CHAPTER 218

RELATING TO BUILDING AND LOAN ASSOCIATIONS

AN ACT TO AMEND TITLE 5, DELAWARE CODE, RELATING TO BUILDING AND LOAN ASSOCIATIONS.

Be it enacted by the General Assembly of the State of Delaware:

Section 1. § 1701, Title 5, Delaware Code, is amended by adding thereto the following definitions :

Insured Loan. The term "insured loan" means a loan that is insured, or as to which the mortgagee is insured, or as to which a commitment for any insurance has been made under the provisions of either the National Housing Act or the Servicemen's Readjustment Act of 1944, as those acts are now, or may hereafter be, amended.

Guaranteed Loan. The term "guaranteed loan" means a loan that is guaranteed or as to which a commitment to guarantee has been made under the provisions of the Servicemen's Readjustment Act of 1944, as that act is now, or may hereafter be, amended.

Section 2. § 1904, Title 5, Delaware Code, is amended by striking out and repealing all of said section by inserting and enacting in lieu thereof the following new § 1904:

§ 1904. Dividends

Every building and loan association doing business in this State may provide in its by-laws a schedule of varying rates of dividends for different classes of shares of stock, and different types of shares within any class.

Section 3. § 1905, Title 5, Delaware Code, is amended by striking out and repealing all of said section by inserting and enacting in lieu thereof the following new § 1905:

§ 1905. Direct-reduction loans

(a) Building and loan associations incorporated under this Code or any other law of this State may make direct-reduction loans upon bonds and mortgages against real estate located in this State. A direct-reduction loan means a loan repayable in consecutive monthly installment, equal or unequal, beginning not later than 60 days after the date of the advance of the loan, sufficient to retire the debt, interest and principal within 30 years except that if the loan be insured or guaranteed loan as hereinbefore defined, within the period acceptable to the insuring or guaranteeing agency. In the case of construction loans, the first payment shall not be later than 6 months after the date of the first advance.

(b) Notwithstanding any other provision or provisions of this Act, an association may grant direct-reduction loans to any of its mortgage borrowers for repair, alteration or improvement of the mortgaged real estate on the obligation of a note or bond which is insured or will be insured under the National Housing Act, as that Act is now, or may hereafter be, amended or supplemented. Such loans may be granted in any amount and on any terms that may be acceptable to the Federal Housing Administration.

Section 4. Chapter 19, Title 5, of the Delaware Code, is amended by adding the following new sections to read as follows :

§ 1915. Undivided profits

Any building and loan association may, at the discretion of its Board of Directors, set aside any surplus net income or other available earnings which remain after reserve and dividend requirements have been met and retain such funds in an undivided profits account: provided, that the total undivided profits on hand at any one time shall not exceed ten per cent of the association's paid in capital plus earnings.

§ 1916. Fiscal agent

United States, and, when so designated by the Secretary of the Treasury, it shall perform, under such regulations as he may prescribe, all such reasonable duties as fiscal agent of the United States as he may require, and when authorized shall have power to act as fiscal agent for any instrumentality of the United States or of any instrumentality of this State.

§ 1917. Investment by minors

(a) Any building and loan association in this State may receive funds for investment in the shares of the association from or in the name of a minor. When an investment shall be made in the shares of a building and loan association by a minor or in the name of a minor, the funds shall be held for the benefit of the investor in the same way and to the same extent as if the investor were an adult person. A minor may make drafts upon or withdrawals of his investment to the same extent as if he were an adult person and the funds shall be paid, together with dividends or interest thereon, to the person in whose name the investment shall have been made, or upon his written order. The receipt or acquittance of a minor shall be a valid and sufficient release and discharge to the association for the return of any investment, dividends or interest, or any part thereof.

() Any building and loan association shall have the right to refuse to receive funds offered for investment by or in the name of a minor.

(a) A minor investing funds in the shares of a building and loan association shall be subject, in all transactions connected therewith, as between himself and the association, to all obligations, equities and defenses to which an adult person would be subject in similar transactions.

§ 1918. Investments standing in the name of decedents

Building and loan associations may pay out the investment of decedents, together with any dividends or interest thereon, without requiring letters of administration to be issued upon the estates of such decedents, when and as provided by Sections 2305 and 2306 of Title 12.

§ 1919. Investments standing in the names of two or more persons

When an investment in the shares of any building and loan association is made in the name of two or more persons, deliverable or payable to either, or to the survivor or survivors, the investment, or any part thereof, or the increase thereof, may be delivered or paid to either of the persons, or to the survivor or survivors, in due course of business.

§ 1920. Investments in trust

When an investment is made by any person in the shares of a building and loan association in this State, said investment in trust for another, and no other or further notice of the existence and terms of a legal and valid trust has been given in writing to the association, then, in the event of the death of the trustee, the investment or any part thereof, or the increase thereof, may be paid to the person for whose benefit the investment was made, or his legal representative, and the association shall be discharged of any further obligation whatsoever.

Approved June 8, 1955.