HOUSE BILL No. 5909


     June 20, 2000, Introduced by Reps. Sanborn, Wojno, Shackleton, Hager, Mortimer, Van Woerkom, Bishop, DeVuyst, Rick
Johnson, Daniels, Hale, Thomas, Bob Brown, Patterson, Julian, Ehardt, Bisbee, Law, Clark, Richner, O'Neil, Jansen and Basham and
referred to the Committee on Insurance and Financial Services.


        A bill to amend 1996 PA 354, entitled

   "Savings bank act,"

   by amending sections 303, 307, 313, 314, 316, 317, 321, 322, 324,

   325, 326, 334, 335, 336, 401, 409, 412, 413, 417, 422, 428, 430,

   432, 508, 701, 703, 705, 706, 708, 709, 710, 711, 712, 713, and

   804 (MCL 487.3303, 487.3307, 487.3313, 487.3314, 487.3316,

   487.3317, 487.3321, 487.3322, 487.3324, 487.3325, 487.3326,

   487.3334, 487.3335, 487.3336, 487.3401, 487.3409, 487.3412,

   487.3413, 487.3417, 487.3422, 487.3428, 487.3430, 487.3432,

   487.3508, 487.3701, 487.3703, 487.3705, 487.3706, 487.3708,

   487.3709, 487.3710, 487.3711, 487.3712, 487.3713, and 487.3804),

   section 401 as amended by 1996 PA 422, section 422 as amended by

   2000 PA 63, and section 508 as amended by 1997 PA 50, and by

   adding sections 330a, 340, 501, 711a, and 712a; and to repeal

   acts and parts of acts.


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               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 1
           Sec. 303.  (1)  Any number of depository institutions may

 2
      apply to incorporate a savings bank exclusively to serve deposi-

 3
      tory institutions or their officers, directors, and employees. 

 4
      ANY NUMBER OF DEPOSITORY INSTITUTIONS MAY APPLY TO ORGANIZE A

 5
      SAVINGS BANK EXCLUSIVELY TO SERVE DEPOSITORY INSTITUTIONS OR

 6
      THEIR OFFICERS, DIRECTORS, EMPLOYEES, AND AFFILIATES.

 7
           (2) ANY NUMBER OF DEPOSITORY INSTITUTIONS MAY APPLY TO ORGA-

 8
      NIZE A SAVINGS BANK TO ENGAGE EXCLUSIVELY IN PROVIDING TRUST

 9
      SERVICES AND OTHER SERVICES AS MAY BE AUTHORIZED BY ORDER OR

10
      DECLARATORY RULING OF THE COMMISSIONER.

11
           (3) A DEPOSITORY INSTITUTION MAY APPLY TO THE COMMISSIONER

12
      FOR PERMISSION TO ORGANIZE A SAVINGS BANK UNDER THIS SECTION.

13
      THE APPLICATION SHALL BE IN THE FORM PRESCRIBED BY THE COMMIS-

14
      SIONER AND SET FORTH THE INFORMATION THE COMMISSIONER REQUIRES.

15
           (4)  (2)  The commissioner shall examine the information

16
      contained in the application and make any other investigation the

17
      commissioner considers necessary pertaining to the organization

18
      of the new savings bank.  The commissioner shall issue to the

19
      applicants, within the time period provided in section 214, writ-

20
      ten notice of approval or disapproval of the application.

21
           (5)  (3)  Except as otherwise provided by rule, a savings

22
      bank organized under this section is not subject to the provi-

23
      sions of section 302, but shall comply with all other provisions

24
      of this act.






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 1
           (6)  (4)  The shares of stock of a stock savings bank

 2
      organized under this section shall be owned exclusively by

 3
      depository institutions.

 4
           (7)  (5)  As used in this section, "applicant" means the

 5
      depository institutions making an application under this

 6
      section.

 7
            (6) The commissioner may promulgate rules under the admin-

 8
      istrative procedures act of 1969, Act No. 306 of the Public Acts

 9
      of 1969, being sections 24.201 to 24.328 of the Michigan Compiled

10
      Laws, to implement and enforce this section. 

11
           Sec. 307.  (1) A stock savings bank organized under this act

12
      shall have capital in an amount as the commissioner considers

13
      adequate.  on the basis of the population of the area to be

14
      served and the anticipated nature of the stock savings bank's

15
      business but not less than $100,000.00. 

16
           (2) This section does not apply if the new stock savings

17
      bank is organized under section 706 for the sole purpose of

18
      effecting its consolidation or merger with an existing bank or

19
      association having its principal office in the same city or vil-

20
      lage as the new stock savings bank and if upon completion of the

21
      consolidation or merger a bank holding company becomes the owner

22
      of all of the outstanding voting shares of the consolidated

23
      organization.  This section does apply to the consolidated

24
      organization.

25
           (3) A stock savings bank shall not be authorized to commence

26
      business until it has surplus of at least 20% of its capital.





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 1
           (4)  A mutual savings bank shall not be authorized to

 2
      commence business until an aggregate minimum dollar amount and

 3
      number of savings accounts shall be subscribed for and paid in

 4
      cash, as determined by the commissioner.  A MUTUAL SAVINGS BANK

 5
      SHALL NOT BE AUTHORIZED TO COMMENCE BUSINESS UNTIL:

 6
           (A) AN AGGREGATE MINIMUM DOLLAR AMOUNT AND NUMBER OF SAVINGS

 7
      ACCOUNTS SHALL BE SUBSCRIBED FOR AND PAID IN CASH, AS DETERMINED

 8
      BY THE COMMISSIONER.

 9
           (B) THE COMMISSIONER SHALL HAVE RECEIVED CONFIRMATION FROM

10
      THE FEDERAL DEPOSIT INSURANCE CORPORATION THAT THE ACCOUNTS OF

11
      THE MUTUAL SAVINGS BANK WILL BE INSURED BY THE FEDERAL DEPOSIT

12
      INSURANCE CORPORATION.

13
           (5) After organization each savings bank shall maintain ade-

14
      quate total capital for the conduct of its business and the pro-

15
      tection of its depositors.  The total capital of a savings bank

16
      shall be analyzed and appraised in relation to the character of

17
      its management, the liquidity of assets, history of earnings and

18
      of the retention of earnings, the potential volatility of the

19
      deposit structure, ITS RISK MANAGEMENT, and the savings bank's

20
      capacity to furnish the broadest service to the public.

21
           (6) At all times a stock savings bank shall maintain surplus

22
      in an amount which is equal to at least the amount of its capi-

23
      tal, except as provided in subsection (3) as to the initial sur-

24
      plus and except as provided in section 316 and shall not reduce

25
      surplus without the approval of the commissioner.

26
           Sec. 313.  (1) There shall be issued to every shareholder

27
      in a savings bank, certificates of stock which shall be



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 1
      transferable on the books of the savings bank in a manner as

 2
      provided in the bylaws or articles of incorporation.  A transfer

 3
      of stock shall not be valid against the savings bank, except with

 4
      the consent of the board of directors, unless the registered

 5
      holder of the stock is liable as principal debtor, surety, or

 6
      otherwise to the savings bank for any debt which is due and

 7
      unpaid.

 8
           (2) If the registered holder of stock of a savings bank is

 9
      liable to it as principal debtor, surety, or otherwise for a debt

10
      that is due and unpaid, the directors of the bank may sell a suf-

11
      ficient amount of the stock of the delinquent shareholder in the

12
      same manner and with the same effect as provided in section 501

13
      in the case of an unpaid assessment on the stock of the savings

14
      bank.  This section does not prevent the savings bank from bring-

15
      ing proceedings to recover the entire amount of the indebtedness

16
      at any time before the sale or to recover the balance of the debt

17
      and costs after the proceeds of sale have been applied against

18
      the debt and costs or to recover the balance of the debt after

19
      the cancellation of the stock.

20
           (3) The rights of a savings bank in its stock under this

21
      section shall be subject to any pledge, sale, or other transfer

22
      of the stock that is made prior to the maturity of any indebted-

23
      ness of the registered holder of the stock to the savings bank

24
      and of that the savings bank has knowledge prior to the maturity,

25
      whether or not the stock was transferred on the books of the sav-

26
      ings bank.  Any stock of a savings bank that is pledged, sold, or

27
      otherwise transferred prior to the maturity of any indebtedness



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 1
      of the registered holder of the stock to the savings bank and of

 2
      which pledge, sale, or other transfer the savings bank has knowl-

 3
      edge prior to the maturity, may be transferred on the books of

 4
      the savings bank after the maturity without the consent of the

 5
      board of directors of the savings bank.

 6
           (4) The rights of a savings bank in its stock under this

 7
      section, including the limitation on transferability if the reg-

 8
      istered holder is liable to the savings bank for any debt that is

 9
      due and unpaid, shall not be applicable with respect to any stock

10
      duly listed on any stock exchange.

11
           (5) Certificates issued shall state all of the following:

12
           (a) The name and location of the savings bank.

13
           (b) The name of the holder of record of the stock.

14
           (c) The number, par value, and class of shares that the cer-

15
      tificates represent.

16
           (d) If the savings bank issues stock of more than 1 class,

17
      the respective rights, preferences, privileges, voting rights,

18
      powers, restrictions, limitations, and qualifications of each

19
      class of stock issued shall be stated in full or in summary upon

20
      the front or back of the certificates or be incorporated by a

21
      reference to the articles of incorporation set forth on the front

22
      of the certificates.

23
           (e) If the stock is not listed on an exchange, that no

24
      transfer shall be valid against the savings bank so long as the

25
      registered holder is liable as principal debtor, surety, or oth-

26
      erwise to the savings bank, except with the approval of the board

27
      of directors or except as otherwise provided in this act.



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 1
           (6) Every certificate issued shall be signed by the

 2
      president or vice president and cashier or assistant cashier of

 3
      the savings bank or by other officers as the bylaws of the sav-

 4
      ings bank shall provide and shall be sealed with the seal of the

 5
      savings bank.

 6
           (7) Notwithstanding any law, if a share certificate is

 7
      signed by a transfer agent or by a transfer agent and a regis-

 8
      trar, the signature of any officers of the savings bank required

 9
      on the stock or the seal of the savings bank may be made by

10
      facsimile.  If an officer who has signed a share certificate or

11
      whose facsimile signature is used ceases to be an officer,

12
      whether because of death, resignation, or otherwise, before the

13
      certificate has been delivered by the savings bank, the certifi-

14
      cate may be adopted by the savings bank and delivered as though

15
      the person who signed it had not ceased to be an officer. 

16
           (1) EXCEPT AS PROVIDED IN SUBSECTION (2), THE SHARES OF A

17
      SAVINGS BANK SHALL BE REPRESENTED BY CERTIFICATES OF STOCK THAT

18
      SHALL BE ISSUED TO EVERY SHAREHOLDER AND TRANSFERABLE ON THE

19
      BOOKS OF THE SAVINGS BANK IN A MANNER AS MAY BE PRESCRIBED IN THE

20
      BYLAWS OR ARTICLES OF INCORPORATION.  A TRANSFER OF STOCK SHALL

21
      NOT BE VALID AGAINST THE SAVINGS BANK, EXCEPT WITH THE CONSENT OF

22
      THE BOARD OF DIRECTORS, SO LONG AS THE REGISTERED HOLDER OF THE

23
      STOCK IS LIABLE AS PRINCIPAL DEBTOR, SURETY, OR OTHERWISE TO THE

24
      SAVINGS BANK FOR ANY DEBT WHICH IS DUE AND UNPAID.

25
           (2) UNLESS THE ARTICLES OF INCORPORATION OR BYLAWS PROVIDE

26
      OTHERWISE, THE BOARD MAY AUTHORIZE THE ISSUANCE OF SOME OR ALL OF

27
      THE SHARES OF ANY OR ALL OF ITS CLASSES OR SERIES OF STOCK



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 1
      WITHOUT CERTIFICATES IF WITHIN A REASONABLE TIME AFTER ISSUANCE

 2
      OF A SHARE WITHOUT A CERTIFICATE THE SAVINGS BANK PROVIDES THE

 3
      SHAREHOLDER WITH A WRITTEN STATEMENT OF THE INFORMATION REQUIRED

 4
      ON A CERTIFICATE UNDER SUBSECTION (5).  THE AUTHORIZATION SHALL

 5
      NOT HAVE ANY EFFECT ON SHARES ALREADY REPRESENTED BY CERTIFICATES

 6
      UNLESS THEY ARE SURRENDERED TO THE SAVINGS BANK.

 7
           (3) IF THE REGISTERED HOLDER OF STOCK OF A SAVINGS BANK IS

 8
      LIABLE TO THE SAVINGS BANK AS PRINCIPAL DEBTOR, SURETY OR OTHER-

 9
      WISE FOR ANY DEBT WHICH IS DUE AND UNPAID, THE DIRECTORS OF THE

10
      SAVINGS BANK MAY SELL A SUFFICIENT AMOUNT OF THE STOCK OF THE

11
      DELINQUENT SHAREHOLDER IN THE SAME MANNER AND WITH THE SAME

12
      EFFECT AS PROVIDED IN SECTION 501.  THIS SECTION DOES NOT PREVENT

13
      THE SAVINGS BANK FROM BRINGING PROCEEDINGS TO RECOVER THE ENTIRE

14
      AMOUNT OF THE INDEBTEDNESS AT ANY TIME BEFORE THE SALE OR TO

15
      RECOVER THE BALANCE OF THE DEBT AND COSTS AFTER THE PROCEEDS OF

16
      SALE HAVE BEEN APPLIED AGAINST THE DEBT AND COSTS OR TO RECOVER

17
      THE BALANCE OF THE DEBT AFTER THE CANCELLATION OF THE STOCK.

18
           (4) EXCEPT AS PROVIDED IN SECTION 501, THE RIGHTS OF A SAV-

19
      INGS BANK IN ITS STOCK IN WHICH THE SHAREHOLDER IS LIABLE TO THE

20
      BANK AS PRINCIPAL DEBTOR, SURETY, OR OTHERWISE IS SUBJECT TO ANY

21
      PLEDGE, SALE, OR OTHER TRANSFER OF THE STOCK THAT IS MADE BEFORE

22
      THE MATURITY OF AN INDEBTEDNESS OF THE REGISTERED HOLDER OF THE

23
      STOCK TO THE SAVINGS BANK AND OF WHICH THE SAVINGS BANK HAS

24
      KNOWLEDGE BEFORE THE MATURITY, WHETHER OR NOT THE STOCK WAS

25
      TRANSFERRED ON THE BOOKS OF THE SAVINGS BANK.  ANY STOCK OF A

26
      SAVINGS BANK THAT IS PLEDGED, SOLD, OR OTHERWISE TRANSFERRED

27
      BEFORE THE MATURITY OF ANY INDEBTEDNESS OF THE REGISTERED HOLDER



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 1
      OF THE STOCK TO THE SAVINGS BANK AND OF WHICH PLEDGE, SALE, OR

 2
      OTHER TRANSFER THE SAVINGS BANK HAS KNOWLEDGE BEFORE THE MATURI-

 3
      TY, MAY BE TRANSFERRED ON THE BOOKS OF THE SAVINGS BANK AFTER THE

 4
      MATURITY WITHOUT THE CONSENT OF THE BOARD OF DIRECTORS OF THE

 5
      SAVINGS BANK.

 6
           (5) THE RIGHTS OF A SAVINGS BANK IN ITS STOCK UNDER THIS

 7
      SECTION, INCLUDING THE LIMITATION ON TRANSFERABILITY IF THE REG-

 8
      ISTERED HOLDER IS LIABLE TO THE SAVINGS BANK FOR ANY DEBT THAT IS

 9
      DUE AND UNPAID, SHALL NOT BE APPLICABLE WITH RESPECT TO ANY STOCK

10
      DULY LISTED ON ANY STOCK EXCHANGE.

11
           (6) EACH CERTIFICATE ISSUED AFTER THE EFFECTIVE DATE OF THE

12
      AMENDATORY ACT THAT ADDED SUBSECTION (8) SHALL STATE ALL OF THE

13
      FOLLOWING:

14
           (A) THE NAME AND ADDRESS OF THE PRINCIPAL OFFICE OF THE SAV-

15
      INGS BANK.

16
           (B) THE NAME OF THE HOLDER OF RECORD OF THE STOCK IT

17
      REPRESENTS.

18
           (C) THE NUMBER, PAR VALUE, CLASS, AND SERIES OF SHARES WHICH

19
      THE CERTIFICATE REPRESENTS.

20
           (D) THE RESPECTIVE VOTING, DISTRIBUTION, DIVIDEND, LIQUIDA-

21
      TION, DISSOLUTION, AND OTHER RIGHTS, PREFERENCES, AND LIMITATIONS

22
      OF THE STOCK ISSUED, WHICH INFORMATION SHALL BE STATED IN FULL OR

23
      IN SUMMARY UPON THE FRONT OR BACK OF THE CERTIFICATE OR SHALL BE

24
      INCORPORATED BY A REFERENCE TO THE ARTICLES OF INCORPORATION SET

25
      FORTH ON THE FRONT OF THE CERTIFICATE.

26
           (E) IF THE STOCK IS NOT LISTED, THAT NO TRANSFER OF THE

27
      STOCK SHALL BE VALID AGAINST THE SAVINGS BANK SO LONG AS THE



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 1
      REGISTERED HOLDER IS LIABLE AS PRINCIPAL DEBTOR, SURETY, OR

 2
      OTHERWISE TO THE SAVINGS BANK, EXCEPT WITH THE APPROVAL OF THE

 3
      BOARD OF DIRECTORS OR AS OTHERWISE PROVIDED IN THIS ACT.

 4
           (F) THE SIGNATURE OF THE PRESIDENT OR OTHER OFFICER AS PRO-

 5
      VIDED BY THE BYLAWS OF THE SAVINGS BANK AND, OPTIONALLY, THE SEAL

 6
      OF THE SAVINGS BANK.

 7
           (7) ALL OF THE FOLLOWING MAY BE A FACSIMILE:

 8
           (A) THE SIGNATURE OF A TRANSFER AGENT.

 9
           (B) THE SIGNATURE OF A REGISTRAR.

10
           (C) THE SIGNATURE OF AN OFFICER OF THE SAVINGS BANK.

11
           (D) THE SEAL OF THE SAVINGS BANK.

12
           (8) IF AN OFFICER WHO HAS SIGNED A SHARE CERTIFICATE OR

13
      WHOSE FACSIMILE SIGNATURE HAS BEEN USED ON A SHARE CERTIFICATE

14
      CEASES TO BE AN OFFICER, WHETHER BECAUSE OF DEATH, RESIGNATION,

15
      OR OTHERWISE, BEFORE THE CERTIFICATE HAS BEEN DELIVERED BY THE

16
      SAVINGS BANK, THE CERTIFICATE, NEVERTHELESS, MAY BE ADOPTED BY

17
      THE SAVINGS BANK AND DELIVERED AS THOUGH THE PERSON WHO SIGNED IT

18
      OR WHOSE FACSIMILE SIGNATURE HAS BEEN USED ON THE STOCK HAD NOT

19
      CEASED TO BE AN OFFICER.

20
           Sec. 314.  (1) With the approval of the commissioner, and

21
      by a vote of shareholders owning 2/3 of each class of the stock

22
      entitled to vote, a savings bank may increase its capital stock

23
      to any sum approved by the commissioner, either by an increase in

24
      the par value of the existing stock or by the issuance of new

25
      stock, including preferred stock.

26
           (2) An increase in capital is not valid until the whole

27
      amount of the increase is paid in and notice has been transmitted



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 1
      to the commissioner specifying the amount of the increase in

 2
      capital stock and that it has been duly paid in as a part of the

 3
      capital of the savings bank.

 4
           (3) The certificate shall be conclusive evidence that the

 5
      stock has been duly and validly issued.  In the case of the issu-

 6
      ance of new stock, in voting upon the increase of capital stock,

 7
      the shareholders entitled to vote shall have power, by the same

 8
      statutory majority, to fix the value of, and the price at which

 9
      the increase of the capital stock shall be subscribed and paid

10
      for by the shareholders, but not less than par, as well as the

11
      time and manner of the subscription and payment, and to authorize

12
      the directors to sell the capital stock.

13
           (4) Notwithstanding the provisions of this section, a sav-

14
      ings bank, with the approval of the commissioner and by a vote of

15
      shareholders owning 2/3 of each class of the stock entitled to

16
      vote, for the stated purpose of providing stock options for 1 or

17
      more employees, may increase its capital stock in an aggregate

18
      par value amount not to exceed at any 1 time 5% of the par value

19
      of its then outstanding common capital stock.  The additional

20
      capital stock, when duly authorized, may be issued by the savings

21
      bank from time to time for such purpose but for no other purpose,

22
      as options are exercised and payment for the stock is received,

23
      free from any preemptive rights to subscribe for stock. 

24
           (1) BY A VOTE OF SHAREHOLDERS OWNING 2/3 OF EACH CLASS OF

25
      THE STOCK ENTITLED TO VOTE, A SAVINGS BANK MAY AMEND ITS ARTICLES

26
      TO INCREASE ITS CAPITAL STOCK TO ANY SUM APPROVED BY THE





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 1
      COMMISSIONER, EITHER BY AN INCREASE IN THE PAR VALUE OF

 2
      AUTHORIZED STOCK OR BY THE AUTHORIZATION OF NEW STOCK.

 3
           (2) AN INCREASE IN CAPITAL SHALL NOT BE VALID UNTIL THE

 4
      WHOLE AMOUNT OF THE INCREASE HAS BEEN PAID IN, NOTICE OF THE PAY-

 5
      MENT SIGNED BY AN OFFICER OF THE SAVINGS BANK HAS BEEN TRANSMIT-

 6
      TED TO THE COMMISSIONER, AND THE COMMISSIONER'S CERTIFICATE OF

 7
      APPROVAL HAS BEEN OBTAINED SPECIFYING THE AMOUNT OF THE INCREASE

 8
      IN CAPITAL AND THAT IT HAS BEEN DULY PAID IN AS A PART OF THE

 9
      CAPITAL OF THE SAVINGS BANK.  THE CERTIFICATE SHALL BE CONCLUSIVE

10
      EVIDENCE THAT THE STOCK HAS BEEN DULY AND VALIDLY ISSUED.

11
           (3) IN THE CASE OF THE ISSUANCE OF NEW STOCK, IN VOTING UPON

12
      THE INCREASE OF CAPITAL STOCK, 2/3 OF THE SHAREHOLDERS ENTITLED

13
      TO VOTE SHALL HAVE POWER TO FIX THE VALUE OF, AND THE PRICE AT

14
      WHICH THE STOCK SHALL BE SUBSCRIBED AND PAID FOR BY THE SHARE-

15
      HOLDERS, BUT NOT LESS THAN PAR, AS WELL AS THE TIME AND MANNER OF

16
      THE SUBSCRIPTION AND PAYMENT, AND TO AUTHORIZE THE DIRECTORS TO

17
      SELL THE STOCK.

18
           (4) NOTWITHSTANDING THIS SECTION, A SAVINGS BANK, WITH THE

19
      APPROVAL OF THE COMMISSIONER AND BY A VOTE OF SHAREHOLDERS OWNING

20
      2/3 OF EACH CLASS OF THE STOCK ENTITLED TO VOTE, FOR THE STATED

21
      PURPOSE OF PROVIDING STOCK OPTIONS FOR 1 OR MORE EMPLOYEES OR

22
      DIRECTORS, MAY INCREASE ITS CAPITAL STOCK IN AN AGGREGATE PAR

23
      VALUE AMOUNT NOT TO EXCEED AT ANY 1 TIME 5% OF THE PAR VALUE OF

24
      ITS THEN OUTSTANDING COMMON STOCK.  THE ADDITIONAL STOCK, WHEN

25
      DULY AUTHORIZED, MAY BE ISSUED BY THE SAVINGS BANK FROM TIME TO

26
      TIME FOR THIS PURPOSE BUT FOR NO OTHER PURPOSE, AS OPTIONS ARE





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 1
      EXERCISED AND PAYMENT FOR THE STOCK IS RECEIVED, FREE FROM ANY

 2
      PREEMPTIVE RIGHTS TO SUBSCRIBE FOR STOCK.

 3
           Sec. 316.  (1) The board of directors of a savings bank may

 4
      declare and pay dividends on the common stock of the savings bank

 5
      subject to the following restrictions:

 6
           (a) A cash dividend or dividend in kind shall not be

 7
      declared or paid unless the savings bank will have a surplus

 8
      amounting to not less than 20% of its capital after the payment

 9
      of the dividend.

10
           (b) A cash dividend or dividend in kind shall not be

11
      declared by any savings bank except out of net  profits  INCOME

12
      then on hand after deducting all bad debts.  Unless the debts are

13
      well secured and in process of collection or the debts constitute

14
      claims against solvent estates in probate, debts due the savings

15
      bank on which interest is past due and unpaid for a period of 6

16
      months shall be considered bad debts under this section.

17
           (c) A cash dividend or dividend in kind shall not be

18
      declared or paid until the cumulative dividends on preferred

19
      stock, if any, have been paid in full or preferred shareholders

20
      have waived their right to receive dividends.

21
           (d) If the surplus of a savings bank is less than the amount

22
      of its capital, before the declaration of a cash dividend or div-

23
      idend in kind, it shall transfer to surplus not less than 10% of

24
      its net  profits  INCOME of the preceding half-year in the case

25
      of quarterly or semiannual dividends, or not less than 10% of its

26
      net  profits  INCOME of the preceding 2 consecutive half-year

27
      periods in the case of annual dividends.  For the purpose of this



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 1
      section, an amount transferred to a  reserve account  FUND for

 2
      the retirement of preferred stock of  any  THE SAVINGS bank out

 3
      of its net  profits  INCOME for the periods is considered to be

 4
      additions to its surplus, if upon the retirement of the preferred

 5
      stock the amounts credited into the retirement  reserve  FUND may

 6
      then properly be carried to surplus.  The savings bank is obli-

 7
      gated to credit to surplus the amounts transferred into the

 8
      retirement  reserve  FUND on account of the preferred stock as

 9
      the stock is retired.

10
           (e) Notwithstanding the limitations of this section, a sav-

11
      ings bank with the approval of the commissioner and by vote of

12
      shareholders owning 2/3 of the stock entitled to vote may

13
      increase its capital stock by declaration of a stock dividend on

14
      the capital stock.  After the increase the surplus of the bank

15
      shall be at least equal to 20% of the capital stock as

16
      increased.  The increase shall not be effective until a certifi-

17
      cate of the declaration of the dividend, signed by the president,

18
      vice president, cashier, or assistant cashier of the savings

19
      bank, has been transmitted to and approved by the commissioner. 

20
           (2) A savings bank may pay dividends on its preferred stock

21
      at a rate as may be applicable without regard to the limitations

22
      of this section.

23
           (3) A holding company that owns common or preferred stock of

24
      a savings bank may waive its right to receive dividends and any

25
      payment in lieu of dividends.







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 1
           (4) DIVIDENDS PAID TO SHAREHOLDERS UNDER A DIVIDEND

 2
      REINVESTMENT PLAN SHALL BE SUBJECT TO THIS ACT REGARDING THE

 3
      PAYMENT OF DIVIDENDS.

 4
           Sec. 317.  (1) An annual meeting of the members of a mutual

 5
      savings bank shall be held at a time and place designated by or

 6
      in the manner provided in the bylaws.

 7
           (2) Special meetings of the members of a mutual savings bank

 8
      may be called at any time by the president or board of directors

 9
      or by the president, a vice president, or the secretary upon the

10
      written request of members holding of record in the aggregate at

11
      least 10% of the savings deposits of the savings bank.  The writ-

12
      ten request shall show the purposes of the meeting and shall be

13
      delivered to the principal office of the mutual savings bank

14
      addressed to the president.

15
           (3) In the consideration of all questions requiring action

16
      by the members of a mutual savings bank, each member shall be

17
      entitled to  cast 1 vote for each $100.00, or fraction of each

18
      $100.00, of the withdrawal value of his or her deposit account.

19
      A member is not entitled to cast more than 1,000 votes, and votes

20
      shall not be cumulated for the election of directors.  THE NUMBER

21
      OF VOTES SET FORTH IN THE SAVINGS BANK'S CHARTER.  THE SAVINGS

22
      BANK CHARTER MAY PROVIDE BETWEEN 1 AND 1,000 VOTES PER MEMBER AND

23
      MAY FURTHER PROVIDE THAT EACH MEMBER SHALL BE PERMITTED TO CAST 1

24
      VOTE FOR EACH $100.00, OR FRACTION THEREOF, OF THE WITHDRAWAL

25
      VALUE OF HIS OR HER DEPOSIT ACCOUNT.

26
           (4) In order that a mutual savings bank may determine the

27
      members entitled to notice of any meeting to vote, or entitled to



   03942'99 *
                                  16

 1
      receive a distribution or to exercise any rights in respect of

 2
      any other lawful action, the board of directors of the savings

 3
      bank may fix, in advance, a record date that is not more than 9

 4
      months or less than 6 months prior to the date of the meeting or

 5
      more than 9 months prior to any other action.

 6
           Sec. 321.  (1) A stock savings bank shall keep and maintain

 7
      a stock ledger in which shall be correctly entered the name and

 8
      address of each shareholder of the savings bank, the number of

 9
      shares held by each, the date when the shareholder acquired the

10
      shares, and the name of the transferor.  The board of directors

11
      of a savings bank may designate any corporation authorized by law

12
      to act as transfer agent or registrar of shares of corporations,

13
      to act as transfer agent or transfer agent and registrar of the

14
      shares of the savings bank, but a corporation shall not be desig-

15
      nated to act in both capacities at the same time.

16
           (2)  Within 2 calendar weeks of a  UPON demand made by the

17
      commissioner, a savings bank shall file with the commissioner a

18
      list containing the name and address of each shareholder of the

19
      savings bank together with the number of shares held by each

20
      according to its records as of the close of business on the date

21
      of issuance of the demand.  Within 2 calendar weeks of a demand

22
      made for proper cause by any shareholder being the record owner

23
      of at least 5% of the issued shares of the savings bank or on the

24
      demand for proper cause of any person representing any group who

25
      are the record owners of at least 5% of the issued shares of the

26
      savings bank, the savings bank shall prepare and furnish the

27
      requestor a list containing the name and address of each



   03942'99 *
                                  17

 1
      shareholder of the savings bank together with the number of

 2
      shares held by each according to its records as of the close of

 3
      business on the date of receipt of the demand. 

 4
           (3) WITHIN 2 CALENDAR WEEKS OF ANY DEMAND MADE FOR A PURPOSE

 5
      REASONABLY RELATED TO THE REQUESTER'S INTEREST AS A SHAREHOLDER

 6
      OR AS A REPRESENTATIVE OF A GROUP OF SHAREHOLDERS BY ANY SHARE-

 7
      HOLDER BEING THE RECORD OWNER OF AT LEAST 5% OF THE ISSUED SHARES

 8
      OF THE SAVINGS BANK OR BY ANY PERSON REPRESENTING ANY GROUP WHO

 9
      ARE THE RECORD OWNERS OF AT LEAST 5% OF THE ISSUED SHARES OF THE

10
      SAVINGS BANK, THE SAVINGS BANK SHALL PREPARE AND FURNISH THE

11
      REQUESTOR A LIST CONTAINING THE NAME AND ADDRESS OF EACH SHARE-

12
      HOLDER OF THE SAVINGS BANK TOGETHER WITH THE NUMBER OF SHARES

13
      HELD BY EACH ACCORDING TO ITS RECORDS AS OF THE CLOSE OF BUSINESS

14
      ON THE DATE OF RECEIPT OF THE DEMAND.

15
           Sec. 322.  (1) A savings bank shall be managed by a board of

16
      not less than 5 nor more than 25 directors who shall be elected

17
      in the first instance by the incorporators at a meeting held

18
      before the savings bank is authorized to commence business and

19
      afterwards at the annual meeting of the members or shareholders.

20
      If for any reason an election is not held at the annual meeting,

21
      then the election shall be held at any subsequent meeting called

22
      for that purpose of which notice is given as provided in the

23
      bylaws of the savings bank.  The board of directors may fill a

24
      vacancy that occurs in the board by death, resignation, or other-

25
      wise for the  current year  UNEXPIRED TERM.  Subject to limita-

26
      tions as to numbers, the shareholders or members may elect

27
      directors not to exceed 2 less than the full board and the



   03942'99 *
                                  18

 1
      unfilled directorships shall be considered as vacancies and

 2
      filled by the board of directors.  Directors shall hold office

 3
      until their successors are elected and have qualified.

 4
           (2) THE BYLAWS OF THE SAVINGS BANK SHALL PROVIDE FOR THE

 5
      SHAREHOLDER ELECTION OF DIRECTORS IN 1 OF THE FOLLOWING METHODS:

 6
           (A) THE SHAREHOLDERS ANNUALLY MAY ELECT THE FULL BOARD OF

 7
      DIRECTORS.

 8
           (B) THE SHAREHOLDERS ANNUALLY MAY ELECT A BOARD OF DIRECTORS

 9
      WITH NOT MORE THAN 2 UNFILLED DIRECTORSHIPS.  THE UNFILLED DIREC-

10
      TORSHIPS ARE CONSIDERED VACANCIES TO BE FILLED BY THE BOARD OF

11
      DIRECTORS.

12
           (C) THE SHAREHOLDERS MAY ELECT DIRECTORS WITH STAGGERED

13
      TERMS OF OFFICE AS PROVIDED FOR IN SUBSECTION (3).

14
           (3) THE ELECTION OF DIRECTORS WITH STAGGERED TERMS OF OFFICE

15
      SHALL BE PROVIDED FOR IN THE BYLAWS OF THE SAVINGS BANK AS

16
      FOLLOWS:

17
           (A) THAT THE DIRECTORS WILL BE DIVIDED INTO 2 OR 3 CLASSES,

18
      EACH TO BE AS NEARLY EQUAL IN NUMBER AS POSSIBLE.

19
           (B) THE TERM OF OFFICE OF DIRECTORS IN THE FIRST CLASS SHALL

20
      EXPIRE AT THE FIRST ANNUAL MEETING OF SHAREHOLDERS AFTER THEIR

21
      ELECTION, THAT OF THE SECOND CLASS SHALL EXPIRE AT THE SECOND

22
      ANNUAL MEETING AFTER THEIR ELECTION, AND THAT OF THE THIRD CLASS,

23
      IF ANY, SHALL EXPIRE AT THE THIRD ANNUAL MEETING AFTER THEIR

24
      ELECTION.

25
           (C) AT EACH ANNUAL MEETING AFTER THE CLASSIFICATION ESTAB-

26
      LISHED UNDER SUBDIVISION (B), A NUMBER OF DIRECTORS EQUAL TO THE

27
      NUMBER OF THE CLASS WHOSE TERM EXPIRES AT THE TIME OF THE MEETING



   03942'99 *
                                  19

 1
      SHALL BE ELECTED TO HOLD OFFICE UNTIL THE SECOND SUCCEEDING

 2
      ANNUAL MEETING IF THERE ARE 2 CLASSES, OR UNTIL THE THIRD SUC-

 3
      CEEDING ANNUAL MEETING IF THERE ARE 3 CLASSES.

 4
           (4)  (2)  The board of directors shall meet not less than 6

 5
      times per year, IN PERSON OR BY MEANS OF ELECTRONIC COMMUNICATION

 6
      DEVICES THAT ENABLE ALL PARTICIPANTS IN A MEETING TO COMMUNICATE

 7
      WITH EACH OTHER, for the purpose of carrying out their duties

 8
      under this act.  The directors shall designate the savings bank's

 9
      chief executive officer at the first board of directors meeting

10
      of each fiscal year.  The board shall keep and record minutes of

11
      each meeting.  The minutes shall be signed by the presiding offi-

12
      cer and the secretary of the meeting.  A majority of the board of

13
      directors constitutes a quorum for the transaction of business.

14
           (5)  (3)  The commissioner may call a meeting of the board

15
      of directors of a savings bank by giving a notice of the time,

16
      place, and purpose of the meeting at least 3 days prior to the

17
      meeting to the directors either by personal service, registered

18
      mail sent to their last known addresses as shown by the books of

19
      the savings bank, or publication at least once in each week for 4

20
      consecutive weeks prior to the meeting.

21
           Sec. 324.  (1) A savings bank may contract for or purchase

22
      from a director, or from a firm of which the director is a

23
      member, securities or other property when the purchase is made in

24
      the regular course of business upon terms not less favorable to

25
      the savings bank than those offered by others, or when the pur-

26
      chase is authorized by a majority of the board of directors not

27
      interested in the sale of the securities or property.  If a



   03942'99 *
                                  20

 1
      director, or firm of which the director is a member, acting for

 2
      or on behalf of others, sells securities or other property to a

 3
      savings bank, the commissioner may require a full disclosure to

 4
      be made on forms prescribed by the commissioner of all commis-

 5
      sions or other considerations received.  Whenever a director or

 6
      firm sells securities or other property to the savings bank, the

 7
      commissioner may require full disclosure of all profits realized

 8
      from the sale.

 9
           (2) A savings bank may sell securities or other property to

10
      a director, or to a firm of which the director is a member, in

11
      the regular course of business on terms not more favorable to the

12
      director or firm than those offered to others, when the sale is

13
      authorized by a majority of the board of directors of a savings

14
      bank.  This section shall not be construed as authorizing a sav-

15
      ings bank to purchase or sell securities or other property that

16
      the savings bank is not otherwise authorized by law to purchase

17
      or sell. 

18
           (1) A SAVINGS BANK MAY CONTRACT FOR, OR PURCHASE FROM, ANY

19
      OF ITS DIRECTORS, OR FROM ANY PERSON OF WHICH ANY OF THE SAVINGS

20
      BANK'S DIRECTORS IS AN OFFICER, DIRECTOR, MANAGER, OWNER, EMPLOY-

21
      EE, OR AGENT, ANY SECURITIES OR OTHER PROPERTY, ONLY WHEN THE

22
      PURCHASE IS MADE IN THE ORDINARY COURSE OF BUSINESS UPON TERMS

23
      NOT LESS FAVORABLE TO THE SAVINGS BANK THAN THOSE OFFERED BY

24
      OTHERS, AND THE PURCHASE IS AUTHORIZED BY A MAJORITY OF THE BOARD

25
      OF DIRECTORS NOT INTERESTED IN THE SALE OF THE SECURITIES OR

26
      PROPERTY EVIDENCED BY THEIR AFFIRMATIVE VOTE OR WRITTEN ASSENT.

27
      IF A DIRECTOR, OR PERSON OF WHICH ANY DIRECTOR IS AN OFFICER,



   03942'99 *
                                  21

 1
      DIRECTOR, MANAGER, OWNER, EMPLOYEE, OR AGENT, ACTING FOR OR ON

 2
      BEHALF OF OTHERS, SELLS SECURITIES OR OTHER PROPERTY TO A SAVINGS

 3
      BANK, THE COMMISSIONER MAY REQUIRE A FULL DISCLOSURE TO BE MADE

 4
      OF ALL COMMISSIONS OR OTHER CONSIDERATIONS RECEIVED.  IF A DIREC-

 5
      TOR OR PERSON, ACTING IN HIS, HER, OR ITS OWN BEHALF, SELLS

 6
      SECURITIES OR OTHER PROPERTY TO THE SAVINGS BANK, THE COMMIS-

 7
      SIONER MAY REQUIRE A FULL DISCLOSURE OF ALL PROFITS REALIZED FROM

 8
      THE SALE.

 9
           (2) A SAVINGS BANK MAY SELL SECURITIES OR OTHER PROPERTY TO

10
      ANY OF ITS DIRECTORS, OR TO AN ENTITY OF WHICH ANY OF ITS DIREC-

11
      TORS IS AN OFFICER, DIRECTOR, MANAGER, OWNER, EMPLOYEE, OR AGENT

12
      IN THE ORDINARY COURSE OF BUSINESS ON TERMS NOT MORE FAVORABLE TO

13
      THE DIRECTOR OR PERSON THAN THOSE OFFERED TO OTHERS, WHEN THE

14
      SALE IS AUTHORIZED BY A MAJORITY OF THE BOARD OF DIRECTORS OF A

15
      SAVINGS BANK EVIDENCED BY THEIR AFFIRMATIVE VOTE OR WRITTEN

16
      ASSENT.

17
           (3) THIS SECTION SHALL NOT BE CONSTRUED AS AUTHORIZING SAV-

18
      INGS BANKS TO PURCHASE OR SELL SECURITIES OR OTHER PROPERTY THAT

19
      SAVINGS BANKS ARE NOT OTHERWISE AUTHORIZED BY LAW TO PURCHASE OR

20
      SELL.

21
           Sec. 325.  (1) A director or an officer of a savings bank

22
      shall discharge the duties of his or her position in good faith

23
      and with that degree of diligence, care, and skill that an ordi-

24
      narily prudent person would exercise under similar circumstances

25
      in a like position.

26
           (2) In discharging his or her duties, a director or an

27
      officer when acting in good faith may rely upon the opinion of



   03942'99 *
                                  22

 1
      legal counsel for the savings bank, upon the report of an

 2
      independent appraiser selected with reasonable care by the board

 3
      or by an officer of the savings bank, or upon financial state-

 4
      ments of the savings bank represented to him or her to be correct

 5
      by the president or the officer of the savings bank having charge

 6
      of its books of account, or as stated in a written report by an

 7
      independent public or certified public accountant or firm of

 8
      accountants fairly to reflect the financial condition of the sav-

 9
      ings bank.

10
           (3) The articles of incorporation of a savings bank may con-

11
      tain a provision providing that a director is not personally

12
      liable to the savings bank or its shareholders or members for

13
      monetary damages for a breach of the director's fiduciary duty.

14
      The provision does not eliminate or limit the liability of a

15
      director for any of the following:

16
           (a) A breach of the director's duty of loyalty to the sav-

17
      ings bank or its shareholders or members.

18
           (b) Acts or omissions not in good faith or that involve

19
      intentional misconduct or knowing violation of law.

20
           (c) A violation of section 223.

21
           (d) A transaction from which the director derived an

22
      improper personal benefit.

23
           (4) An action against a director or officer for failure to

24
      perform the duties imposed by this section shall be commenced

25
      within 3 years after the cause of action has accrued, or within 2

26
      years after the time when the cause of action is discovered, or





   03942'99 *
                                  23

 1
      should reasonably have been discovered, by the complainant,

 2
      whichever occurs first.

 3
           (5) IF A DIRECTOR OR OFFICER OF A SAVINGS BANK KNOWINGLY

 4
      VIOLATES, OR KNOWINGLY PERMITS ANY OF THE AGENTS, OFFICERS,

 5
      DIRECTORS, OR EMPLOYEES OF THE SAVINGS BANK TO VIOLATE, THIS ACT,

 6
      RULES PROMULGATED UNDER THIS ACT, OR AN ORDER OR DECLARATORY

 7
      RULING OF THE COMMISSIONER, EVERY DIRECTOR AND OFFICER WHO PAR-

 8
      TICIPATED IN OR ASSENTED TO THE VIOLATION SHALL BE HELD LIABLE IN

 9
      HIS OR HER PERSONAL AND INDIVIDUAL CAPACITY FOR ALL DAMAGES THAT

10
      THE SAVINGS BANK, ANY SHAREHOLDER, OR ANY OTHER PERSON SUSTAINS

11
      AS A RESULT OF THE VIOLATION.  AN ACTION TO RECOVER DAMAGES UNDER

12
      THIS SECTION SHALL BE BROUGHT WITHIN 3 YEARS FROM THE TIME OF THE

13
      VIOLATION.

14
           (6) THE SHAREHOLDERS MAY REMOVE 1 OR MORE DIRECTORS WITH OR

15
      WITHOUT CAUSE UNLESS THE ARTICLES PROVIDE THAT DIRECTORS MAY BE

16
      REMOVED ONLY FOR CAUSE.  THE VOTE FOR REMOVAL SHALL BE BY A

17
      MAJORITY OF SHARES ENTITLED TO VOTE AT AN ELECTION OF DIRECTORS,

18
      EXCEPT THAT THE ARTICLES MAY REQUIRE A HIGHER VOTE FOR REMOVAL

19
      WITHOUT CAUSE.  THIS SUBSECTION SHALL NOT INVALIDATE ANY BYLAW

20
      ADOPTED BEFORE THE EFFECTIVE DATE OF THE AMENDATORY ACT THAT

21
      ADDED THIS SUBSECTION THAT APPLIES TO REMOVAL WITHOUT CAUSE.

22
           (7) IN THE CASE OF A SAVINGS BANK HAVING CUMULATIVE VOTING,

23
      IF LESS THAN THE ENTIRE BOARD IS TO BE REMOVED, A DIRECTOR SHALL

24
      NOT BE REMOVED IF THE VOTES CAST AGAINST HIS OR HER REMOVAL WOULD

25
      BE SUFFICIENT TO ELECT HIM OR HER IF THEN CUMULATIVELY VOTED AT

26
      AN ELECTION OF THE ENTIRE BOARD OF DIRECTORS, OR, IF THERE ARE





   03942'99 *
                                  24

 1
      CLASSES OF DIRECTORS, AT AN ELECTION OF THE CLASS OF DIRECTORS OF

 2
      WHICH HE OR SHE IS A PART.

 3
           (8) IF HOLDERS OF A CLASS OR SERIES OF STOCK ARE ENTITLED BY

 4
      THE ARTICLES TO ELECT 1 OR MORE DIRECTORS, THIS SECTION APPLIES,

 5
      WITH RESPECT TO REMOVAL OF A DIRECTOR SO ELECTED, TO THE VOTE OF

 6
      THE HOLDERS OF THE OUTSTANDING SHARES OF THAT CLASS OR SERIES OF

 7
      STOCK.

 8
           Sec. 326.  (1) A savings bank may indemnify a person who was

 9
      or is a party or is threatened to be made a party to a threat-

10
      ened, pending, or completed action, suit, or proceeding, whether

11
      civil, criminal, administrative, or investigative and whether

12
      formal or informal, other than an action by or in the right of

13
      the savings bank, or by reason of the fact that he or she is or

14
      was a director, officer, employee, or agent of the savings bank

15
      or is or was serving at the request of the savings bank as a

16
      director, officer, partner, trustee, employee, or agent of

17
      another financial institution, foreign or domestic corporation,

18
      partnership, joint venture, trust, or other enterprise, whether

19
      for profit or not, against expenses, including attorneys' fees,

20
      judgments, penalties, fines, and amounts paid in settlement actu-

21
      ally and reasonably incurred by him or her in connection with the

22
      action, suit, or proceeding if the person acted in good faith and

23
      in a manner he or she reasonably believed to be in and not

24
      opposed to the best interests of the savings bank or its members

25
      or shareholders, and in a criminal action or proceeding, if the

26
      person had no reasonable cause to believe his or her conduct was

27
      unlawful.  The termination of an action, suit, or proceeding by



   03942'99 *
                                  25

 1
      judgment, order, settlement, or conviction, or upon a plea of

 2
      nolo contendere or its equivalent, does not create a presumption

 3
      that the person did not act in good faith and in a manner that he

 4
      or she reasonably believed to be in and not opposed to the best

 5
      interests of the savings bank or its members or shareholders, and

 6
      in a criminal action or proceeding create a presumption that the

 7
      person had reasonable cause to believe that his or her conduct

 8
      was unlawful.

 9
           (2) A savings bank may indemnify a person who was or is a

10
      party to or is threatened to be made a party to any threatened,

11
      pending, or completed action or suit by or in the right of the

12
      savings bank to procure a judgment in its favor or by reason of

13
      the fact that he or she is or was a director, officer, PARTNER,

14
      TRUSTEE, employee, or agent of the savings bank or is or was

15
      serving at the request of the savings bank as a director, offi-

16
      cer, partner, trustee, employee, or agent of another financial

17
      institution, foreign or domestic corporation, partnership, joint

18
      venture, trust, or other enterprise, whether for profit or not,

19
      against expenses, including actual and reasonable attorneys' fees

20
      and amounts paid in settlement ACTUALLY AND REASONABLY incurred

21
      by the person in connection with the action or suit if the person

22
      acted in good faith and in a manner the person reasonably

23
      believed to be in and not opposed to the best interests of the

24
      savings bank or its shareholders or members.  Indemnification

25
      shall not be made for a claim, issue, or matter in which the

26
      person has been found liable to the savings bank  unless the

27
      court in which the action or suit was brought has determined upon



   03942'99 *
                                  26

 1
      application that the person is fairly and reasonably entitled to

 2
      indemnification for the expenses that the court considers proper 

 3
      EXCEPT AS AUTHORIZED IN SUBSECTION (3).

 4
           (3) A DIRECTOR, OFFICER, EMPLOYEE, OR AGENT OF THE SAVINGS

 5
      BANK WHO IS A PARTY OR THREATENED TO BE MADE A PARTY TO AN

 6
      ACTION, SUIT, OR PROCEEDING MAY APPLY FOR INDEMNIFICATION TO THE

 7
      COURT CONDUCTING THE PROCEEDING OR TO ANOTHER COURT OF COMPETENT

 8
      JURISDICTION.  ON RECEIPT OF AN APPLICATION, THE COURT AFTER

 9
      GIVING ANY NOTICE IT CONSIDERS NECESSARY MAY ORDER INDEMNIFICA-

10
      TION IF IT DETERMINES THAT THE PERSON IS FAIRLY AND REASONABLY

11
      ENTITLED TO INDEMNIFICATION IN VIEW OF ALL THE RELEVANT CIRCUM-

12
      STANCES, WHETHER OR NOT HE OR SHE MET THE APPLICABLE STANDARD OF

13
      CONDUCT SET FORTH IN THIS SECTION OR WAS ADJUDGED LIABLE, BUT IF

14
      HE OR SHE WAS ADJUDGED LIABLE, HIS OR HER INDEMNIFICATION IS

15
      LIMITED TO REASONABLE EXPENSES INCURRED.

16
           (4) TO THE EXTENT THAT A DIRECTOR, OFFICER, EMPLOYEE, OR

17
      AGENT OF A SAVINGS BANK HAS BEEN SUCCESSFUL ON THE MERITS OR OTH-

18
      ERWISE IN DEFENSE OF AN ACTION, SUIT, OR PROCEEDING DESCRIBED IN

19
      THIS SECTION, OR IN DEFENSE OF A CLAIM, ISSUE, OR MATTER IN THE

20
      ACTION, SUIT, OR PROCEEDING, HE OR SHE SHALL BE INDEMNIFIED

21
      AGAINST ACTUAL AND REASONABLE EXPENSES, INCLUDING ATTORNEY FEES,

22
      INCURRED BY HIM OR HER IN CONNECTION WITH THE ACTION, SUIT, OR

23
      PROCEEDING AND AN ACTION, SUIT, OR PROCEEDING BROUGHT TO ENFORCE

24
      THE MANDATORY INDEMNIFICATION PROVIDED IN THIS SUBSECTION.

25
           (5) AN INDEMNIFICATION UNDER THIS SECTION, UNLESS ORDERED BY

26
      THE COURT, SHALL BE MADE BY THE SAVINGS BANK ONLY AS AUTHORIZED

27
      IN THE SPECIFIC CASE UPON A DETERMINATION THAT INDEMNIFICATION OF



   03942'99 *
                                  27

 1
      THE DIRECTOR, OFFICER, EMPLOYEE, OR AGENT IS PROPER IN THE

 2
      CIRCUMSTANCES BECAUSE HE OR SHE HAS MET THE APPLICABLE STANDARD

 3
      OF CONDUCT SET FORTH IN THIS SECTION AND UPON AN EVALUATION OF

 4
      THE REASONABLENESS OF EXPENSES AND AMOUNTS PAID IN SETTLEMENT.

 5
      THIS DETERMINATION AND EVALUATION SHALL BE MADE IN ANY OF THE

 6
      FOLLOWING WAYS:

 7
           (A) BY A MAJORITY VOTE OF A QUORUM OF THE BOARD CONSISTING

 8
      OF DIRECTORS WHO ARE NOT PARTIES OR THREATENED TO BE MADE PARTIES

 9
      TO THE ACTION, SUIT, OR PROCEEDING.

10
           (B) IF THE QUORUM DESCRIBED IN SUBDIVISION (A) IS NOT

11
      OBTAINABLE, BY MAJORITY VOTE OF A COMMITTEE DULY DESIGNATED BY

12
      THE BOARD AND CONSISTING SOLELY OF 2 OR MORE DIRECTORS NOT AT THE

13
      TIME PARTIES OR THREATENED TO BE MADE PARTIES TO THE ACTION,

14
      SUIT, OR PROCEEDING.

15
           (C) BY INDEPENDENT LEGAL COUNSEL IN A WRITTEN OPINION, WHICH

16
      COUNSEL SHALL BE SELECTED IN 1 OF THE FOLLOWING WAYS:

17
           (i) BY THE BOARD OR ITS COMMITTEE IN THE MANNER PRESCRIBED

18
      IN SUBDIVISION (A) OR (B).

19
           (ii) IF A QUORUM OF THE BOARD CANNOT BE OBTAINED UNDER SUB-

20
      DIVISION (A) AND A COMMITTEE CANNOT BE DESIGNATED UNDER SUBDIVI-

21
      SION (B), BY THE BOARD.

22
           (D) BY ALL INDEPENDENT DIRECTORS WHO ARE NOT PARTIES OR

23
      THREATENED TO BE MADE PARTIES TO THE ACTION, SUIT, OR

24
      PROCEEDING.

25
           (E) BY THE SHAREHOLDERS, BUT SHARES HELD BY DIRECTORS, OFFI-

26
      CERS, EMPLOYEES, OR AGENTS WHO ARE PARTIES OR THREATENED TO BE





   03942'99 *
                                  28

 1
      MADE PARTIES TO THE ACTION, SUIT, OR PROCEEDING MAY NOT BE

 2
      VOTED.

 3
           (6) ALL DIRECTORS MAY PARTICIPATE IN THE DESIGNATION OF A

 4
      COMMITTEE UNDER SUBSECTION (5)(B) OR IN THE SELECTION OF INDEPEN-

 5
      DENT LEGAL COUNSEL UNDER SUBSECTION (5)(C)(ii).

 6
           (7) IF A PERSON IS ENTITLED TO INDEMNIFICATION UNDER THIS

 7
      SECTION FOR A PORTION OF EXPENSES, INCLUDING REASONABLE ATTORNEY

 8
      FEES, JUDGMENTS, PENALTIES, FINES, AND AMOUNTS PAID IN SETTLE-

 9
      MENT, BUT NOT FOR THE TOTAL AMOUNT OF THE EXPENSES, THE SAVINGS

10
      BANK MAY INDEMNIFY THE PERSON FOR THE PORTION OF THE EXPENSES,

11
      JUDGMENTS, PENALTIES, FINES, OR AMOUNTS PAID IN SETTLEMENT FOR

12
      WHICH THE PERSON IS ENTITLED TO BE INDEMNIFIED.

13
           (8) A SAVINGS BANK MAY PAY OR REIMBURSE THE REASONABLE

14
      EXPENSES INCURRED BY A DIRECTOR, OFFICER, EMPLOYEE, OR AGENT WHO

15
      IS A PARTY OR THREATENED TO BE MADE A PARTY TO AN ACTION, SUIT,

16
      OR PROCEEDING DESCRIBED IN THIS SECTION IN ADVANCE OF THE FINAL

17
      DISPOSITION OF THE ACTION, SUIT, OR PROCEEDING IF ALL OF THE FOL-

18
      LOWING APPLY:

19
           (A) THE PERSON FURNISHES THE SAVINGS BANK A WRITTEN AFFIRMA-

20
      TION OF HIS OR HER GOOD FAITH BELIEF THAT HE OR SHE HAS MET THE

21
      APPLICABLE STANDARD OF CONDUCT SET FORTH IN THIS SECTION.

22
           (B) THE PERSON FURNISHES THE SAVINGS BANK A WRITTEN UNDER-

23
      TAKING EXECUTED PERSONALLY OR ON HIS OR HER BEHALF TO REPAY THE

24
      ADVANCE IF IT IS ULTIMATELY DETERMINED THAT HE OR SHE DID NOT

25
      MEET THE STANDARD OF CONDUCT.  THE UNDERTAKING SHALL BE BY UNLIM-

26
      ITED GENERAL OBLIGATION OF THE PERSON ON WHOSE BEHALF ADVANCES

27
      ARE MADE BUT NEED NOT BE SECURED.



   03942'99 *
                                  29

 1
           (C) A DETERMINATION IS MADE THAT THE FACTS THEN KNOWN TO

 2
      THOSE MAKING THE DETERMINATION WOULD NOT PRECLUDE INDEMNIFICATION

 3
      UNDER THIS ACT.

 4
           SEC. 330A.  FOR PURPOSES OF THIS SECTION AND SECTIONS 326,

 5
      327, 328, 329, 330, AND 332, A PERSON WHO IS OR WAS A DIRECTOR,

 6
      OFFICER, EMPLOYEE, OR AGENT OF A DEPOSITORY INSTITUTION ABSORBED

 7
      IN A CONSOLIDATION OR MERGER OR IS OR WAS SERVING AT THE REQUEST

 8
      OF THE DEPOSITORY INSTITUTION AS A DIRECTOR, OFFICER, PARTNER,

 9
      TRUSTEE, EMPLOYEE, OR AGENT OF ANOTHER DEPOSITORY INSTITUTION,

10
      FOREIGN OR DOMESTIC CORPORATION, PARTNERSHIP, JOINT VENTURE,

11
      TRUST, OR OTHER ENTERPRISE, WHETHER FOR PROFIT OR NOT, SHALL HOLD

12
      THE SAME POSITION WITH RESPECT TO THE CONSOLIDATED BANK AS HE OR

13
      SHE WOULD IF HE OR SHE HAD SERVED THE CONSOLIDATED BANK IN THAT

14
      CAPACITY.

15
           Sec. 334.  (1)  A  EXCEPT AS PROVIDED IN SUBSECTION (2), A

16
      savings bank that commences voluntary liquidation proceedings

17
      under section 333 shall continue to be a body corporate for the

18
      further term of THE LESSER OF 3 years from the commencement of

19
      the proceedings OR THE DATE THE CERTIFICATE IS ISSUED UNDER SEC-

20
      TION 333(8) for the purpose of prosecuting and defending actions

21
      for or against the savings bank and to enable it gradually to

22
      settle and close its affairs, to dispose of and convey its prop-

23
      erty, and to divide its assets but not for the purpose of con-

24
      tinuing the business for which it was organized.

25
           (2) With respect to an action, suit, or proceeding begun or

26
      commenced by or against the savings bank prior to the

27
      commencement of voluntary liquidation proceedings, and with



   03942'99 *
                                  30

 1
      respect to any action, suit, or proceeding begun or commenced by

 2
      the savings bank within 3 years after the commencement of volun-

 3
      tary liquidation proceedings, the savings bank shall be continued

 4
      as a body corporate  beyond the 3-year period and  until any

 5
      judgments, orders, or decrees are fully executed.

 6
           (3) If the number of directors of a savings bank that has

 7
      commenced voluntary liquidation proceedings is less than the full

 8
      number of directors required or authorized by statute or by the

 9
      bylaws of the savings bank for any reason, a majority of the

10
      remaining surviving directors or the sole surviving director  ,

11
      during the period of 3 years,  shall possess the same powers in

12
      acting for the savings bank under this section as the duly autho-

13
      rized board of directors of the savings bank possessed before the

14
      commencement of voluntary liquidation proceedings.  or during the

15
      term of 3 years. 

16
           (4) A savings bank in liquidation under the laws of this

17
      state  may  SHALL NOT continue to be a body corporate for

18
       further terms upon application to the commissioner.  Extensions

19
      shall be from year to year at the discretion of the commissioner

20
      until the liquidation is completed  THE PURPOSE OF CONTINUING THE

21
      BUSINESS FOR WHICH IT WAS ORGANIZED.

   22      Sec. 335.  (1) A savings bank whose term will expire by lim-

23
      itation, at any time preceding the expiration of such term, by

24
      amendment of its articles, may extend its corporate term for a

25
      limited period of time or in perpetuity.

26
           (2) A savings bank whose term has expired, but which has not

27
      been wound up or dissolved and which has nevertheless



   03942'99 *
                                  31

 1
      inadvertently continued its active business beyond such term, may

 2
      renew its corporate existence by amendment of its articles with

 3
      the consent of at least  4/5  2/3 of its members or the holders

 4
      of at least  4/5  2/3 of  its capital stock  THE
   OUTSTANDING

 5
      SHARES.  The officers and directors de facto shall do and perform

 6
      all things required of officers and directors de jure as respects

 7
      calling a special meeting of the shareholders and submitting to

 8
      them the question of renewing the corporate existence.

 9
           (3)  No  A savings bank de facto shall NOT be permitted to

10
      renew its corporate life unless the action is taken within 3

11
      years after its term has expired and renewal does not relieve the

12
      savings bank from any penalties that may have accrued against it

13
      under any law of this state.

14
           (4) A savings bank whose term has been extended or renewed

15
      shall be the same savings bank and have the same members, share-

16
      holders, directors, and officers, enjoy all the rights, privi-

17
      leges, immunities, and powers, and be subject to all the liabili-

18
      ties that it respectively possessed and was subject to before the

19
      extension or renewal of its existence.

20
           Sec. 336.  (1) With the approval of the commissioner based

21
      upon an examination of either the buying or selling organization,

22
      or both, and upon the affirmative vote of a majority of the mem-

23
      bers of its board of directors and 2/3 of its members or the

24
      holders of 2/3 of its stock entitled to vote, a savings bank may

25
      do either or both of the following:

26
           (a) Sell all or substantially all of its assets of every

27
      kind, character, and description, including, but not limited to,



   03942'99 *
                                  32

 1
      its goodwill and corporate franchises to another savings bank,

 2
      bank, out-of-state bank, national bank, or association.

 3
           (b) Purchase all or substantially all of the assets of every

 4
      kind, character, and description, including, but not limited to,

 5
      the goodwill and corporate franchises and assume the liabilities

 6
      of another savings bank, bank, out-of-state bank, national bank,

 7
      or association.

 8
           (2) The consideration for a purchase and sale under this

 9
      section may include shares of stock of the purchasing savings

10
      bank, bank, out-of-state bank, national bank, or association.  A

11
      purchase and sale shall not be made to defeat or defraud any of

12
      the creditors of the organizations.

13
           (3) Certified copies of all members', shareholders', and

14
      directors' proceedings under this section shall be filed with the

15
      commissioner and contain in detail the particulars relating to

16
      the sale and purchase, including a copy of the agreement of sale

17
      and purchase. 

18
           (1) WITH THE APPROVAL OF THE COMMISSIONER, BASED UPON AN

19
      EXAMINATION OR OTHER APPROPRIATE ANALYSIS OF EITHER THE BUYING OR

20
      SELLING ORGANIZATION, OR BOTH, AND UPON THE AFFIRMATIVE VOTE OF A

21
      MAJORITY OF THE MEMBERS OF ITS BOARD OF DIRECTORS AND OF THE

22
      HOLDERS OF 2/3 OF ITS STOCK ENTITLED TO VOTE, A SAVINGS BANK MAY

23
      DO EITHER OR BOTH OF THE FOLLOWING:

24
           (A) SELL ALL OR SUBSTANTIALLY ALL OF ITS ASSETS OF EVERY

25
      KIND, CHARACTER, AND DESCRIPTION AND ASSIGN ITS LIABILITIES TO

26
      ANY DEPOSITORY INSTITUTION.





   03942'99 *
                                  33

 1
           (B) PURCHASE ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF EVERY

 2
      KIND, CHARACTER, AND DESCRIPTION AND ASSUME THE LIABILITIES OF

 3
      ANOTHER DEPOSITORY INSTITUTION.

 4
           (2) THE CONSIDERATION FOR A PURCHASE AND SALE UNDER THIS

 5
      SECTION MAY INCLUDE SHARES OF STOCK OF THE PURCHASING BANK,

 6
      OUT-OF-STATE BANK, NATIONAL BANK, ASSOCIATION, OR SAVINGS BANK.

 7
           (3) A PURCHASE AND SALE SHALL NOT BE MADE TO DEFEAT OR

 8
      DEFRAUD ANY OF THE CREDITORS OF THE DEPOSITORY INSTITUTIONS.

 9
           (4) CERTIFIED COPIES OF ALL SHAREHOLDERS' AND DIRECTORS'

10
      PROCEEDINGS UNDER THIS SECTION SHALL BE SUBMITTED TO THE COMMIS-

11
      SIONER AND SHALL CONTAIN THE TERMS OF THE SALE AND PURCHASE,

12
      INCLUDING A COPY OF THE AGREEMENT OF SALE AND PURCHASE.

13
           (5) THE LIABILITY OF A DEPOSITORY INSTITUTION OR OF ITS

14
      SHAREHOLDERS, DIRECTORS, OR OFFICERS, OR THE RIGHTS OF CREDITORS

15
      OF, OR OTHER PERSONS TRANSACTING BUSINESS WITH, THE DEPOSITORY

16
      INSTITUTION SHALL NOT BE LESSENED OR IMPAIRED AS THE RESULT OF A

17
      SALE OF ASSETS UNDER THIS SECTION.

18
           (6) NOTWITHSTANDING ANY OTHER PROVISION OF THIS ACT, A SAV-

19
      INGS BANK THAT PURCHASES OR ASSUMES ALL OR SUBSTANTIALLY ALL OF

20
      THE ASSETS OR LIABILITIES OF A DEPOSITORY INSTITUTION MAY RETAIN,

21
      MAINTAIN, AND OPERATE THE PRINCIPAL OFFICE OR BRANCHES OF THE

22
      DEPOSITORY INSTITUTION AS BRANCHES OF THE PURCHASING SAVINGS BANK

23
      WITHOUT PROVIDING NOTICE TO THE COMMISSIONER PROVIDED IT ASSUMES

24
      THE DEPOSIT LIABILITIES OF THE DEPOSITORY INSTITUTION MAINTAINED

25
      AT THE PRINCIPAL OFFICE OR BRANCHES.







   03942'99 *
                                  34

 1
           SEC. 340.  THE COMMISSIONER MAY PROMULGATE RULES UNDER THE

 2
      ADMINISTRATIVE PROCEDURES ACT OF 1969, 1969 PA 306, MCL 24.201 TO

 3
      24.328, TO IMPLEMENT AND ENFORCE THIS ACT.

 4
           Sec. 401.  (1) Except as otherwise provided by this act, a

 5
      savings bank may engage in the business of banking and exercise

 6
      all powers incidental to the business of banking or which further

 7
      or facilitate the purposes of a savings bank.  A savings bank has

 8
      all the powers conferred by this act and granted by rule, order,

 9
      or declaratory ruling of the commissioner, including, but not

10
      limited to, all of the following powers:

11
           (a) To have a corporate seal, that may be altered, and to

12
      use the seal, or a facsimile of it, by having it impressed,

13
      affixed, or reproduced in any manner.

14
           (b) To have succession in perpetuity or for a limited period

15
      of time, as fixed by its articles or until its affairs are

16
      finally wound up by liquidation, forfeiture, or dissolution as

17
      provided by this act.

18
           (c) To make contracts.

19
           (d) To sue and be sued, complain, and defend in its corpo-

20
      rate name as fully as a natural person.

21
           (e) To elect or appoint directors who shall appoint from

22
      their members a president who shall perform duties as may be des-

23
      ignated by the board, and who shall serve as the chairperson of

24
      the board, unless the board designates another director to be

25
      chairperson in lieu of the president.  The board may appoint

26
      officers as the board considers necessary, who need not be





   03942'99 *
                                  35

 1
      members of the board, define their duties, dismiss at pleasure,

 2
      and appoint other officers to fill vacancies.

 3
           (f) To make, alter, amend, and repeal bylaws not inconsis-

 4
      tent with its articles or with law for the administration and

 5
      regulation of the affairs of the savings bank.

 6
           (g) To have and exercise the powers and means appropriate to

 7
      effect the purpose for which the savings bank is incorporated.

 8
           (h) To make investments permitted by this act and those

 9
      investments permitted by order or declaratory ruling of the

10
      commissioner.

11
           (i) To make contributions and donations for the public wel-

12
      fare or for religious, charitable, scientific, or educational

13
      purposes, and, in connection with the contributions and dona-

14
      tions, establish and operate charitable trusts.

15
           (j) To purchase, take, lease as lessee, or otherwise acquire

16
      and to own, hold, and use, to sell, lease as lessor, pledge,

17
      grant a security interest in, convey, or otherwise dispose of

18
      personal property in connection with the exercise of a power

19
      granted by this act.

20
           (k) To act as agent of the United States or of an instrumen-

21
      tality or agency of the United States, or of a state, for the

22
      sale or issue of bonds, notes, or other obligations of the United

23
      States, or of a state and to act as a fiscal agent of the United

24
      States, a state, or as a treasury tax and loan depository and

25
      perform all reasonable duties in those capacities as may be pre-

26
      scribed or required by regulation of the secretary of the

27
      treasury of the United States, or of the treasurer of a state,



   03942'99 *
                                  36

 1
      and to take other action as may be necessary or proper to enable

 2
      the savings bank to act under this subdivision.

 3
           (l) To become a member of the federal reserve system, to

 4
      hold shares of stock in a federal reserve bank, to take all

 5
      actions incident to its membership, and to exercise all powers,

 6
      not inconsistent with the provisions of this act, conferred on

 7
      member banks by the federal reserve act.

 8
           (m) To become an insured bank under the federal deposit

 9
      insurance act, and to take actions incident to an insured status

10
      under that act.

11
           (n) To become a member and buy and hold stock of the federal

12
      home loan bank as defined in section 2 of the federal home loan

13
      bank act, chapter 522, 47 Stat. 725, 12 U.S.C. 1422, and to exer-

14
      cise those powers conferred upon a federal home loan bank member

15
      by the federal home loan bank that are consistent with this act.

16
           (o) To sell mortgage loans to the federal national mortgage

17
      association, the federal home loan mortgage corporation, and the

18
      government national mortgage association, or successors of the

19
      associations, or any other secondary market loan purchaser and,

20
      in connection with these associations, to make payments of capi-

21
      tal contributions, required by law, in the nature of subscrip-

22
      tions for stock of an association or successor of the associa-

23
      tion, to receive stock evidencing the capital contributions, and

24
      to hold or dispose of the stock.

25
           (p) To conduct its business through subsidiaries, at the

26
      same location or a location different from the savings bank.  A

27
      subsidiary may engage in all activities and make all investments



   03942'99 *
                                  37

 1
      permitted for a savings bank by this act or by rule, order, or

 2
      declaratory ruling of the commissioner, except that a subsidiary

 3
      may not accept deposits or engage in trust activities unless spe-

 4
      cifically authorized by the commissioner or by another statute of

 5
      this state.  In addition, a subsidiary may engage in activities

 6
      specifically permitted for subsidiaries by order or declaratory

 7
      ruling of the commissioner.  Except upon written approval of the

 8
      commissioner, a savings bank shall not be a general partner in a

 9
      subsidiary.

10
           (q) To engage in any aspect of the insurance and surety

11
      business as an agent, broker, solicitor, or insurance counselor

12
      as provided under the insurance code of 1956,  Act No. 218 of the

13
      Public Acts of 1956, being sections 500.100 to 500.8302 of the

14
      Michigan Compiled Laws  1956 PA 218, MCL 500.100 TO 500.8302, and

15
      to own an insurance agency in whole or in part as provided under

16
       Act No. 218 of the Public Acts of 1956  THE INSURANCE CODE OF

17
      1956, 1956 PA 218, MCL 500.100 TO 500.8302.

18
           (r) To give its bond in a proceeding in any court in which

19
      it is a party or upon an appeal in a proceeding, and to pledge

20
      assets as security for the bond.

21
           (s) Notwithstanding any provision of this act, to acquire

22
      and hold property, or a security interest in property, as protec-

23
      tion against loss on an evidence of indebtedness, on an agreement

24
      for the payment of money, or on an investment security previously

25
      acquired lawfully and in good faith, subject to disposition of

26
      property within a period of 60 months after the date of

27
      acquisition, or a longer period as the commissioner may approve.



   03942'99 *
                                  38

 1
           (t) To service loans for others and to receive a fee for the

 2
      service.

 3
           (u) To execute and deliver guarantees as may be incidental

 4
      or usual in carrying on the business of banking.

 5
           (v) To make, sell, purchase, arrange, participate in, invest

 6
      in, or otherwise deal in loans or extensions of credit for con-

 7
      sumer purposes, which are unsecured or secured by liens or inter-

 8
      ests in personal property or real estate.

 9
           (w) To make, sell, purchase, arrange, participate in, invest

10
      in, or otherwise deal in loans or extensions of credit for agri-

11
      cultural, business, corporate, or commercial purposes, which are

12
      unsecured or secured by liens or interests in personal property

13
      or real estate.

14
           (x) To borrow money from any source, assign or pledge any of

15
      its assets or properties as collateral security subject to limi-

16
      tations stated in section 508, and issue its notes, bonds, and

17
      other obligations.

18
           (y) To make deposits in a bank organized solely for the pur-

19
      pose of providing banking services to financial institutions.

20
           (z) To own and operate a messenger service or to own or

21
      invest in an entity that operates a messenger service.

22
           (aa) To conduct business using electronic information pro-

23
      cessing, including the electronic processing and execution of

24
      transactions between a savings bank and its customers and a sav-

25
      ings bank and other depository institutions.







   03942'99 *
                                  39

 1
           (bb) To establish and operate a loan production office or

 2
      loan production offices within this state and outside this state

 3
      as permitted by section 418.

 4
           (cc) To contract with a person or entity to act as an agent

 5
      in an agency office, as permitted by section  417(6)  417.

 6
           (dd) To enter into principal and agent relationships with

 7
      affiliated depository institutions.  A savings bank or an affili-

 8
      ated depository institution in its capacity as an agent under

 9
      this subsection may do all of the following:

10
           (i) Receive deposits.

11
           (ii) Permit withdrawals of deposits.

12
           (iii) Renew time deposits.

13
           (iv) Close loans.

14
           (v) Service loans.

15
           (vi) Receive loan payments.

16
           (vii) Engage in any activity specifically authorized by this

17
      act or by order or declaratory ruling of the commissioner.

18
           (ee) To sell money orders, travel checks, cashier's checks,

19
      and similar instruments drawn by it on its accounts or as agent

20
      for any organization empowered to sell the instruments through

21
      agents within this state.

22
           (ff) To guarantee the signatures of customers and others.

23
           (gg) To operate a safe and collateral deposit company or

24
      department under section 428.

25
           (hh) To engage directly in the real estate brokerage busi-

26
      ness as provided under article 25 of the occupational code,  Act

27
      No. 299 of the Public Acts of 1980, being sections 339.2501 to



   03942'99 *
                                  40

 1
      339.2518 of the Michigan Compiled Laws  1980 PA 299, MCL 339.2501

 2
      TO 339.2518, and section 409.

 3
           (ii) To own in whole or in part a real estate brokerage

 4
      business as provided under  Act No. 299 of the Public Acts of

 5
      1980  ARTICLE 25 OF THE OCCUPATIONAL CODE, 1980 PA 299,

 6
      MCL 339.2501 TO 339.2518, and section 409.

 7
           (jj) To issue securities in the form of bonds, notes, deben-

 8
      tures, and other evidence of indebtedness.

 9
           (2)  The commissioner may promulgate rules under section

10
      208, or issue declaratory rulings, or issue orders, permitting

11
      savings banks to exercise powers not authorized by this act.  It

12
      is intended that this subsection shall vest in the commissioner

13
      the discretion and authority to authorize savings banks to exer-

14
      cise all powers appropriate and necessary to compete with other

15
      depository financial institutions and other providers of finan-

16
      cial services.  In the exercise of the discretion permitted by

17
      this subsection, the commissioner shall consider the ability of

18
      savings banks to exercise any additional power in a safe and

19
      sound manner, the authority of state and national banks, associa-

20
      tions, and state and federal credit unions, operating under state

21
      or federal law or regulation, the powers of other competing enti-

22
      ties providing financial services in this state, and any specific

23
      limitations on powers contained in this act or in any other state

24
      law.  On at least a quarterly basis, the commissioner shall give

25
      notice to all savings banks of rules promulgated, or declaratory

26
      rulings or determinations, or orders, issued under this

27
      subsection.  THE COMMISSIONER MAY AUTHORIZE BY ORDER OR



   03942'99 *
                                  41

 1
      DECLARATORY RULING A SAVINGS BANK TO EXERCISE FURTHER POWERS

 2
      CONSISTENT WITH THE SAFE AND SOUND CONDUCT OF THE BUSINESS OF

 3
      BANKING OR OF A BUSINESS RELATED OR INCIDENTAL TO BANKING AS ARE

 4
      GRANTED BY THE LAWS OF THE UNITED STATES OR OF ANY STATE OR

 5
      POLITICAL SUBDIVISION OF THE UNITED STATES TO FINANCIAL SERVICE

 6
      PROVIDERS.

 7
           Sec. 409.  (1) A savings bank that engages directly in the

 8
      real estate brokerage business or owns in whole or in part a real

 9
      estate brokerage business shall provide written notice of its

10
      licensure as a real estate broker or its ownership of a real

11
      estate brokerage business to the commissioner within 10 days of

12
      licensure or ownership.  The notice required by this subsection

13
      shall include the name and business address of the real estate

14
      brokerage.

15
           (2) A savings bank that engages directly in the real estate

16
      brokerage business or owns in whole or in part a real estate bro-

17
      kerage business shall not do any of the following:

18
           (a) Impose a requirement, verbally or in writing, that a

19
      borrower must contract for or enter into any other arrangement

20
      for real estate brokerage services with a particular real estate

21
      broker.

22
           (b) Impose a requirement, verbally or in writing, that as a

23
      condition of approving a loan a borrower shall contract or enter

24
      into any other arrangement for real estate brokerage services.

25
           (c) Impose a requirement, verbally or in writing, that a

26
      real estate brokerage customer shall make application for a loan





   03942'99 *
                                  42

 1
      or any other service or services of a particular savings bank or

 2
      any of its subsidiaries, agencies, or service entities.

 3
           (d) Impose a requirement, verbally or in writing, that a

 4
      condition of providing real estate brokerage services is that the

 5
      customer shall make an application for a loan or any other

 6
      arrangement for other services of the savings bank or any of its

 7
      subsidiaries, agencies, or services entities.

 8
           (e) Offer or provide more favorable consideration, terms, or

 9
      conditions for any financial products or services to induce or

10
      attempt to induce a person to enter into any arrangement for real

11
      estate brokerage services with any particular real estate

12
      broker.

13
           (f) Offer or provide more favorable terms or conditions for

14
      any real estate brokerage services to induce or attempt to induce

15
      a person to apply for a loan or obtain any other services of a

16
      particular savings bank or any of its subsidiaries, agencies, or

17
      service entities.

18
           (g) Any other activity prohibited by order or declaratory

19
      ruling of the commissioner.

20
           (3) A savings bank that engages directly in the real estate

21
      brokerage business or owns in whole or in part a real estate bro-

22
      kerage business under this section shall clearly disclose in

23
      writing to any person who applies for credit related to a real

24
      estate transaction or applies for prequalification or preapproval

25
      for credit related to a real estate transaction, that the person

26
      is not required to contract for or enter into an arrangement for

27
      real estate brokerage services with a particular real estate



   03942'99 *
                                  43

 1
      broker.  Compliance with the disclosure requirements of this

 2
      subsection shall not be necessary when a person applies for

 3
      credit or prequalification for credit solely for the purpose of

 4
      refinancing an existing indebtedness.

 5
           (4) A real estate brokerage that is affiliated with a sav-

 6
      ings bank shall clearly disclose in writing, before the time an

 7
      agency agreement for real estate brokerage services is executed,

 8
      that the person is not required to apply, contract for, or enter

 9
      into any other arrangement for services of a particular savings

10
      bank or any of its subsidiaries, agencies, or service entities.

11
           (5) The requirements of subsections (3) and (4) do not apply

12
      when the person has been given the  controlled  AFFILIATED busi-

13
      ness arrangement disclosure statement required by the real estate

14
      settlement procedures act of 1974, Public Law 93-533,

15
      88 Stat. 1724.

16
           (6) If the commissioner finds that a savings bank has vio-

17
      lated this section, the commissioner may issue an order requiring

18
      the savings bank to cease and desist the activity that violates

19
      this section.  If the commissioner additionally finds that the

20
      violation was knowingly committed, the commissioner may order any

21
      of the following:

22
           (a) A civil fine of not more than $500.00 for each violation

23
      but not to exceed an aggregate civil penalty of $10,000.00.

24
           (b) That restitution be made to a customer for actual dam-

25
      ages directly attributable to the acts that are found to be a

26
      violation of this section.





   03942'99 *
                                  44

 1
           (7) An action under this section shall not be brought more

 2
      than 3 years after the occurrence of the violation that is the

 3
      basis of the action.

 4
           Sec. 412.  Upon written notice to the commissioner, a sav-

 5
      ings bank may change the location of its main office to any

 6
      existing branch location of the savings bank within the limits of

 7
      the city, village, or township in which the savings bank is

 8
      located.  With the prior written approval of the commissioner, a

 9
      savings bank may change the location of its principal office to

10
      any other location within this state. 

11
           (1) UPON PRIOR WRITTEN NOTICE TO THE COMMISSIONER, A SAVINGS

12
      BANK MAY CHANGE THE LOCATION OF ITS PRINCIPAL OFFICE TO ANY

13
      EXISTING BRANCH LOCATION OF THE SAVINGS BANK WITHIN THIS STATE.

14
           (2) UNLESS THE COMMISSIONER OBJECTS IN WRITING WITHIN 60

15
      DAYS AFTER RECEIPT OF WRITTEN NOTICE FROM THE SAVINGS BANK OF ITS

16
      INTENT TO RELOCATE ITS PRINCIPAL OFFICE, A SAVINGS BANK MAY

17
      CHANGE THE LOCATION OF ITS PRINCIPAL OFFICE TO ANY OTHER LOCATION

18
      WITHIN THIS STATE WHICH IS NOT AN EXISTING BRANCH LOCATION OF THE

19
      SAVINGS BANK.  THE COMMISSIONER MAY ISSUE A WRITTEN STATEMENT OF

20
      INTENT NOT TO OBJECT AT ANY TIME BEFORE EXPIRATION OF THE 60

21
      DAYS.

22
           Sec. 413.  (1) A savings bank shall not engage in any trans-

23
      action with respect to shares of the capital stock of any corpo-

24
      ration unless specifically authorized by this act or by the com-

25
      missioner under section 401 or 410.







   03942'99 *
                                  45

 1
           (2) A savings bank may purchase and sell securities and

 2
      stock upon the order of and for the account of a customer without

 3
      recourse.

 4
           (3) A savings bank shall not make any loan or discount on

 5
      the security of the shares of its own capital stock, unless the

 6
      security is necessary to prevent loss upon a debt previously con-

 7
      tracted in good faith.

 8
           (4) A savings bank may purchase or hold shares of its own

 9
      stock if  all  ANY of the following apply:

10
           (a) The savings bank is holding shares previously purchased

11
      until disposed of in compliance with an existing stock option

12
      plan.

13
           (b) The purchase or holding of the shares is necessary to

14
      prevent loss upon a debt previously contracted in good faith.

15
           (c) The commissioner gives written approval to the savings

16
      bank to purchase or hold shares for its own account.

17
           Sec. 417.  (1) Upon written notice to the commissioner, a

18
      savings bank may establish and operate 1 or more branches or

19
      mobile branches within any state, the District of Columbia, or a

20
      territory or protectorate of the United States, unless the com-

21
      missioner objects in writing within 60 days after receipt of the

22
      written notice from the savings bank.  The commissioner may issue

23
      to the savings bank a written statement of intent not to object.

24
      A savings bank may exercise at a branch in another state the

25
      powers consistent with the safe and sound conduct of the business

26
      of banking as authorized by order or declaratory ruling of the





   03942'99 *
                                  46

 1
      commissioner and granted by the laws of the state where the

 2
      branch is located.

 3
           (2) A branch of a savings bank, except for a mobile branch,

 4
      shall not be moved from 1 location to another without 30 days'

 5
      advance written notice to the commissioner.

 6
           (3) Upon written notice to the commissioner, a savings bank

 7
      may contract with 1 or more banks, out-of-state banks, national

 8
      banks, associations, credit unions, or other savings banks to act

 9
      as a branch of the savings bank, unless the commissioner objects

10
      in writing within 60 days after receipt of the written notice

11
      from the savings bank.  The commissioner may issue to the savings

12
      bank a written statement of intent not to object that will have

13
      the same effect as a failure by the commissioner to object within

14
      the 60 days provided for under this subsection.  This subsection

15
      shall not be construed to limit the powers granted to a savings

16
      bank under section 401(cc).

17
           (4) Upon written notice to the commissioner, 1 or more

18
      banks, out-of-state banks, national banks, associations, credit

19
      unions, or other savings banks, may contract with a savings bank

20
      to act as a branch of the bank, out-of-state bank, national bank,

21
      association, credit union, or other savings bank, unless the com-

22
      missioner objects in writing within 60 days after receipt of the

23
      written notice from the bank, out-of-state bank, national bank,

24
      association, credit union, or other savings bank.  The commis-

25
      sioner may issue to the depository institution a written state-

26
      ment of intent not to object that will have the same effect as a

27
      failure by the commissioner to object within the 60 days provided



   03942'99 *
                                  47

 1
      for under this subsection.  This subsection shall not be

 2
      construed to limit the powers granted to a savings bank under

 3
      section 401(cc).

 4
           (5) An out-of-state bank located in a state, the District of

 5
      Columbia, or a territory or protectorate of the United States

 6
      whose laws permit the establishment in that state, district, ter-

 7
      ritory, or protectorate of a branch by a savings bank may estab-

 8
      lish and operate 1 or more branches in this state.

 9
           (6) Upon 30 days' advance written notice to the commission-

10
      er, a savings bank may contract with a person or entity to act as

11
      an agent in an agency office.  The written notice shall include

12
      the name and address of the person or entity who will act as

13
      agent for the savings bank, the location of the agency office,

14
      when the agency office will be operational, and the activities in

15
      which the agency office will initially be engaged.  A savings

16
      bank may perform any of the following activities through an

17
      agency office:

18
           (a) Accept a deposit to an existing account and record the

19
      addition to the account or give other evidence of receipt as pre-

20
      scribed by the savings bank.

21
           (b) Accept a withdrawal form and such other evidence

22
      required by the savings bank from an account holder for transmis-

23
      sion to the main office or a branch office of the savings bank.

24
           (c) Solicit and accept a new account.  Evidence of account

25
      ownership shall be issued only by authority of the main office or

26
      a branch office of the savings bank.  An agent may obtain

27
      signature cards from the savings bank for the account holder.



   03942'99 *
                                  48

 1
           (d) Solicit and accept an application for a loan or for a

 2
      land contract purchase.  The agent shall submit the application

 3
      to the main office or a branch of the savings bank for processing

 4
      and approval.

 5
           (e) Disburse withdrawn or loaned funds, upon approval of

 6
      each disbursement by the savings bank.

 7
           (f) Accept payment on a loan or on a land contract and issue

 8
      evidence of receipt as prescribed by the savings bank.

 9
           (g) Any other services as approved by order or declaratory

10
      ruling of the commissioner.

11
           (7) An agent in an agency office shall not possess an unis-

12
      sued or blank authenticated savings account passbook or certifi-

13
      cate or other evidence of account ownership. 

14
           (1) A SAVINGS BANK MAY ESTABLISH AND OPERATE A BRANCH OR

15
      BRANCHES WITHIN ANY STATE, THE DISTRICT OF COLUMBIA, A TERRITORY

16
      OR PROTECTORATE OF THE UNITED STATES, OR A FOREIGN COUNTRY,

17
      UNLESS THE COMMISSIONER OBJECTS IN WRITING WITHIN 30 DAYS AFTER

18
      RECEIPT OF A WRITTEN NOTICE FROM THE BANK OF ITS INTENT TO ESTAB-

19
      LISH A BRANCH.  THE COMMISSIONER MAY ISSUE A WRITTEN STATEMENT OF

20
      INTENT NOT TO OBJECT AT ANY TIME BEFORE THE EXPIRATION OF THE 30

21
      DAYS.

22
           (2) THE WRITTEN NOTICE OF INTENT TO ESTABLISH A MOBILE

23
      BRANCH SHALL CONTAIN A STATEMENT BY THE APPLYING SAVINGS BANK

24
      THAT IT INTENDS TO MOVE THE LOCATION OF THE PHYSICAL STRUCTURE OF

25
      THE BRANCH FROM TIME TO TIME.







   03942'99 *
                                  49

 1
           (3) EXCEPT FOR A MOBILE BRANCH, A BRANCH OF A BANK SHALL NOT

 2
      BE MOVED FROM 1 LOCATION TO ANOTHER WITHOUT PRIOR WRITTEN NOTICE

 3
      TO THE COMMISSIONER.

 4
           (4) UNLESS THE COMMISSIONER OBJECTS IN WRITING WITHIN 30

 5
      DAYS AFTER RECEIPT OF WRITTEN NOTICE FROM A SAVINGS BANK OF ITS

 6
      INTENT TO CONTRACT FOR BRANCH SERVICES, A SAVINGS BANK MAY CON-

 7
      TRACT WITH 1 OR MORE BANKS, OUT-OF-STATE BANKS, NATIONAL BANKS,

 8
      ASSOCIATIONS, OR SAVINGS BANKS FOR THE DEPOSITORY INSTITUTION OR

 9
      INSTITUTIONS TO ACT AS BRANCHES TO PROVIDE SERVICES TO THE CUS-

10
      TOMERS OF THE CONTRACTING SAVINGS BANK.  THE COMMISSIONER MAY

11
      ISSUE A WRITTEN STATEMENT OF INTENT NOT TO OBJECT AT ANY TIME

12
      BEFORE THE EXPIRATION OF THE 30 DAYS.  THIS SUBSECTION SHALL NOT

13
      BE CONSTRUED TO LIMIT THE POWERS GRANTED TO A SAVINGS BANK UNDER

14
      SECTION 401(CC).

15
           (5) UNLESS THE COMMISSIONER OBJECTS IN WRITING WITHIN 30

16
      DAYS AFTER RECEIPT OF WRITTEN NOTICE FROM A CONTRACTING DEPOSI-

17
      TORY INSTITUTION OF ITS INTENT TO CONTRACT FOR BRANCH SERVICES, 1

18
      OR MORE OUT-OF-STATE BANKS, NATIONAL BANKS, ASSOCIATIONS, OR SAV-

19
      INGS BANKS MAY CONTRACT WITH A SAVINGS BANK FOR THE SAVINGS BANK

20
      TO PROVIDE SERVICES TO THE CUSTOMERS OF THE CONTRACTING

21
      OUT-OF-STATE BANK, NATIONAL BANK, ASSOCIATION, OR SAVINGS BANK.

22
      THE COMMISSIONER MAY ISSUE A WRITTEN STATEMENT OF INTENT NOT TO

23
      OBJECT AT ANY TIME BEFORE THE EXPIRATION OF THE 30 DAYS.  THIS

24
      SUBSECTION SHALL NOT BE CONSTRUED TO LIMIT THE POWERS GRANTED TO

25
      A SAVINGS BANK UNDER SECTION 401(CC).

26
           (6) SUBJECT TO THE REQUIREMENTS, LIMITATIONS, AND

27
      RESTRICTIONS OF SUBSECTIONS (1) TO (3), A STATE AGENCY OR STATE



   03942'99 *
                                  50

 1
      FOREIGN SAVINGS BANK BRANCH ORGANIZED UNDER THIS ACT MAY

 2
      ESTABLISH AND OPERATE ADDITIONAL OFFICES IN THE UNITED STATES AND

 3
      ITS TERRITORIES AND PROTECTORATES.

 4
           (7) AN OUT-OF-STATE SAVINGS BANK OR FEDERAL SAVINGS BANK

 5
      LOCATED IN A STATE, THE DISTRICT OF COLUMBIA, OR A TERRITORY OR

 6
      PROTECTORATE OF THE UNITED STATES WHOSE LAWS PERMIT THE ESTAB-

 7
      LISHMENT IN THAT STATE, DISTRICT, TERRITORY, OR PROTECTORATE OF A

 8
      BRANCH BY A SAVINGS BANK MAY ESTABLISH AND OPERATE 1 OR MORE

 9
      BRANCHES IN THIS STATE.

10
           (8) AN OUT-OF-STATE SAVINGS BANK MAY APPLY TO ORGANIZE A

11
      BRANCH IN THIS STATE UNDER THIS ACT BY PROVIDING TO THE COMMIS-

12
      SIONER PROOF THAT ITS DEPOSITS ARE INSURED BY AN AGENCY OF THE

13
      UNITED STATES GOVERNMENT.  IF THE COMMISSIONER DETERMINES THAT

14
      THE OUT-OF-STATE SAVINGS BANK IS SAFE AND SOUND, THAT THE

15
      OUT-OF-STATE SAVINGS BANK IS SUBJECT TO REGULATION, AND THAT

16
      THERE EXISTS AN AGREEMENT FOR EXCHANGE OF SUPERVISORY INFORMATION

17
      BETWEEN THE BUREAU AND THE OUT-OF-STATE SAVINGS BANK'S REGULATOR,

18
      THE COMMISSIONER SHALL PROVIDE TO THE OUT-OF-STATE SAVINGS BANK A

19
      CERTIFICATE OF ORGANIZATION AND ELIGIBILITY TO ACCEPT DEPOSITS

20
      AND INVESTMENTS OF PUBLIC FUNDS OF THE STATE AND LOCAL UNITS OF

21
      GOVERNMENT.

22
           (9) A FOREIGN SAVINGS BANK BRANCH THAT HAS DESIGNATED A HOME

23
      STATE OTHER THAN THIS STATE MAY ESTABLISH AND OPERATE 1 OR MORE

24
      ADDITIONAL OFFICES IN THIS STATE.

25
           (10) PRIOR TO COMMENCING OPERATIONS AT A BRANCH IN THIS

26
      STATE, AN OUT-OF-STATE SAVINGS BANK, FOREIGN SAVINGS BANK, OR

27
      FEDERAL SAVINGS BANK SHALL PROVIDE WRITTEN NOTICE TO THE



   03942'99 *
                                  51

 1
      COMMISSIONER OF THE NAME OF THE INSTITUTION, THE STREET ADDRESS

 2
      AND MAILING ADDRESS, IF DIFFERENT, OF THE INSTITUTION'S PRINCIPAL

 3
      OFFICE, THE STREET ADDRESS OF THE BRANCH OFFICE, AND THE DATE

 4
      WHEN THE BRANCH IS TO COMMENCE OPERATIONS IN THIS STATE.

 5
           (11) EACH SAVINGS BANK, OUT-OF-STATE SAVINGS BANK, FOREIGN

 6
      SAVINGS BANK, AND FEDERAL SAVINGS BANK OPERATING IN THIS STATE

 7
      SHALL DO BOTH OF THE FOLLOWING:

 8
           (A) DESIGNATE AND MAINTAIN AN AGENT LOCATED IN THIS STATE

 9
      UPON WHOM PROCESS FOR JUDICIAL AND ADMINISTRATIVE MATTERS MAY BE

10
      SERVED AND SHALL PROVIDE WRITTEN NOTICE CONTAINING THE NAME AND

11
      ADDRESS OF ITS AGENT TO THE COMMISSIONER BEFORE COMMENCING OPERA-

12
      TIONS IN THIS STATE.

13
           (B) NOTIFY THE COMMISSIONER IN WRITING OF ANY CHANGE IN ITS

14
      DESIGNATED AGENT OR THE AGENT'S ADDRESS WITHIN 10 DAYS FOLLOWING

15
      THE EFFECTIVE DATE OF THE CHANGE.

16
           (12) FOR PURPOSES OF THIS SECTION, THE DESIGNATED AGENT OF A

17
      SAVINGS BANK OR A FEDERAL SAVINGS BANK IS ITS CHIEF EXECUTIVE

18
      OFFICER.

19
           (13) IF A SAVINGS BANK OR FOREIGN SAVINGS BANK PERMANENTLY

20
      DISCONTINUES THE OPERATIONS OF ANY BRANCH, FOREIGN SAVINGS BANK

21
      AGENCY, OR FOREIGN SAVINGS BANK BRANCH, ALL FUNCTIONS OF THE

22
      BRANCH, FOREIGN SAVINGS BANK AGENCY, OR FOREIGN SAVINGS BANK

23
      BRANCH SHALL BE CONSIDERED TRANSFERABLE TO, AND TREATED AS A PART

24
      OF, THE PRINCIPAL OFFICE OF THE SAVINGS BANK OR, IN THE CASE OF A

25
      FOREIGN SAVINGS BANK, THE PRINCIPAL OFFICE IN THIS COUNTRY.

26
           (14) A SAVINGS BANK, OUT-OF-STATE SAVINGS BANK, FEDERAL

27
      SAVINGS BANK, OR FOREIGN SAVINGS BANK SHALL NOTIFY THE



   03942'99 *
                                  52

 1
      COMMISSIONER IN WRITING BEFORE DISCONTINUING OPERATIONS OF A

 2
      BRANCH, FOREIGN SAVINGS BANK AGENCY, OR FOREIGN SAVINGS BANK

 3
      BRANCH.

 4
           Sec. 422.  (1) As used in this section:

 5
           (a) "Banking office" means a main office or authorized

 6
      branch of a bank, out-of-state bank, national bank, association,

 7
      or savings bank.

 8
           (b) "Host savings bank" means a bank, national bank, associ-

 9
      ation, or savings bank for which trust services are provided by

10
      any other bank, out-of-state bank, national bank, association, or

11
      savings bank.

12
           (c) "Trust service provider" means a savings bank providing

13
      trust services to any other bank, out-of-state bank, national

14
      bank, association, or savings bank.

15
           (2) A savings bank granted full trust powers may contract by

16
      written agreement with any  bank, out-of-state bank, national

17
      bank, association or,  other  savings bank  LEGAL ENTITY to
   carry

18
      on trust services in its name and for its account at 1 or more of

19
      the  banking  offices of the  bank, out-of-state bank, national

20
      bank, association, or  other  savings bank  LEGAL ENTITY.

21
           (3) A savings bank may contract by written agreement with

22
      any  bank, out-of-state bank, national bank, association, or 

23
      other  savings bank  LEGAL ENTITY exercising full trust powers to

24
      carry on trust services at 1 or more of its banking offices but

25
      in the name and for the account of the  bank, out-of-state bank,

26
      national bank, association, or  other  savings bank  LEGAL

27
      ENTITY.



   03942'99 *
                                  53

 1
           (4) An agreement provided for in this section, including a

 2
      lease, or a modification or extension of an agreement, is not

 3
      effective  as to any savings bank  until it is  approved in writ-

 4
      ing by  FILED WITH the commissioner.  The commissioner may

 5
      approve the agreement upon consideration of the sufficiency of

 6
      the capital and surplus of the banks, out-of-state banks,

 7
      national banks, associations, or savings banks, the need for

 8
      trust services, and other facts or circumstances that the commis-

 9
      sioner considers proper. 

10
           (5) Thirty days after a host savings bank mails a notice of

11
      substitution as provided in subsection (6), a trust service pro-

12
      vider shall be substituted for a host savings bank as fiduciary

13
      or agent and succeed to the title of assets held by a host sav-

14
      ings bank in a fiduciary capacity for each account in which the

15
      host savings bank, under the terms of a trust service agreement

16
      approved by the commissioner, will no longer serve as fiduciary

17
      or agent.  A trust service provider shall not be substituted for

18
      the host savings bank for an account in which the recipient of a

19
      notice of substitution with respect to that account objects to

20
      the substitution under subsection (6).

21
           (6) For an account in which a trust service provider is sub-

22
      stituted for a host savings bank under the terms of a trust serv-

23
      ice agreement, the host savings bank shall send a written notice

24
      of substitution by certified mail.  The notice of substitution

25
      shall include the date the notice was mailed and explain that the

26
      trust service provider will not be substituted for the host

27
      savings bank for the account if the recipient of the notice sends



   03942'99 *
                                  54

 1
      a written objection to the host savings bank by first-class mail

 2
      within 30 days after the date the notice was mailed.  The host

 3
      savings bank shall send the notice of substitution to all of the

 4
      following:

 5
           (a) For employee benefit plans, to the plan sponsors.

 6
           (b) For individual retirement accounts and retirement

 7
      accounts for the self-employed, to the account owners.

 8
           (c) For agency and escrow accounts, to the principals.

 9
           (d) For securities for which a host savings bank serves as

10
      trustee, registrar, transfer agent, or paying agent, to the

11
      issuers.

12
           (e) For revocable trusts under agreement, to the settlors.

13
           (f) For irrevocable trusts under agreement, to any

14
      co-fiduciary, to the settlor, to each current income beneficiary

15
      who is an adult, and, if a current income beneficiary is a minor,

16
      to a parent of the minor with whom the minor resides or to the

17
      conservator or guardian of the minor.  The notice to the settlor

18
      shall not grant to the settlor any authority over the trust or

19
      trustee that the settlor did not have before the notice, includ-

20
      ing the authority to object to the substitution of a trust serv-

21
      ice provider for a host savings bank.  For purposes of this sub-

22
      division, "current income beneficiary" means a person currently

23
      entitled to income or a person to whom the trustee, in the

24
      trustee's discretion, may pay principal or income.

25
           (g) For testamentary trusts, to the persons notified under

26
      subdivision (f) and to the probate court that appointed the host

27
      savings bank as trustee.



   03942'99 *
                                  55

 1
           (h) For conservatorships, to any co-fiduciary, to the

 2
      protected person for whom the conservatorship was created or, if

 3
      the conservatorship was created for a minor, to a parent of the

 4
      minor with whom the minor resides or to the guardian of the

 5
      minor, and to the probate court that appointed the host savings

 6
      bank as conservator.

 7
           (i) For guardianships, to any co-fiduciary, to the minor or

 8
      legally incapacitated person for whom the guardian was appointed

 9
      if the ward is at least 14 years of age, and to the probate court

10
      that appointed the host savings bank as guardian.

11
           (j) For probate estates, to any co-fiduciary, to any inter-

12
      ested person as defined by section 1105 of the estates and pro-

13
      tected individuals code, 1998 PA 386, MCL 700.1105, and to the

14
      probate court that appointed the host savings bank as personal

15
      representative.

16
           (7) Subsections (1), (5), and (6) apply to trust service

17
      agreements in effect on or after July 1, 1996.

18
           Sec. 428.  (1) A savings bank may operate a safe deposit

19
      and storage department or invest an amount not exceeding in the

20
      aggregate 15% of its unimpaired capital and surplus, or 15% of

21
      its total capital in the case of a mutual savings bank, in the

22
      stock of not more than 1 safe and collateral deposit company

23
      organized under the laws of this state. 

24
           (1)  (2)  If a savings bank operates a safe deposit and

25
      storage department, the legal liability of the savings bank on

26
      account of any loss to a customer shall not exceed the sum of

27
      $10,000.00 for any 1 box or compartment, including all property



   03942'99 *
                                  56

 1
      accepted for storage outside of the box or compartment.  The

 2
      savings bank may contract with the renter to have the renter

 3
      assume all risks arising from the use of the box, compartment, or

 4
      storage.

 5
           (2)  (3)  The savings bank shall have a lien for unpaid

 6
      rental and storage charges on the contents of any box or compart-

 7
      ment and any property accepted for storage outside of the box or

 8
      compartment.  If the charges are not paid within 1 year from the

 9
      date of accrual, then the savings bank may sell the property at

10
      public auction upon like notice as is required by law for sales

11
      on execution.

12
           (3)  (4)  After retaining from the proceeds of sale the

13
      amount of all charges due and owing at the time of the sale and

14
      the reasonable expenses of the sale, the savings bank shall pay

15
      any balance to the persons entitled to the proceeds.  The savings

16
      bank may fairly and in good faith purchase all or part of the

17
      property at the sale.

18
           Sec. 430.  (1) Savings banks may collect interest and

19
      charges on loans AND EXTENSIONS OF CREDIT, including open-end

20
      credit TO ANY PERSON, as follows:

21
           (a) As permitted by the credit reform act,  Act No. 162 of

22
      the Public Acts of 1995, being sections 445.1851 to 445.1864 of

23
      the Michigan Compiled Laws  1995 PA 162, MCL 445.1851 TO

24
      445.1864.

25
           (b) On obligations purchased by the savings bank, the sav-

26
      ings bank may charge a discount.





   03942'99 *
                                  57

 1
           (c) On a loan not covered by subdivision (a) or (b), a

 2
      savings bank may charge, collect, and receive interest and other

 3
      charges in the same manner and at up to maximum rate or amount

 4
      permitted by law for the same type of loans made by national

 5
      banking associations authorized to do business in this state.

 6
           (d) On a loan not covered by subdivision (a), (b), or (c),

 7
      as otherwise permitted by law.

 8
           (2) A savings bank or any officer or employee of the savings

 9
      bank shall not, directly or indirectly, take or receive more than

10
      the rate of interest allowed by law in advance on its loans and

11
      discounts.

12
           (3) Except as otherwise provided by law, an investigation

13
      fee or handling charge in connection with any transaction shall

14
      not be considered as interest.

15
           (4) A savings bank may pay interest on any deposit that is

16
      payable on demand, unless the commissioner by rule, or order, or

17
      declaratory ruling restricts the right of the savings bank to pay

18
      interest on demand deposits or unless restricted by federal law.

19
           Sec. 432.  (1)  The  EXCEPT AS OTHERWISE PROVIDED IN THIS

20
      SECTION OR BY ORDER OR DECLARATORY RULING OF THE COMMISSIONER,

21
      THE total loans and extensions of credit AND LEASES by a stock

22
      savings bank to a person at no time shall exceed 15% of the capi-

23
      tal and surplus of the stock savings bank, except that upon

24
      approval by 2/3 vote of its board of directors the limit may be

25
      increased not to exceed 25% of the capital and surplus of the

26
      stock savings bank.





   03942'99 *
                                  58

 1
           (2)  The  EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION OR BY

 2
      ORDER OR DECLARATORY RULING OF THE COMMISSIONER, THE total loans

 3
      and extensions of credit AND LEASES by a mutual savings bank to a

 4
      person at no time shall exceed 15% of the total capital of the

 5
      mutual savings bank, except that upon approval by 2/3 vote of its

 6
      board of directors the limit may be increased not to exceed 25%

 7
      of the total capital of the mutual savings bank.

 8
           (3) If the commissioner determines that the interests of a

 9
      group of more than 1 person  , copartnership, association, or

10
      corporation  are so interrelated that they should be considered

11
      as a unit for the purpose for which credit was extended, the

12
      total loans and extensions of credit AND LEASES OF PERSONS of

13
      that group  acquired at any time  shall be combined and consid-

14
      ered loans and extensions of credit  acquired from 1 customer in

15
      applying the limitations of this section through section 434  AND

16
      LEASES OF 1 PERSON UNDER THIS SECTION.

17
           (4) A savings bank is not considered to have violated this

18
      section through section 434 solely by reason of the fact that the

19
      indebtedness of a group then held exceeds the limitations of this

20
      section through section 434 at the time of a determination by the

21
      commissioner that the indebtedness of that group shall be com-

22
      bined, but if required by the commissioner the savings bank shall

23
      make a reasonable attempt to dispose of indebtedness of the group

24
      in the amount in excess of  the limitations  THAT PERMITTED BY

25
      THIS SECTION within a reasonable time determined by the

26
      commissioner.





   03942'99 *
                                  59

 1
           (5) The limitations under subsections (1) and (2) shall not

 2
      apply to loans and extensions of credit described in sections 433

 3
      and 434.

 4
           (6) As used in this section and sections 433 and 434:

 5
           (a) "Loan and extension of credit" or "loan or extension of

 6
      credit" includes all direct or indirect advances of funds to a

 7
      person made on the basis of an obligation of that person to repay

 8
      the funds or repayable from specific property pledged by or on

 9
      behalf of the person.  To the extent specified by the commission-

10
      er, loan and extension of credit or loan or extension of credit

11
      includes any liability of a savings bank to advance funds to or

12
      on behalf of a person under a contractual commitment.  Such term

13
      also includes the cost of purchase of personal property for the

14
      purpose of leasing the property to a person.  Loan and extension

15
      of credit or loan or extension of credit does not include invest-

16
      ment securities held by a savings bank under section 411.

17
           (b) "Person" means an individual, partnership, association,

18
      corporation, governmental entity, or any other legal entity.

19
           SEC. 501.  (1) IF, IN THE OPINION OF THE COMMISSIONER, THE

20
      CAPITAL OF A SAVINGS BANK HAS BECOME IMPAIRED, THE COMMISSIONER

21
      SHALL NOTIFY THE SAVINGS BANK OF HIS OR HER DETERMINATION AND

22
      REQUIRE THE DIRECTORS TO MEET THE DEFICIENCY IN THE CAPITAL

   23 WITHIN A 2-MONTH PERIOD.  THE DIRECTORS SHALL MEET THE DEFICIENCY

24
      BY EITHER MAKING A PRO RATA ASSESSMENT UPON THE STOCK HELD BY

25
      EACH SHAREHOLDER, OR TAKING STEPS TO DISSOLVE THE BANK.  THE

26
      2-MONTH PERIOD MAY BE EXTENDED BY ORDER OF THE COMMISSIONER, IF





   03942'99 *
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 1
      IN HIS OR HER DISCRETION AN EXTENSION IS NECESSARY TO ALLOW THE

 2
      DIRECTORS TO MEET THE DEFICIENCY.

 3
           (2) BEFORE AN ASSESSMENT MAY BE MADE BY THE DIRECTORS, EACH

 4
      SHAREHOLDER, SECURED PARTY, AND PLEDGEE INDICATED ON THE BOOKS OF

 5
      THE SAVINGS BANK AS HOLDING AN INTEREST IN THE STOCK SHALL BE

 6
      PROVIDED WITH WRITTEN NOTICE IN A MANNER REASONABLY CALCULATED TO

 7
      GIVE ACTUAL NOTICE OF THE DETERMINATION MADE BY THE COMMISSIONER

 8
      THAT THE CAPITAL OF THE SAVINGS BANK IS IMPAIRED AND THE AMOUNT

 9
      OF THE ASSESSMENT THAT EACH SHAREHOLDER MUST PAY.

10
           (3) IF A SHAREHOLDER REFUSES OR NEGLECTS TO PAY AN ASSESS-

11
      MENT LEVIED BY THE DIRECTORS WITHIN 30 DAYS FROM THE DATE NOTICE

12
      WAS PROVIDED, THE DIRECTORS SHALL SELL ALL OR PART OF THE

13
      SHAREHOLDER'S SHARES TO THE HIGHEST BIDDER IN A MANNER PROVIDED

14
      IN THIS SECTION.  UPON EXPIRATION OF THE 30-DAY PERIOD AND

15
      REFUSAL OR NEGLECT BY A SHAREHOLDER TO PAY THE ASSESSMENT, A

16
      SECURITY INTEREST IN FAVOR OF THE SAVINGS BANK IN THE AMOUNT OF

17
      THE ASSESSMENT SHALL ATTACH TO ALL OF THE SHAREHOLDER'S SHARES

18
      FOR THE SOLE PURPOSE OF SATISFYING THE ASSESSMENT LEVIED.  THE

19
      SECURITY INTEREST SHALL HAVE PRIORITY OVER ANY OTHER SECURITY

20
      INTERESTS PERFECTED BY A CREDITOR OR OTHERWISE GRANTED BY THE

21
      SHAREHOLDER IN SHARES ISSUED AFTER THE EFFECTIVE DATE OF THIS

22
      ACT.

23
           (4) IF THE DIRECTORS FAIL TO RESTORE THE CAPITAL OF THE SAV-

24
      INGS BANK OR TAKE STEPS TO DISSOLVE THE SAVINGS BANK DURING THE

25
      2-MONTH PERIOD FOLLOWING NOTICE FROM THE COMMISSIONER AND ANY

26
      EXTENSION GRANTED UNDER SUBSECTION (1), THE COMMISSIONER MAY





   03942'99 *
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 1
      APPOINT A RECEIVER FOR THE SAVINGS BANK IN ACCORDANCE WITH THIS

 2
      ACT.

 3
           (5) IF ANY PART OF THE CAPITAL OF A SAVINGS BANK CONSISTS OF

 4
      PREFERRED STOCK, THE DETERMINATION OF WHETHER THE CAPITAL OF THE

 5
      SAVINGS BANK IS IMPAIRED AND THE AMOUNT OF THE IMPAIRMENT SHALL

 6
      BE BASED UPON THE PAR VALUE OF ITS STOCK EVEN THOUGH THE AMOUNT

 7
      THAT THE HOLDERS OF THE PREFERRED STOCK SHALL BE ENTITLED TO

 8
      RECEIVE IN THE EVENT OF RETIREMENT OR DISSOLUTION SHALL BE IN

 9
      EXCESS OF THE PAR VALUE OF THE PREFERRED STOCK.

10
           (6) THE HOLDERS OF PREFERRED STOCK SHALL NOT BE LIABLE FOR

11
      ASSESSMENTS TO RESTORE IMPAIRMENT IN THE CAPITAL OF A SAVINGS

12
      BANK.

13
           (7) IF, 30 DAYS AFTER NOTICE AS PROVIDED IN THIS SECTION, A

14
      SHAREHOLDER HAS REFUSED OR NEGLECTED TO PAY AN ASSESSMENT LEVIED

15
      ON THE SHARES HELD BY THE SHAREHOLDER, THE DIRECTORS MAY SELL ANY

16
      OR ALL OF THE SHAREHOLDER'S SHARES TO SATISFY THE ASSESSMENT.

17
      THE PROCEEDS OF THE SALE SHALL BE DISTRIBUTED IN THE FOLLOWING

18
      ORDER:

19
           (A) THE REASONABLE EXPENSES OF HOLDING FOR SALE AND SELLING

20
      THE STOCK IN A MANNER NOT PROHIBITED BY LAW, INCLUDING REASONABLE

21
      ATTORNEY FEES AND LEGAL EXPENSES INCURRED BY THE SAVINGS BANK.

22
           (B) THE SATISFACTION OF THE ASSESSMENT LEVIED BY THE

23
      DIRECTORS.

24
           (C) THE SATISFACTION OF AN INDEBTEDNESS SECURED BY ANY

25
      SECURITY INTEREST IN THE STOCK IF WRITTEN NOTIFICATION DEMANDING

26
      PROCEEDS IS RECEIVED BY THE SAVINGS BANK BEFORE DISTRIBUTION OF

27
      THE PROCEEDS IS COMPLETED.  UNLESS THE HOLDER OF A SECURITY



   03942'99 *
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 1
      INTEREST PROVIDES REASONABLE PROOF OF THE INTEREST, THE SAVINGS

 2
      BANK DOES NOT HAVE TO COMPLY WITH THIS SUBDIVISION.

 3
           (D) ANY REMAINING SURPLUS SHALL BE DISTRIBUTED TO THE

 4
      SHAREHOLDER.

 5
           (8) DISPOSITION OF THE STOCK MAY BE AT A PUBLIC OR PRIVATE

 6
      SALE AT ANY TIME AND ON ANY TERMS, BUT EVERY ASPECT OF THE DISPO-

 7
      SITION INCLUDING THE METHOD, MANNER, TIME, PLACE, AND TERMS SHALL

 8
      BE COMMERCIALLY REASONABLE AND REASONABLY CALCULATED TO MEET THE

 9
      DEFICIENCY.

10
           (9) A SALE OF STOCK AS PROVIDED IN THIS SECTION SHALL EFFECT

11
      AN ABSOLUTE CANCELLATION OF ANY OUTSTANDING CERTIFICATES EVIDENC-

12
      ING THE STOCK SOLD AND ANY SECURITY INTEREST GRANTED OR PLEDGE

13
      MADE IN STOCK ISSUED AFTER THE EFFECTIVE DATE OF THIS ACT.  UPON

14
      FULL PAYMENT OF THE STOCK SOLD, THE SAVINGS BANK SHALL ISSUE NEW

15
      CERTIFICATES TO THE PURCHASER.

16
           (10) THE PURCHASER TAKES THE STOCK FREE OF ANY RIGHTS OR

17
      INTERESTS THE SHAREHOLDER MAY HAVE BASED ON AN UNINTENTIONAL

18
      FAILURE BY THE SAVINGS BANK TO COMPLY WITH THIS SECTION IF ALL OF

19
      THE FOLLOWING APPLY:

20
           (A) THE PURCHASER HAS NO KNOWLEDGE OF ANY DEFECT IN THE

21
      PROCEEDINGS.

22
           (B) THE PURCHASER DOES NOT ACT IN COLLUSION WITH ANY SHARE-

23
      HOLDERS OF THE SAVINGS BANK, A SECURED PARTY, OTHER BIDDERS, OR

24
      THE SAVINGS BANK.

25
           (C) THE PURCHASER MAKES THE PURCHASE IN GOOD FAITH.







   03942'99 *
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 1
           (11) THE ABILITY OF A SAVINGS BANK TO MAKE AN ASSESSMENT

 2
      UNDER THIS SECTION OR TO SELL THE STOCK OF A SHAREHOLDER UNDER

 3
      THIS SECTION IS NOT LIMITED BY THE UNIFORM COMMERCIAL CODE.

 4
           Sec. 508.  (1) Except as otherwise provided in this section,

 5
      a savings bank or savings bank officer shall not give preference

 6
      to a depositor or creditor by pledging the assets of the savings

 7
      bank as collateral security or otherwise.

 8
           (2) A savings bank  , with the written consent of the

 9
      commissioner,  may pledge its assets in an amount not in excess

10
      of 10% of its total  deposits  ASSETS for the purpose of securing

11
      the following:

12
           (a) Funds belonging to the United States or belonging to or

13
      being administered by an officer, instrumentality, or agent of

14
      the United States, funds of estates being administered by a fed-

15
      eral court under a federal bankruptcy law, and other funds when

16
      required or permitted to do so under the laws of the United

17
      States or an order of a federal court.

18
           (b) Surplus funds of the state held by the state treasurer.

19
           (c) Funds of the Mackinac bridge authority, which is

20
      declared to be a political subdivision of this state, under 1950

21
      (Ex Sess) PA 21, MCL 254.301 to 254.304.

22
           (d) Funds of the international bridge authority, which is

23
      declared to be a political subdivision of this state, under 1954

24
      PA 99, MCL 254.221 to 254.240.

25
           (e) Funds on deposit under 1941 PA 205, MCL 252.51 to

26
      252.64, providing for limited access highways.





   03942'99 *
                                  64

 1
           (f) Funds on deposit to the credit of the Michigan

 2
      employment security commission.

 3
           (g) Funds of the Michigan state housing development author-

 4
      ity constituting proceeds of the sale of the authority's notes

 5
      and bonds and repayments of those notes and bonds, under the

 6
      state housing development authority act of 1966, 1966 PA 346,

 7
      MCL 125.1401 to 125.1499c.

 8
           (h) Funds belonging to any political subdivision of this

 9
      state.

10
           (I) FUNDS BELONGING TO ANY FEDERALLY RECOGNIZED INDIAN

11
      TRIBE.

12
           (J) FUNDS REPRESENTING THE PROCEEDS OF A GRANT OR LOAN FROM

13
      A DEPARTMENT OR AGENCY OF THE UNITED STATES, THE AWARD OF WHICH

14
      IS CONDITIONED UPON THE RECIPIENT DEPOSITING THE PROCEEDS IN AN

15
      ACCOUNT SECURED BY A PLEDGE OF ASSETS OF THE DEPOSITORY

16
      INSTITUTION.

17
           (3) The requirements, restrictions, and limitations imposed

18
      by this section shall not apply to the pledging of an obligation

19
      of the United States, direct or fully guaranteed, or both, for

20
      the purpose of securing a deposit of the United States when the

21
      deposit is established coincidentally with the purchase of an

22
      obligation of the United States by or through an institution.

23
           (4) A savings bank may pledge its assets to secure liabili-

24
      ties of all of the following types:

25
           (a) In the case of member banks, liabilities incurred under

26
      the federal reserve act, chapter 6, 38 Stat. 251.  In the case of

27
      nonmember banks, liabilities incurred through borrowing under the



   03942'99 *
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 1
      same conditions as are imposed upon members of the federal

 2
      reserve system by the federal reserve act, chapter 6, 38

 3
      Stat. 251.

 4
           (b) In the case of federal home loan bank members, liabili-

 5
      ties incurred under the federal home loan bank act, chapter 522,

 6
      47 Stat. 725.

 7
           (c) Liabilities incurred under former section 202 of title

 8
      II of the federal farm loan act.

 9
           (d) Liabilities incurred on account of a loan made with the

10
      express approval of the commissioner under section 433(c).

11
           (e) Liabilities incurred on account of borrowings from 1

12
      business day to the next under section 19 of the federal reserve

13
      act, chapter 6, 38 Stat. 251.

14
           (f) Liabilities incurred on account of securities sold under

15
      a repurchase agreement.

16
           Sec. 701.  (1) Subject to approval by the commissioner, a

17
      savings bank may consolidate with any number of consolidating

18
      organizations to form a consolidated savings bank.

19
           (2) The approval of the commissioner shall be based on an

20
      examination or other appropriate analysis of each consolidating

21
      organization and the agreement of consolidation.  A consolidation

22
      shall not be made to defeat or defraud any of the creditors of

23
      any of the consolidating organizations.

24
           (3) A majority of the directors of each organization propos-

25
      ing to consolidate may enter into an agreement, signed by them,

26
      or by their designated representative or representatives  , and

27
      under the seals of the respective organizations,  prescribing the



   03942'99 *
                                  66

 1
      terms and conditions of consolidation, the mode of carrying the

 2
      consolidation into effect and stating other facts required or

 3
      permitted by this act and other applicable law that are to be set

 4
      out in the articles, as can be stated in the case of a consolida-

 5
      tion, to be stated in such altered form as the circumstances of

 6
      the case require, as well as the manner of converting the shares

 7
      or membership interest of each of the consolidating organiza-

 8
      tions, into shares or membership interest of the consolidated

 9
      organization, with other details and provisions as are considered

10
      necessary.

11
           (4) The proposed consolidation agreement shall be submitted

12
      to the members or shareholders of each consolidating organiza-

13
      tion, at a separate meeting called by the directors for the sole

14
      purpose of considering the agreement.  A notice indicating the

15
      time, place, and purpose of the meeting shall be given by publi-

16
      cation at least once a week for 4 consecutive weeks preceding the

17
      date of the meeting.  A copy of the notice shall  also  be

18
       mailed  PROVIDED to each member or shareholder of each consoli-

19
      dating organization at his or her last known address as appears

20
      from the records of the consolidating organizations,  by regis-

21
      tered or certified mail,  at least 10 days prior to the date of

22
      the meeting.  Notice by publication or otherwise shall not be

23
      required if it is waived.  NOTICE SHALL NOT BE REQUIRED IF IT IS

24
      WAIVED BY THE COMMISSIONER OR, IN THE CASE OF INDIVIDUAL NOTICE

25
      TO A SHAREHOLDER, BY THE SHAREHOLDER. At the meeting the proposed

26
      consolidation agreement shall be considered and a vote by ballot,

27
      in person or by proxy, taken for the adoption or rejection of the



   03942'99 *
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 1
      agreement.  At the meeting each share of stock shall entitle the

 2
      holder to 1 vote.  If the votes of members or shareholders of

 3
      each consolidating organization representing NOT LESS THAN 2/3 of

 4
      the total number of shares of each class of each consolidating

 5
      organization's outstanding capital stock, or 2/3 of eligible

 6
      voting members of a mutual organization, are cast for the adop-

 7
      tion of the agreement, that fact shall be certified on the agree-

 8
      ment by  the cashier or assistant cashier, secretary or assistant

 9
      secretary  AN OFFICER of each of the consolidating

10
      organizations.  If the agreement is adopted and certified, it

11
      shall be acknowledged by the president or a vice president of

12
      each of the consolidating organizations, before any officer

13
      authorized to take acknowledgment of deeds, to be the respective

14
      act, deed, and agreement of each of the consolidating

15
      organizations.  If a bank, out-of-state bank, national bank,

16
      association, or savings bank is a consolidating organization and

17
      approval is required by the laws of another state or of the

18
      United States, that organization shall furnish a certified copy

19
      of consent or approval of the appropriate state or federal regu-

20
      lator of the consolidation to the commissioner.  The consolida-

21
      tion agreement required by this section shall be filed with the

22
      commissioner who shall certify upon the agreement the date it was

23
      filed.  The filing with the commissioner shall be the act of con-

24
      solidation of the consolidating organizations.  The consolidation

25
      agreement or a copy certified by the commissioner is evidence of

26
      the agreement and act of consolidation of the organizations and

27
      the observance and performance of all necessary acts and



   03942'99 *
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 1
      conditions precedent to the consolidation.  A bank holding

 2
      company or thrift holding company that is the sole shareholder of

 3
      all of the outstanding issued stock of a savings bank, bank,

 4
      out-of-state bank, national bank, or association that is a con-

 5
      solidating organization in a proposed consolidation may waive the

 6
      shareholder meeting requirement of this subsection.

 7
           (5) In effecting a consolidation, stock of the consolidated

 8
      savings bank may be issued in accordance with this act and as

 9
      provided by the terms of the consolidation agreement free from

10
      any preemptive rights of the shareholders of the respective con-

11
      solidating organizations.

12
           Sec. 703.  (1) When  filing and  the approval AND

13
      CERTIFICATION of the consolidation agreement as required by sec-

14
      tion 701 have been completed, the corporate existence of each

15
      consolidating organization is merged into and continued in the

16
      consolidated savings bank.  To the extent authorized by this act,

17
      the consolidated savings bank possesses all the rights, inter-

18
      ests, privileges, powers, and franchises and is subject to all

19
      the restrictions, disabilities, liabilities, and duties of each

20
      of the consolidating organizations.  The title to all property,

21
      real, personal, and mixed is transferred to the consolidated sav-

22
      ings bank, and shall not revert or be in any way impaired by

23
      reason of this act.

24
           (2) A consolidated savings bank holds and enjoys the same

25
      and all rights of property, franchises, and interests including

26
      appointments, designations, and nominations and all other rights

27
      and interests  in any  AS A fiduciary,  capacity,  in the
   same



   03942'99 *
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 1
      manner and to the same extent as those rights and interests were

 2
      held or enjoyed by each consolidating organization at the time of

 3
      the consolidation.  If a consolidating organization at the time

 4
      of consolidation was acting under appointment of any court  in 

 5
      AS a fiduciary,  capacity,  the consolidated savings bank is

 6
      subject to removal by a court of competent jurisdiction.

 7
           (3) A consolidated savings bank shall file with each court

 8
      or other public tribunal, agency, or officer in any state by

 9
      which any of the consolidating organizations  shall have  HAS

10
      been appointed  in the capacity of  AS A fiduciary,  or agent,
   

11
      and in the court file of each estate, suit, or any other proceed-

12
      ing in which any of them has been acting AS A FIDUCIARY, an affi-

13
      davit setting forth the fact of consolidation, the name of each

   14 consolidating organization, the name of the consolidated savings

15
      bank, the location of its  main  PRINCIPAL office, and the amount

16
      of its capital and surplus.  This subsection does not require

17
      filing of an affidavit related to any consolidating organization

18
      that after the consolidation retains the same corporate name,

19
      charter, and main  office  PRINCIPAL location.

20
           (4) THE LIABILITY OF ANY CONSOLIDATING ORGANIZATION OR OF A

21
      SHAREHOLDER, DIRECTOR, OR OFFICER OF A CONSOLIDATING ORGANIZA-

22
      TION, OR THE RIGHTS OR REMEDIES OF THE CREDITORS OF, OR OTHER

23
      PERSONS TRANSACTING BUSINESS WITH, THE CONSOLIDATING ORGANIZATION

24
      SHALL NOT BE ALTERED OR IMPAIRED AS THE RESULT OF A

25
      CONSOLIDATION.

26
           Sec. 705. (1) A savings bank, an out-of-state bank, or a

27
      national bank that consolidates its operations with 1 or more



   03942'99 *
                                  70

 1
      banks, out-of-state banks, national banks, associations, or

 2
      savings banks may operate the consolidated or acquired bank,

 3
      out-of-state bank, national bank, association, or savings bank

 4
      branch or branches located in this state as a branch or branches

 5
      of the consolidated or acquired savings bank.

 6
           (2) A CONSOLIDATED BANK OR CONSOLIDATED ORGANIZATION MAY

 7
      OPERATE ANY BRANCHES AND PRINCIPAL OFFICES LOCATED IN THIS STATE

 8
      OF THE CONSOLIDATING ORGANIZATIONS WITHOUT PROVIDING THE NOTICE

 9
      REQUIRED BY SECTION 417.

10
           Sec. 706.  (1) As used in this section:

11
           (a) "Existing association" means a MUTUAL OR stock associa-

12
      tion engaged in the savings and loan business or federal savings

13
      bank business prior to the consolidation under this section.

14
           (b) "Existing bank" means a savings bank, national banking

15
      association, or state chartered bank engaged in the business of

16
      banking prior to the consolidation under this section.

17
           (c) "New bank" means a savings bank not engaged in the busi-

18
      ness of banking prior to the consolidation under this section.

19
           (2) Notwithstanding any other section of this act:

20
           (a) Persons as provided in section 301 may organize and

21
      incorporate as the incorporator or incorporators a new bank

22
      having its principal office in the same city or village as the

23
      principal office of an existing bank or existing association in

24
      the manner specified in section 302, but without regard to sec-

25
      tion 302(2) and (3)(b), (c), and (e), and section 304, if the new

26
      bank is organized for the sole purpose of effecting its

27
      consolidation under section 701 with an existing bank or existing



   03942'99 *
                                  71

 1
      association having its principal office in the same city or

 2
      village as the new bank and if upon completion of the consolida-

 3
      tion a bank holding company becomes the owner of all of the out-

 4
      standing voting shares of the consolidated organization, other

 5
      than shares necessary to qualify directors.  The new bank and the

 6
      existing bank may consolidate under the charter of either bank.

 7
      The new bank and the existing association shall consolidate under

 8
      the charter of the new bank and sections 701, 703, and 705 are

 9
      applicable with respect to the consolidation except that the

10
      agreement of consolidation may provide that shares of either or

11
      both the consolidating organizations, in lieu of being converted

12
      into shares of the consolidated organization, will be converted

13
      into shares or other securities of the bank holding company.

14
           (b) A shareholder of the existing bank or existing associa-

15
      tion who votes against the consolidation, or who has given notice

16
      in writing to that bank or association at or prior to the meeting

17
      called for the purpose of considering the agreement of consolida-

18
      tion that he or she dissents from the consolidation, is entitled

19
      to receive in cash from the consolidated organization the fair

20
      value of all shares held by him or her, if and when the consoli-

21
      dation is consummated, upon written request made to the consoli-

22
      dated organization at any time within 30 days after the date of

23
      consummation of the consolidation, accompanied by the surrender

24
      of his or her stock certificates.  Upon the filing of the written

25
      request and the surrender of stock certificates, the shareholder

26
      shall cease to have any of the rights of a shareholder except the

27
      right to be paid the fair value of his or her shares.  The



   03942'99 *
                                  72

 1
      request having been made, shall not be withdrawn except with the

 2
      written consent of the consolidated organization.  The fair value

 3
      of the shares shall be determined, as of the date on which the

 4
      meeting of shareholders of the existing bank or existing associa-

 5
      tion was held adopting the agreement of consolidation, by a qual-

 6
      ified and independent appraiser selected by the commissioner upon

 7
      written application filed by a dissenting shareholder entitled to

 8
      receive the fair value of his or her shares, or by the consoli-

 9
      dated organization.  The appraiser selected shall file a written

10
      report of his or her appraisal with the commissioner, who in turn

11
      shall forward copies to all interested parties.  The valuation

12
      determined by the appraiser is final and binding on all parties

13
      as to the fair value of the shares.  The consolidated organiza-

14
      tion shall pay to each dissenting shareholder entitled the fair

15
      value of his or her shares within 30 days following the receipt

16
      of the written report of the appraiser.  The fees and expenses of

17
      the appraisal, which shall be approved by the commissioner, shall

18
      be paid by the consolidated organization.  The agreement of con-

19
      solidation shall provide the manner of disposing of the shares of

20
      the existing bank or existing association surrendered by the dis-

21
      senting shareholders.

22
           (c)  The consolidated organization, whether it is the new

23
      bank or the existing bank, shall have the right, notwithstanding

24
      any of the requirements, restrictions, and limitations of section

25
      417, or any other provision of law, to retain and continue to

26
      operate or to establish and operate as its principal office the

27
      principal office of the existing bank, and as its branches all



   03942'99 *
                                  73

 1
      branches of the existing bank, that were legally operating

 2
      immediately prior to the consolidation or merger, whether the

 3
      principal office or the branch or branches could, at the time the

 4
      consolidation or merger becomes effective, have been established

 5
      or reestablished consistently with the requirements, restric-

 6
      tions, and limitations of section 417, or any other provision of

 7
      law.  For the purposes of this section, consolidation and merger

 8
      are interchangeable and each means and includes the consolidation

 9
      or merger of savings banks, federal or state savings and loan

10
      associations, federal savings banks, state chartered banks, or of

11
      national banking associations in any manner provided by this act

12
      or by the national bank laws.  THE COMMISSIONER SHALL APPROVE OR

13
      DISAPPROVE AN APPLICATION SUBMITTED UNDER THIS SECTION IN WRITING

14
      WITHIN 30 DAYS AFTER ACCEPTANCE OF THE APPLICATION OR THE LAST

15
      AMENDMENT OR SUPPLEMENT TO THE APPLICATION.

16
           Sec. 708.  (1) Upon the affirmative  votes  VOTE of the

17
       shareholders representing 2/3 of the total number of shares 

18
      MAJORITY OF VOTES CAST of each class of its outstanding capital

19
      stock, a savings bank may be converted under the laws of this

20
      state into a stock association or under the laws of the United

21
      States into a national banking association or federal savings

22
      bank.

23
           (2) The conversion of a savings bank into a stock associa-

24
      tion or a national banking association shall not release the sav-

25
      ings bank from its obligations to pay and discharge all the

26
      liabilities created by law or incurred by it before becoming a

27
      stock association or a national banking association or any tax



   03942'99 *
                                  74

 1
      imposed by the laws of this state up to the date of its becoming

 2
      a stock association or a national banking association in propor-

 3
      tion to the time that has elapsed since the last preceding pay-

 4
      ment or any assessment, penalty, or forfeiture imposed or

 5
      incurred under the laws of this state up to the date of its

 6
      becoming a stock association or a national banking association.

 7
       No  A conversion shall NOT be made to defeat or defraud any of

 8
      the creditors of the savings bank.

 9
           (3) Certified copies of all proceedings by the directors and

10
      shareholders of the stock association or savings bank shall be

11
      filed with the commissioner  in triplicate  and in addition, the

12
      savings bank shall furnish a certified copy of consent or

13
      approval of the comptroller of the currency or office of thrift

14
      supervision to the conversion if the consent or approval is

15
      required by federal law.  One copy of the proceedings shall be

16
      filed with the bureau and the commissioner shall certify and for-

17
      ward 1 copy of the proceedings to the county clerk of the county

18
      in which the converted savings bank is located and 1 to the cor-

19
      poration division, department of treasury. 

20
           (4) Upon the affirmative  votes  VOTE of  2/3 of the total

21
      membership  THE MAJORITY OF THE VOTES CAST of a mutual savings

22
      bank, the mutual savings bank may be converted under the laws of

23
      this state into a mutual state savings and loan association or

24
      under the laws of the United States into a mutual federal savings

25
      and loan association or federal savings bank.

26
           (5) The conversion of a mutual savings bank into a state or

27
      federal mutual savings and loan association shall not release the



   03942'99 *
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 1
      mutual savings bank from its obligations to pay and discharge all

 2
      the liabilities created by law or incurred by it before becoming

 3
      a state or federal savings and loan association or any tax

 4
      imposed by the laws of this state up to the date of its becoming

 5
      a state or federal savings and loan association in proportion to

 6
      the time that has elapsed since the last preceding payment or any

 7
      assessment, penalty, or forfeiture imposed or incurred under the

 8
      laws of this state up to the date of its becoming a state or fed-

 9
      eral savings and loan association.  No  A conversion shall NOT

10
      be made to defeat or defraud any of the creditors of the mutual

11
      savings bank.

12
           (6) Certified copies of all proceedings by the members of

13
      the mutual savings bank shall be filed with the commissioner,  in

14
      triplicate,  and in addition the mutual savings bank shall fur-

15
      nish a certified copy of consent or approval of the office of

16
      thrift supervision to the conversion if the consent or approval

17
      is required by federal law.  One copy of the proceedings shall be

18
      filed with the bureau.  and the commissioner shall certify and

19
      forward 1 copy of the proceedings to the county clerk of the

20
      county in which the converted mutual savings bank is located. 

21
           Sec. 709.  (1) With the approval of the commissioner,

22
       subject to section 214(3),  and upon the affirmative  votes
   

23
      VOTE of the  shareholders representing 2/3 of the total number of

24
      shares  MAJORITY OF THE VOTES CAST of each class of its outstand-

25
      ing capital stock, a national banking association, federal sav-

26
      ings bank, federal savings and loan association, or other

27
      federally chartered shareholder-owned financial institution doing



   03942'99 *
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 1
      business in this state and having an unimpaired capital and

 2
      surplus sufficient to entitle it to become a savings bank under

 3
      the provisions of existing laws of this state may be converted

 4
      into a savings bank if the conversion is not in contravention of

 5
      any laws of the United States.  In such case, the articles of

 6
      incorporation may be executed by a majority of the directors of

 7
      the national banking association, federal savings bank, federal

 8
      savings and loan association, or other federally chartered finan-

 9
      cial institution.  A majority of the directors, after executing

10
      the articles of incorporation, shall have the power to execute

11
      all other papers and to do whatever may be required to complete

12
      the organization of the mutual state savings and loan associa-

13
      tion, mutual state savings bank, or other member-owned state

14
      chartered financial institution as a savings bank.

15
           (2) The shares of the savings bank may continue to be for

16
      the same amount each as they were before the conversion, and the

17
      directors may continue to be directors of the savings bank until

18
      others have been elected or appointed under the laws of this

19
      state.

20
           (3) The approval of the commissioner shall be based on an

21
      examination of the national banking association, federal savings

22
      bank, federal savings and loan association, or other federally

23
      chartered financial institutions and of the proceedings had by

24
      its directors and shareholders with respect to the conversion.

25
           (4) A conversion shall not be made to defeat or defraud any

26
      of the creditors of the national banking association, federal





   03942'99 *
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 1
      savings bank, federal savings and loan association, or other

 2
      federally chartered financial institution.

 3
           (5) Subject to conditions as he or she may prescribe, the

 4
      commissioner may permit the converted savings bank to retain and

 5
      carry, at a value determined by the commissioner, assets of the

 6
      converting national banking association, federal savings bank,

 7
      federal savings and loan association, or other federally

 8
      chartered financial institution as do not conform to the legal

 9
      requirements relative to assets acquired and held by savings

10
      banks.

11
           Sec. 710.  (1) With the approval of the commissioner,

12
       subject to section 214(3),  and upon the affirmative vote of

13
       shareholders representing 2/3 of the total number of shares  THE

14
      MAJORITY OF THE VOTES CAST of each class of its outstanding capi-

15
      tal stock, a state chartered commercial bank, state chartered

16
      savings and loan association, or other state chartered

17
      shareholder-owned financial institution having an unimpaired cap-

18
      ital and surplus sufficient to entitle it to become a savings

19
      bank under the provisions of existing laws of this state may be

20
      converted into a savings bank.  In such case, the articles of

21
      incorporation may be executed by a majority of the directors of

22
      the state chartered commercial bank, state chartered savings and

23
      loan association, or other state chartered financial

24
      institution.  A majority of the directors, after executing the

25
      articles of incorporation, may execute all other papers and do

26
      whatever may be required to complete its organization as a

27
      savings bank.



   03942'99 *
                                  78

 1
           (2) The shares or membership interests of the savings bank

 2
      may continue to be for the same amount each as they were before

 3
      the conversion, and the directors may continue to be directors of

 4
      the savings bank until others have been elected or appointed

 5
      under the laws of this state.

 6
           (3) The approval of the commissioner shall be based on an

 7
      examination of the state chartered commercial bank, state

 8
      chartered savings and loan association, or other state chartered

 9
      financial institution and of the proceedings had by its directors

10
      and shareholders with respect to the conversion.

11
           (4) A conversion shall not be made to defeat or defraud any

12
      of the creditors of the state chartered commercial bank, state

13
      chartered savings and loan association, or other state chartered

14
      financial institution.

15
           (5) Subject to conditions as he or she may prescribe, the

16
      commissioner may permit the converted savings bank to retain and

17
      carry, at a value determined by the commissioner, assets of the

18
      converting state chartered commercial bank, state chartered sav-

19
      ings and loan association, or other state chartered financial

20
      institution which do not conform to the legal requirements rela-

21
      tive to assets acquired and held by savings banks.

22
           Sec. 711.  (1) With the approval of the commissioner,

23
       subject to section 214(3),  and upon the affirmative  votes
   

24
      VOTE of  2/3 of the total membership of  THE MAJORITY OF THE

25
      VOTES CAST, a mutual federal savings and loan association, mutual

26
      federal savings bank, or other member-owned federally chartered

27
      financial institution doing business in this state  and having an



   03942'99 *
                                  79

 1
      unimpaired capital and surplus sufficient to entitle it to become

 2
      a savings bank under the provisions of existing laws of this

 3
      state  may be converted into a mutual  or stock  savings
   bank if

 4
      the conversion is not in contravention of any laws of the United

 5
      States.  In such case, the articles of incorporation may be exe-

 6
      cuted by a majority of the directors of the federal savings and

 7
      loan association, federal savings bank, or other member-owned

 8
      federally chartered financial institution.  A majority of the

 9
      directors, after executing the articles of incorporation, shall

10
      have the power to execute all other papers and to do whatever may

11
      be required to complete its organization as a savings bank.

12
           (2) The shares or membership interests of the savings bank

13
      may continue to be for the same amount each as they were before

14
      the conversion, and the directors may continue to be directors of

15
      the savings bank until others have been elected or appointed

16
      under the laws of this state.

17
           (3) The approval of the commissioner shall be based on an

18
      examination of the federal savings and loan association, federal

19
      savings bank, or other member-owned federally chartered financial

20
      institution and of the proceedings had by its directors and mem-

21
      bers with respect to the conversion.

22
           (4) A conversion shall not be made to defeat or defraud any

23
      of the creditors of the federal savings and loan association,

24
      federal savings bank, or other member-owned federally chartered

25
      financial institution.

26
           (5) Subject to conditions as he or she may prescribe, the

27
      commissioner may permit the converted savings bank to retain and



   03942'99 *
                                  80

 1
      carry, at a value determined by the commissioner, assets of the

 2
      converting federal savings and loan association, federal savings

 3
      bank, or other member-owned federally chartered financial insti-

 4
      tution as do not conform to the legal requirements relative to

 5
      assets acquired and held by savings banks.

 6
           SEC. 711A.  (1) WITH THE APPROVAL OF THE COMMISSIONER, AND

 7
      UPON THE AFFIRMATIVE VOTE OF 2/3 OF VOTES CAST, A MUTUAL FEDERAL

 8
      SAVINGS AND LOAN ASSOCIATION, MUTUAL FEDERAL SAVINGS BANK, OR

 9
      OTHER MEMBER-OWNED FEDERALLY CHARTERED FINANCIAL INSTITUTION

10
      DOING BUSINESS IN THIS STATE MAY BE CONVERTED INTO A STOCK SAV-

11
      INGS BANK IF THE CONVERSION IS NOT IN CONTRAVENTION OF ANY LAWS

12
      OF THE UNITED STATES.  IN SUCH CASE, THE ARTICLES OF INCORPORA-

13
      TION MAY BE EXECUTED BY A MAJORITY OF THE DIRECTORS OF THE FED-

14
      ERAL SAVINGS AND LOAN ASSOCIATION, FEDERAL SAVINGS BANK, OR OTHER

15
      MEMBER-OWNED FEDERALLY CHARTERED FINANCIAL INSTITUTION.  A MAJOR-

16
      ITY OF THE DIRECTORS, AFTER EXECUTING THE ARTICLES OF INCORPORA-

17
      TION, SHALL HAVE THE POWER TO EXECUTE ALL OTHER PAPERS AND TO DO

18
      WHATEVER MAY BE REQUIRED TO COMPLETE ITS ORGANIZATION AS A SAV-

19
      INGS BANK.

20
           (2) THE SHARES OR MEMBERSHIP INTERESTS OF THE SAVINGS BANK

21
      MAY CONTINUE TO BE FOR THE SAME AMOUNT EACH AS THEY WERE BEFORE

22
      THE CONVERSION, AND THE DIRECTORS MAY CONTINUE TO BE DIRECTORS OF

23
      THE SAVINGS BANK UNTIL OTHERS HAVE BEEN ELECTED OR APPOINTED

24
      UNDER THE LAWS OF THIS STATE.

25
           (3) THE APPROVAL OF THE COMMISSIONER SHALL BE BASED ON AN

26
      EXAMINATION OF THE FEDERAL SAVINGS AND LOAN ASSOCIATION, FEDERAL

27
      SAVINGS BANK, OR OTHER MEMBER-OWNED FEDERALLY CHARTERED FINANCIAL



   03942'99 *
                                  81

 1
      INSTITUTION AND OF THE PROCEEDINGS HAD BY ITS DIRECTORS AND

 2
      MEMBERS WITH RESPECT TO THE CONVERSION.

 3
           (4) A CONVERSION SHALL NOT BE MADE TO DEFEAT OR DEFRAUD ANY

 4
      OF THE CREDITORS OF THE FEDERAL SAVINGS AND LOAN ASSOCIATION,

 5
      FEDERAL SAVINGS BANK, OR OTHER MEMBER-OWNED FEDERALLY CHARTERED

 6
      FINANCIAL INSTITUTION.

 7
           (5) SUBJECT TO CONDITIONS AS HE OR SHE MAY PRESCRIBE, THE

 8
      COMMISSIONER MAY PERMIT THE CONVERTED SAVINGS BANK TO RETAIN AND

 9
      CARRY, AT A VALUE DETERMINED BY THE COMMISSIONER, ASSETS OF THE

10
      CONVERTING FEDERAL SAVINGS AND LOAN ASSOCIATION, FEDERAL SAVINGS

11
      BANK, OR OTHER MEMBER-OWNED FEDERALLY CHARTERED FINANCIAL INSTI-

12
      TUTION AS DO NOT CONFORM TO THE LEGAL REQUIREMENTS RELATIVE TO

13
      ASSETS ACQUIRED AND HELD BY SAVINGS BANKS.

14
           Sec. 712.  (1) With the approval of the commissioner,

15
       subject to section 214(3),  and upon the affirmative  votes of

16
      2/3 of the total membership of  VOTE OF THE MAJORITY OF THE VOTES

17
      CAST, a mutual state savings and loan association, or mutual

18
      state savings bank, or other member-owned state chartered finan-

19
      cial institution  having an unimpaired capital and surplus suffi-

20
      cient to entitle it to become a savings bank under the provisions

21
      of existing laws of this state  may be converted into a mutual

22
       or stock  savings bank.  In such case, the articles of incorpo-

23
      ration may be executed by a majority of the directors of the sav-

24
      ings and loan association, or other member-owned state chartered

25
      financial institution.  A majority of the directors, after exe-

26
      cuting the articles of incorporation, may execute all other





   03942'99 *
                                  82

 1
      papers and do whatever may be required to complete its

 2
      organization as a savings bank.

 3
           (2) The shares or membership interests of the savings bank

 4
      may continue to be for the same amount each as they were before

 5
      the conversion, and the directors may continue to be directors of

 6
      the savings bank until others have been elected or appointed

 7
      under the laws of this state.

 8
           (3) The approval of the commissioner shall be based on an

 9
      examination of the savings and loan association, or other

10
      member-owned state chartered financial institution and of the

11
      proceedings had by its directors and members with respect to the

12
      conversion.

13
           (4) A conversion shall not be made to defeat or defraud any

14
      of the creditors of the savings and loan association or other

15
      member-owned state chartered financial institution.

16
           (5) Subject to conditions as he or she may prescribe, the

17
      commissioner may permit the converted savings bank to retain and

18
      carry, at a value determined by the commissioner, assets of the

19
      converting savings and loan association or other member-owned

20
      state chartered financial institution which do not conform to the

21
      legal requirements relative to assets acquired and held by sav-

22
      ings banks.

23
           SEC. 712A.  (1) WITH THE APPROVAL OF THE COMMISSIONER, AND

24
      UPON THE AFFIRMATIVE VOTE OF 2/3 OF THE VOTES CAST, A MUTUAL

25
      STATE SAVINGS AND LOAN ASSOCIATION, OR MUTUAL STATE SAVINGS BANK,

26
      OR OTHER MEMBER-OWNED STATE CHARTERED FINANCIAL INSTITUTION MAY

27
      BE CONVERTED INTO A STOCK SAVINGS BANK.  IN SUCH CASE, THE



   03942'99 *
                                  83

 1
      ARTICLES OF INCORPORATION MAY BE EXECUTED BY A MAJORITY OF THE

 2
      DIRECTORS OF THE SAVINGS AND LOAN ASSOCIATION, OR OTHER

 3
      MEMBER-OWNED STATE CHARTERED FINANCIAL INSTITUTION.  A MAJORITY

 4
      OF THE DIRECTORS, AFTER EXECUTING THE ARTICLES OF INCORPORATION,

 5
      MAY EXECUTE ALL OTHER PAPERS AND DO WHATEVER MAY BE REQUIRED TO

 6
      COMPLETE ITS ORGANIZATION AS A SAVINGS BANK.

 7
           (2) THE SHARES OR MEMBERSHIP INTERESTS OF THE SAVINGS BANK

 8
      MAY CONTINUE TO BE FOR THE SAME AMOUNT EACH AS THEY WERE BEFORE

 9
      THE CONVERSION, AND THE DIRECTORS MAY CONTINUE TO BE DIRECTORS OF

10
      THE SAVINGS BANK UNTIL OTHERS HAVE BEEN ELECTED OR APPOINTED

11
      UNDER THE LAWS OF THIS STATE.

12
           (3) THE APPROVAL OF THE COMMISSIONER SHALL BE BASED ON AN

13
      EXAMINATION OF THE SAVINGS AND LOAN ASSOCIATION, OR OTHER

14
      MEMBER-OWNED STATE CHARTERED FINANCIAL INSTITUTION AND OF THE

15
      PROCEEDINGS HAD BY ITS DIRECTORS AND MEMBERS WITH RESPECT TO THE

16
      CONVERSION.

17
           (4) A CONVERSION SHALL NOT BE MADE TO DEFEAT OR DEFRAUD ANY

18
      OF THE CREDITORS OF THE SAVINGS AND LOAN ASSOCIATION OR OTHER

19
      MEMBER-OWNED STATE CHARTERED FINANCIAL INSTITUTION.

20
           (5) SUBJECT TO CONDITIONS AS HE OR SHE MAY PRESCRIBE, THE

21
      COMMISSIONER MAY PERMIT THE CONVERTED SAVINGS BANK TO RETAIN AND

22
      CARRY, AT A VALUE DETERMINED BY THE COMMISSIONER, ASSETS OF THE

23
      CONVERTING SAVINGS AND LOAN ASSOCIATION OR OTHER MEMBER-OWNED

24
      STATE CHARTERED FINANCIAL INSTITUTION WHICH DO NOT CONFORM TO THE

25
      LEGAL REQUIREMENTS RELATIVE TO ASSETS ACQUIRED AND HELD BY SAV-

26
      INGS BANKS.





   03942'99 *
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 1
           Sec. 713.  (1) If a conversion under sections 709 to 713

 2
      becomes effective, all the property of the converting

 3
      organization, including all its rights, title, and interest in

 4
      and to all property of whatsoever kind, whether real, personal,

 5
      or mixed, and things in action, and every right, privilege, and

 6
      interest, and asset of any conceivable value or benefit then

 7
      existing, belonging, or pertaining to it, or which would inure to

 8
      it, shall immediately by act of law and without any conveyance or

 9
      transfer and without any further act or deed, be vested in and

10
      become the property of the converted organization, which shall

11
      have, hold, and enjoy the same in its own right as fully and to

12
      the same extent as it was possessed, held, and enjoyed by the

13
      converting organization.

14
           (2) The converted organization shall be deemed to be a con-

15
      tinuation of the entity and of the identity of the converting

16
      organization.  All the rights, obligations, and relations of the

17
      converting organization to or in respect to any person, estate,

18
      creditor, depositor, trustee, or beneficiary of any trust, and

19
      in, or in respect to, any executorship or trusteeship or any

20
      other trust or fiduciary function, shall remain unimpaired.

21
           (3) The converted organization shall succeed to all rights,

22
      obligations, relations, trusts, duties, and liabilities and shall

23
      execute and perform each and every trust and relation in the same

24
      manner as if the converted organization had itself assumed the

25
      trust or relation and the obligations and liabilities.

26
           (4) If the converting organization is acting as

27
      administrator, co-administrator, executor, co-executor, trustee,



   03942'99 *
                                  85

 1
      or co-trustee of or in respect to any estate or trust being

 2
      administered under the laws of this state, the relation, as well

 3
      as any other or similar fiduciary relations, and all rights,

 4
      privileges, duties, and obligations shall remain unimpaired and

 5
      shall continue into and in the converted organization from and as

 6
      of the time of taking effect of the conversion, irrespective of

 7
      the date when the relation may have been created or established

 8
      and irrespective of the date of any trust agreement or the date

 9
      of the death of any testator or decedent whose estate is being

10
      administered.

11
           (5) A conversion shall not effect under the laws of this

12
      state a renunciation or revocation of any letters of administra-

13
      tion or letters testamentary pertaining to the relation nor a

14
      removal or resignation from any executorship or trusteeship or

15
      other fiduciary relationship nor have the effect as if the execu-

16
      tor or trustee or other fiduciary had died or otherwise become

17
      incompetent to act.

18
           (6) A savings bank or national banking association or stock

19
      association or federal savings bank resulting from a conversion

20
      under sections 709 to 713 shall have the right, notwithstanding

21
      any of the requirements, restrictions, and limitations of section

22
      417 to the contrary, to retain and continue to operate any and

23
      all branches of the converting organization that were in lawful

24
      operation immediately prior to conversion, without being required

25
      to establish or reestablish any branch or branches under

26
      section 417 and irrespective of whether any branch or branches

27
      could, at the time the conversion becomes effective, have been



   03942'99 *
                                  86

 1
      established or reestablished as a branch or branches of the

 2
      converting or converted organization, consistently with the

 3
      requirements, restrictions, and limitations of section 417.  IF A

 4
      CONVERSION BECOMES EFFECTIVE UNDER THIS ACT, ALL OF THE FOLLOWING

 5
      SHALL APPLY:

 6
           (A) THE CONVERTED ORGANIZATION SHALL BE CONSIDERED A CONTIN-

 7
      UATION OF THE BODY CORPORATE OF THE CONVERTING ORGANIZATION.

 8
           (B) THE TITLE TO ALL PROPERTY, REAL OR PERSONAL, INCLUDING

 9
      ANY RIGHTS THAT MAY BE ATTACHED TO THE PROPERTY, OR ANY THING IN

10
      ACTION, IS IMMEDIATELY TRANSFERRED AND VESTED IN THE CONVERTED

11
      ORGANIZATION TO THE SAME EXTENT AS IT WAS IN THE CONVERTING

12
      ORGANIZATION.

13
           (C) ALL ASSETS, RIGHTS, PRIVILEGES, OR INTERESTS BELONGING

14
      OR ATTRIBUTED TO THE CONVERTING ORGANIZATION ARE IMMEDIATELY

15
      TRANSFERRED AND VESTED IN THE CONVERTED ORGANIZATION TO THE SAME

16
      EXTENT AS THEY WERE IN THE CONVERTING ORGANIZATION.

17
           (D) ALL LIABILITIES, RESTRICTIONS, AND DISABILITIES OF THE

18
      CONVERTING ORGANIZATION, ITS SHAREHOLDERS, OR ITS OFFICERS ARE

19
      IMMEDIATELY TRANSFERRED TO THE CONVERTED ORGANIZATION TO THE SAME

20
      EXTENT AS THEY WERE IN THE CONVERTING ORGANIZATION.

21
           (E) IF THE CONVERTING ORGANIZATION IS ACTING IN ANY FIDU-

22
      CIARY CAPACITY UNDER THE LAWS OF THIS STATE, THE FOLLOWING

23
      APPLY:

24
           (i) ALL RIGHTS, PRIVILEGES, AND OBLIGATIONS OF THE CONVERT-

25
      ING ORGANIZATION SHALL REMAIN UNIMPAIRED AND SHALL CONTINUE IN

26
      THE CONVERTED ORGANIZATION IRRESPECTIVE OF THE DATE WHEN THE

27
      FIDUCIARY RELATIONSHIP WAS CREATED.



   03942'99 *
                                  87

 1
           (ii) IF THE CONVERTING ORGANIZATION HAD BEEN APPOINTED BY A

 2
      COURT OR GOVERNMENTAL TRIBUNAL, AGENCY, OR OFFICER, THE CONVERTED

 3
      ORGANIZATION SHALL FILE AN AFFIDAVIT WITH THE APPOINTING AUTHOR-

 4
      ITY SETTING FORTH THE FACT OF CONVERSION, THE NAME OF THE CON-

 5
      VERTED ORGANIZATION, THE LOCATION OF ITS PRINCIPAL OFFICE, AND

 6
      THE AMOUNT OF ITS CAPITAL AND SURPLUS.

 7
           (iii) THE CONVERTED ORGANIZATION ACTING AS A FIDUCIARY BY

 8
      APPOINTMENT OF A COURT IS SUBJECT TO REMOVAL BY A COURT OF COMPE-

 9
      TENT JURISDICTION.

10
           (F) THE CONVERTED ORGANIZATION MAY RETAIN AND CONTINUE TO

11
      OPERATE ANY EXISTING BRANCH, OR OPEN ANY APPROVED BRANCH, OF THE

12
      CONVERTING ORGANIZATION.

13
           (G) ANY RIGHTS OR REMEDIES OF THE DEPOSITORS, CREDITORS, OR

14
      OTHER PERSONS TRANSACTING BUSINESS WITH THE CONVERTING ORGANIZA-

15
      TION SHALL NOT BE REDUCED OR IMPAIRED AS THE RESULT OF A

16
      CONVERSION.

17
           (H) WHETHER OR NOT IT MAINTAINS A PRESENCE IN THIS STATE, A

18
      CONVERTED ORGANIZATION OR ANY OF ITS SUCCESSORS IN INTEREST IS

19
      SUBJECT TO SERVICE OF PROCESS IN A PROCEEDING IN THIS STATE FOR

20
      ENFORCEMENT OF ANY OBLIGATION INCURRED IN THIS STATE BY THE CON-

21
      VERTING ORGANIZATION.

22
           (I) AN ACTION OR PROCEEDING AGAINST THE CONVERTING ORGANIZA-

23
      TION IN A COURT OR OTHER GOVERNMENTAL TRIBUNAL MAY BE PROSECUTED

24
      TO JUDGMENT AS IF THE CONVERSION HAD NOT TAKEN PLACE, OR THE CON-

25
      VERTED ORGANIZATION MAY BE SUBSTITUTED IN PLACE OF THE CONVERTING

26
      ORGANIZATION.  THIS SUBSECTION SHALL NOT CREATE ANY NEW CAUSE OF





   03942'99 *
                                  88

 1
      ACTION AGAINST THE CONVERTING ORGANIZATION AS A RESULT OF THE

 2
      CONVERSION.

 3
           Sec. 804.  A savings bank subject to this act shall have

 4
      the same tax exemptions as a savings and loan association under

 5
      section 458 of Act No. 156 of the Public Acts of 1964, being sec-

 6
      tion 489.858 of the Michigan Compiled Laws.  A SAVINGS BANK

 7
      SUBJECT TO THIS ACT SHALL HAVE THE FOLLOWING TAX EXEMPTIONS:

 8
           (A) ALL MORTGAGES OR OTHER SECURITIES HELD BY SAVINGS BANKS

 9
      ARE EXEMPT FROM ALL MUNICIPAL OR OTHER TAXES UNDER THE LAWS OF

10
      THIS STATE.

11
           (B) ALL PERSONAL PROPERTY OWNED BY SAVINGS BANKS IS EXEMPT

12
      FROM TAXATION.

13
           Enacting section 1.  Section 425 of the savings bank act,

14
      1996 PA 354, MCL 487.3425, is repealed.

15
           Enacting section 2.  This amendatory act does not take

16
      effect unless all of the following bills of the 90th Legislature

17
      are enacted into law:

18
           (a) Senate Bill No. _____ or House Bill No. 5907 (request

19
      no. 06708'00).

20
           (b) Senate Bill No. _____ or House Bill No. 5908 (request

21
      no. 06709'00).















   03942'99 *          Final page.                          MRM