Francisco, there shall not be more than three elective directors from any of the States.

[24 F.R. 9579, Dec. 1, 1959]

Prior Amendments

1959: 24 F.R. 6086, July 30.

§ 522.40 Mailing of nominating certificates and balloting material.

All nominating and balloting material sent to members shall be forwarded by regular mail, except that such material sent to members in Guam, Puerto Rico, the Virgin Islands, Alaska and Hawaii shall be forwarded by airmail. Each Bank will be furnished with copies of all nominating certificates, ballots and other election material which has been forwarded to its members. [24 F.R. 9580, Dec. 1, 1959]

§ 522.43 Polling time.

In the event any date specified in §§ 522.22 to 522.37 falls on a Saturday, Sunday or a holiday, the next busi

of any loan involved or any part thereof or to withhold or to have withheld from the seller any sum of money or any such thing of value by way of security against any such default.

(Sec. 5, 48 Stat. 132, as amended; 12 U.S.C. 1464. Reorg. Plan No. 3 of 1947, 12 F.R. 4981, 3 CFR 1947 Supp.)

CODIFICATION: § 541.17 was added, 24 F.R. 7864, Sept. 30, 1959, and subsequently revised, 24 F.R. 9233, Nov. 13, 1959.

(a) Emergency operations by surviving staff. In the event of an emergency declared by the President of the United States or the person performing his functions, the officers and employees of this association will continue to conduct = the affairs of the association under such guidance from the directors as may be available except as to matters which by statute require specific approval of the board of directors and subject to conformance with any governmental directives during the emergency.

(b) Emergency operations by directors or members of executive committee. The board of directors shall have the power, in the absence or disability of any officer, or upon the refusal of any officer to act, to delegate and prescribe such officer's powers and duties to any other officer, or to any director, for the time being. In the event of a state of disaster of sufficient severity to prevent the conduct and management of the affairs and business of this association by its directors and officers as contemplated by these bylaws, any two or more available members of the then incumbent executive committee shall constitute a quorum of that committee for the full conduct and management of the affairs and business of the association in accordance with the provisions of Article

of

these bylaws. In the event of the unavailability, at such time, of a minimum of two members of the then incumbent executive committee, any three available directors shall constitute the executive committee for the full conduct and management of the affairs and business of the association in accordance with the foregoing provisions of this section. This bylaw shall be subject to implementation by resolutions of the board of directors passed from time to time for that purpose, and any provisions of these bylaws (other than this section) and any resolutions which are contrary to the provisions of this section or to the provisions of any such implementary resolutions shall be suspended until it shall be determined by any interim executive committee acting under this section that it shall be to the advantage of this association to resume the conduct and management of its affairs and business under all of the other provisions of these bylaws.

(c) Officer succession. If consequent upon war or warlike damage or disaster,

the president of this association cannot be located by the then acting home office or is unable to assume or to continue normal executive duties, then the authority and duties of the president shall, without further action of the board of directors, be automatically assumed by one of the following persons in the order designated: (List of names in order of succession is shown in the official minutes of the association and in the certified copies which are under seal in various depositories.)

Any one of the above persons who in accordance with this resolution assumes the authority and duties of the president shall continue to serve until he resigns or until five-sixths of the other officers who are attached to the then acting home office decide in writing he is unable to perform said duties or until the elected president of this association, or a person higher on the above list, shall become available to perform the duties of president of the association. If consequent upon war or warlike damage or disaster, the treasurer of this association cannot be located by the then acting home office or is unable to assume or to continue normal executive duties, then the authority and duties of the treasurer shall, without further action by the board of directors, be automatically assumed by one of the following persons in the order designated: (List of names in order of succession is shown in the official minutes of the association and in the certified copies which are under seal in various depositories.)

The person assuming the authority and duties of treasurer in accordance with this resolution shall serve until (1) the elected treasurer or person whose name is higher on the above list shall be able to function as treasurer, or (2) until he resigns or is unable as determined by the acting president to perform the duties of his office. In the case of subparagraph (2) of this paragraph, the next eligible and available person on the above list shall assume the authority and duties of the treasurer. Anyone dealing with this association may accept a certification by any three officers that a specified individual is acting as president or that a specified individual is acting as treasurer in accordance with this resolution; and that anyone accepting such certification may continue to consider it in force until notified in writing of a

branches, if any), and any other legally authorized location which may be leased or acquired by this association to carry on its business. During an emergency resulting in any authorized place of business of this association being unable to function, the business ordinarily conducted at such location shall be relocated elsewhere in suitable quarters, in addition to or in lieu of the locations heretofore mentioned, as may be designated by the board of directors or by the executive committee or by such persons as are then, in accordance with resolutions adopted from time to time by the board of directors dealing with the exercise of authority in the time of such emergency, conducting the affairs of this association. Any temporarily relocated place of business of this association shall be returned to its legally authorized location as soon as practicable and such temporary place of business shall then be discontinued.

(e) Providing for acting home offices. In case of, and provided that, because of war or warlike damage or disaster, the Home Office of this association is unable temporarily to continue its functions, Branch, located in

shall automatically and without further action of this board of directors, become the "Acting Home Office of this Association"; that if by reason of said war or warlike damage or disaster, both the Home Office of this association and the said Branch of this association are unable to carry on their functions, then and in such case, the Branch of this association, located in shall, without further action of this board of directors, become the "Acting Home Office of this Association"; and if neither Branch nor

Branch can carry on their functions, then the Branch of this association, located in shall, without further action

-"

of this board of directors, become the "Acting Home Office of this Association."

The Home Office shall resume its functions at its legally authorized location as soon as practicable.

(Sec. 5, 48 Stat. 132, as amended; 12 U.S.C. 1464, Reorg. Plan No. 3 of 1947, 12 F.R. 4981, 3 CFR, 1947 Supp.) [24 F.R. 8461, Oct. 20, 1959; 24 F.R. 8971, Nov. 4, 1959]

Sec. 545.1 545.1-3

545.6-4 545.6-4a

Participation loans. [Revised]

Participation loans on real estate beyond regular lending area. [Amended; deleted]

545.6-14 Loans to finance acquisition and [Added]

545.8

§ 545.1

development of land. Unsecured loans.

CAPITAL

Savings accounts.

[Amended]

The capital of a Federal association may be raised through payments on its savings accounts in the form of cash, or of property in which such Federal association is authorized to invest, and in the absence of actual fraud in the transaction, the value of such property, as determined by the board of directors of such Federal association, shall be conclusive. The savings accounts of a Federal association that has a Charter E or a Charter K and which amends such charter to read in the form of Charter N or Charter K (rev.) shall continue to have the same rights and privileges and to be subject to the same duties and liabilities as were provided in the charter in effect at the time such savings accounts were created, until exchanged for a savings account issued under the provisions of Charter N or Charter K (rev.). No Federal association shall pay any sales commission contrary to the terms of § 563.25 of the rules and regulations for Insurance of Accounts (§ 563.25 of Subchapter D of this chapter) or do any act prohibited by the terms of said section. Except to the extent expressly authorized by Charter E, no Federal association shall directly or indirectly charge any membership admission, repurchase, withdrawal, or any other fee or sum of money, for the privilege of be

Page 52

coming, remaining, or ceasing to be a holder of a savings account of such Federal association

[24 F.R. 9657, Dec. 3, 1959]

§ 545.1-3 Grace periods with respect to withdrawals.

Where (a) a Federal association has a charter in the form of Charter N or Charter K (rev.) without any variation or amendment inconsistent with the provisions of this section, and (b) there is outstanding, immediately prior to the beginning of the first of the last three business days of a dividend period of such association, a resolution or other action of the association's board of directors adopting the basis of distribution provided for in this section, any withdrawal, total or partial, made during such last three business days shall, for the purpose of the calculation of dividends, be considered as having been made immediately after the close of such period.

[24 F.R. 9580, Dec. 1, 1959]

(a) General. Any Federal association may participate with other lenders in making loans of any type that such an association may otherwise make: Provided, That:

(1) The real estate security is located within such association's regular lending area;

(2) Each of the lenders is either an instrumentality of the United States Government or is insured by the Federal Savings and Loan Insurance Corporation or by the Federal Deposit Insurance Corporation.

(b) Participation loans on real estate beyond regular lending area. In addition to its authority under paragraph (a) of this section, any Federal association may, to the extent that it has under statute and its charter legal authority to do so, participate in making a loan, secured by first lien upon a home located beyond the association's regular lending area, of any type that it may make under this part, provided each of the lenders is an institution the accounts of which are insured by the Federal Savings and Loan Insurance Corporation, or purchase from any such institution a participation

in such a loan. Any Federal association may, to the extent that it has under statute and its charter legal authority to do so, sell to any such institution, without regard to the provisions of § 545.11, a participating interest in any loan, and such sale shall not be regarded as a sale of a loan within the meaning of § 545.11. Any sale by a Federal association of a participating interest in any loan shall be without recourse.

[24 F.R. 9233, Nov. 13, 1959]

§ 545.6-4a Participation loans on real estate beyond regular lending area. [Deleted, 24 F.R. 9233, Nov. 13, 1959] Prior Amendments

1959: 24 F.R. 7864, Sept. 30.

NOTE: Regulations formerly contained in this section were transferred and made a part of § 545.6-4.

§ 545.6-14 Loans to finance acquisition and development of land.

(a) General provisions. Subject to the provisions of this section, a Federal association may, if permitted by the terms of its charter, exercise the authority conferred by the last paragraph of subsection (c) of section 5 of the Home Owners' Loan Act of 1933, as amended, to invest in loans to finance the acquisition and development of land for primarily residential usage. Said authority shall be exercised by a Federal association only by the making of loans in accordance with the provisions of this section. Such loan plans, practices, and procedures, not inconsistent with this section or with other provisions of this part otherwise applicable to such loans, as may be used in the making of such loans are hereby approved by the Board.

(b) Basic limitations. (1) A Federal association may make loans under this section only when the aggregate of its general reserves, surplus, and undivided profits exceeds 5 percent of the amount of its withdrawable accounts. A Federal association shall not make any loan under this section if the resulting aggregate of its investments in loans under this section would exceed 3 percent of its withdrawable accounts.

(2) A Federal association shall not, directly or indirectly, make a loan under this section to any person, or to any partnership, corporation, or syndicate,

hereinafter referred to as applicant, if the aggregate of the amount of such loan and of the principal balances of all outstanding loans made under this section to such applicant exceeds 15 percent of the aggregate amount of the investments in such loans that such Federal association is authorized to make pursuant to the provisions of this section: Provided, That in computing the amount of the balances of all outstanding loans made to such applicant there shall be included the balances of all outstanding loans made under this section to any partnership, corporation, or syndicate of which any partner, stockholder, owner, participant, or officer is the applicant or is a partner, stockholder, owner, participant, or officer of the applicant.

(c) Limitations on specific loans. Loans under this section shall be made to finance, within the meaning of the last paragraph of subsection (c) of said section 5, the acquisition and development of land for primarily residential usage. Such land shall be located within the association's regular lending area, and such loans shall be loans on the security of first liens on real estate, in fee simple, consisting of land the development of which is to be financed by the loan. The principal obligation of each such loan shall be specified in the security instrument with respect to such loan and shall not exceed 60 percent of the value of such real estate security therefor as of the completion of such development. Any such loan shall be repayable within 3 years and the interest on any such loan shall be payable at least semiannually. The security instrument with respect to each such loan shall require development of such real estate security to be commenced not more than nine months after the date of such instrument, and shall provide that the loan is in default in the event such development has not been commenced on or before the expiration of such nine months. Notwithstanding any other provision of this section, no such loan shall exceed the principal obligation as so set forth in such security instrument, or 60 percent of the value of such real estate security therefor at the time such loan is made and prior to the commencement of the development thereof plus 60 percent of the cost of the development thereof, whichever is the lesser. The value of such real estate security (1) as

of the completion of such development and (2) at the time the loan is made and prior to the commencement of such development shall be determined by the association before the making of the loan, after obtaining appraisal or appraisals thereof in accordance with § 545.6-9, without regard to any provisions of § 545.6-9 relating solely to insured or guaranteed loans, and all references in this section to the value of the real estate security shall mean the respective values as so determined before the making of the loan.

(d) Disbursements. No Federal association shall (1) before commencement of the development of the real estate security for a loan made pursuant to the provisions of this section disburse from the proceeds of such loan an amount equal to more than 60 percent of the value of such real estate security at the time the loan is made and prior to the commencement of the development thereof, or (2) after commencement of such development and prior to the completion thereof make any disbursement of such loan proceeds when such disbursement, together with all prior disbursements, exceeds 60 percent of such value of the real estate security plus 60 percent of the cost of such development at the date of such disbursement: vided, That in no event shall more than 85 percent of the principal obligation of the loan be disbursed prior to the completion of the development of the real estate security for such loan.

Pro

(e) Establishment and maintenance of records. (1) A Federal association shall not make any loan pursuant to this section unless and until the applicant for such loan shall have executed and filed with the association a certificate stating (i) the name and address of the applicant; (ii) the name and address of the principal or principals for whose benefit the loan is sought, if the applicant is acting as an agent or nominee or in behalf of any other person, partnership, corporation, or syndicate; and (iii) if the applicant or such principal is a partnership, corporation, or syndicate, the name and address of each and every person who has an interest in or is an officer of, and the nature and extent of each such person's interest in, such partnership, corporation, or syndicate; nor until it has obtained a written report on the credit standing of the applicant and the