NON-BANK THRIFT INSTITUTIONS
Non-bank thrift institutions - form a small segment in the country’s financial system and are not so well known as the others. Organized as non-bank entities, they do not perform any banking or quasi-banking functions. Two kinds:
1. Savings and loan association
2. Mutual building and loan association
Savings and loan association
Republic Act No. 3779 – was approved on June 22, 1963, provided for the establishment and operation of savings and loan association in this country.
Central Bank Circular No. 157 – was promulgated for the effective implementation of the enabling Act by the Monetary Board laying down rules and regulations governing the establishment and operations of savings and loan associations.
Presidential Decrees Nos. 113 and 450 - With the dawn of the New Society and feeling the inadequacy of certain provisions of the said Act, the president issued these as amendment thereto.
Declaration of Policy
The state declares that it is its policy:
a. To regulate and supervise the activities of savings and loan associations in order to place their operations on a sound, stable and efficient basis to the end that they may be able to better provide for the establishment of additional credit and savings facilities in a fair manner to the consuming public and industry, commerce, and agriculture and to curtail or prevent acts or practices of these savings and loan associations which are prejudicial to the public interest. b. To lay down the minimum requirements and the standards under which savings and loan associations may be established and do business c. To maximize the protection of the public, and of the members and stockholders of savings and loan associations against misfeasance of the directors and officers thereof d. To encourage industry, frugality and the accumulation of savings among the public, and the members and stockholders of savings and loan associations.
Savings and loan association, defined.
The term savings and loan association includes any corporation engaged in the business of accumulating the savings of its members or stockholders, and using such accumulations, together with its capital in the case of a stock corporation, for loans or investment in the securities of productive enterprises or in securities of the Government, or any of its political subdivisions, instrumentalities or corporations.
Form of organization
A savings and loan association shall be organized either as a. a stock or
b. Non-stock Corporation.
* The monetary board shall fix the minimum paid-up capital of a savings and loan association organized as a stock corporation in such amount as the said board may consider necessary for the safe and sound operation of such association. Non-stock Corporation
* A savings and loan association organized as a non-stock shall confine its membership to a well-defined group of persons and shall not transact business with the general public. * It shall accept deposits from, and grant loans to, only to its member-depositors and no entrance fee of any kind may be charged by any association without first securing the approval of the Monetary Board.
The articles of incorporation of a proposed association shall be submitted to the Monetary Board together with a copy of the proposed by-laws and an application signed by a majority and verified by one of the directors, requesting approval. The application shall set forth: a. The names and address of the incorporators, directors, and officers, with a statement of their character, experience, and general fitness to engage in the savings and loan business. b. An itemized statement of the estimated receipts and expenditures of the proposed association for the first year c. A statement showing that the public convenience and advantage will be promoted by the formation of the proposed association d. Any...
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