HOUSE BILL No. 5414


     February 22, 2000, Introduced by Reps. Koetje, Law, Shulman, Sanborn, Kukuk, LaSata, Baird, Minore, Schermesser,
Voorhees, Hart, Richner, Switalski and Faunce and referred to the Committee on Family and Civil Law.


        A bill to amend 1996 PA 354, entitled

   "Savings bank act,"

   by amending section 501 (MCL 487.3501).

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 1
           Sec. 501.  (1) A stock savings bank whose capital, in the

 2
      opinion of the commissioner, has become impaired by losses or

 3
      otherwise, within 2 months after receiving notice of impairment

 4
      from the commissioner, shall correct the deficiency in  the  ITS

 5
      capital by an assessment upon the shareholders pro rata on the

 6
      amount of capital stock held by each.  If a stock savings bank

 7
      fails to restore its capital within 2 months after receiving

 8
      notice from the commissioner or, within the same period, fails to

 9
      take steps to liquidate its business and affairs, a receiver may

10
      be appointed for the savings bank under this act.  The

11
      commissioner, in his or her discretion, may grant extensions of


   02120'99 n                                               DAM
                                                2

 1
      time as he or she considers advisable in order to allow the

 2
      savings bank to meet the deficiency in  the  ITS capital.

 3
           (2) If any part of the capital of a savings bank consists of

 4
      preferred stock, the determination of whether or not the capital

 5
      of the savings bank is impaired and the amount of impairment

 6
      shall be based upon the par value of its stock even  though  IF

 7
      the amount  which  THAT the holders of the preferred stock  shall

 8
      be  ARE entitled to receive in the event of retirement or liqui-

 9
      dation  shall be  IS in excess of the par value of the preferred

10
      stock.

11
           (3) The directors of a savings bank whose capital has become

12
      impaired by losses or otherwise shall levy within the 2 month

13
      period an assessment upon the stock of the savings bank to repair

14
      the deficiency, and give notice of the action of the commissioner

15
      and the amount of the assessment that each shareholder must pay

16
      for the purpose of making good the deficiency to each shareholder

17
      by written notice personally served or mailed to the shareholder

18
      at his or her last known address as IT appears  from  IN the

19
      records of the savings bank.

20
           (4) If the assessment is levied by the directors and a

21
      shareholder refuses or neglects to pay the assessment under this

22
      section within 30 days from the date of the notice of the amount

23
      to be paid, the directors of the savings bank shall sell the

24
      stock of the shareholder to the highest bidder at either public

25
      or private sale in the manner provided for the disposition of

26
      collateral under section  9504  9610 of the uniform commercial

27
      code,  Act No. 174 of the Public Acts of 1962, being section



   02120'99 n
                                   3

 1
      440.9504 of the Michigan Compiled Laws  1962 PA 174, MCL

 2
      440.9610.

 3
           (5) A sale of stock under this section shall effect an abso-

 4
      lute cancellation of the outstanding certificates evidencing the

 5
      stock sold and make the certificates null and void and new cer-

 6
      tificates shall be issued by the savings bank to the  new  pur-

 7
      chaser OF THE STOCK.  Out of the proceeds of the stocks sold, the

 8
      directors shall pay the necessary costs of sale and the amount of

 9
      assessment levied on the stocks and any remaining balance shall

10
      be paid to the person whose stock has been sold.

11
           (6) The holders of preferred stock  shall not be  ARE NOT

12
      liable for assessments to restore impairment in the capital of a

13
      savings bank.

14
           Enacting section 1.  This amendatory act does not take

15
      effect unless House Bill No. 5228 of the 90th Legislature is

16
      enacted into law.

























   02120'99 n          Final page.                          DAM