duplicated former CA §
6-212(a)(1) and (2) and provided that a savings and loan
association may have only one kind or class of shares, and
that all holders of shares or stock had equal rights as to
voting, earnings, and assets, was deleted as being obsolete.

Former Art. 23, § 161D(c)(l) and (2) which related to
maintenance of free share accounts by certain associations
in existence before regulatory authority was instituted was