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each share or fractional part thereof borrowed upon, shall in addition to the dues on his shares pay interest and premium, if any, on his loan at such times as the by-laws shall prescribe, until the shares borrowed upon shall reach their matured value or the loan is repaid; and when such matured value is reached the shares shall cancel the loan upon them and the proper surrender and acquittance be made. 4. The "limited payment plan," that is, a plan whereby associations incorporated hereunder, or under chapter one hundred and twenty-two of the laws of eighteen hundred and fifty-one, chapter five hundred and fifty-six of the laws of eighteen hundred and eightyseven, chapter six hundred and eighty-nine of the laws of eighteen hundred and ninety-two, and acts amendatory thereof, may issue and sell instalment shares as a basis for making loans or advances, on which the maximum number of payments may be definitely fixed. The premium shall be bid in the form of the rate of interest the successful bidder will pay upon his loan during the continuance thereof; the association shall determine the minimum rate of such premium-interest at which such bidding shall begin, but such minimum rate shall not exceed six per centum per annum. On such stock a definite or fixed rate per centum of dividend per annum shall be credited from the profits of the association, if its earnings are sufficient for that purpose, but such rate shall in no case exceed the rate of premium-interest bid upon the loan for which such stock is the basis, and in no case shall such rate exceed six per centum per annum. There shall be paid on such stock such sum or sums in equal periodical instalments, exclusive of any expense fund or other de ductions which are authorized by the articles of association or the by-laws, as will, when taken together with the dividend hereinbefore mentioned, equal the matured value thereof at the end of the maximum period during which payment upon such stock may be required. In consideration of such fixed rate of dividend as above provided, the borrowing member shall waive his right to full participation in the profits of such association. Out of the profits, if any, which remain after paying the expenses of said association and apportioning to the borrowing member the fixed rate agreed upon in the contract with him, there shall be apportioned to the instalment stock such rate of dividends as may be determined by the board of directors, and if such rate so determined and apportioned shall exceed the rate ap

portioned to the stock of the borrowing members, there shall also then be apportioned to the stock of said borrowing members an additional profit, which shall amount to one-half of the difference between the rate first apportioned to such borrowing members' stock and the rate apportioned to the instalment stock, and the other half of said difference shall be credited to and shall constitute a permanent contingent fund for the payment of losses lawfully chargeable to the profit and loss account of such association, and for no other purpose; and in consideration of such contribution to the contingent fund, such stock shall, as between the members of the association issuing it, be exempt from any further charges or assessments for losses sustained, incurred or paid by such association. When the borrowing member shall have made all the payments required under his contract with the corporation and its articles of association or by-laws, the association shall, unless the shares of stock held by him shall have sooner matured, in consideration of the amount standing to the credit of such stock upon its books, and his agreement to contribute to the contingent fund of the corporation, a portion of the profits to which he otherwise might have been entitled, as hereinbefore provided, accept the amount standing to his credit upon the books of the association, and the sums so contributed, in full satisfaction of the loan or advance made to him; and the shares so issued shall be canceled and proper surrenders and acquittances be made. (Former section 178; L. 1894, ch. 705, § 1; L. 1899, ch. 704, § 1.)

§ 219. Security for loans. For every loan made, except as hereinafter provided in this section, a bond secured by a first mortgage on real estate shall be given, accompanied by a transfer and pledge to the association of the shares borrowed upon and all accumulations that have or shall accrue thereon, as collateral security for the repayment of the loan; or, in lieu of the mortgage, the borrower or another may transfer and pledge to the association for the payment of the loan, free shares, the withdrawal value of which under the by-laws at the time of such borrowing shall exceed the amount borrowed and interest thereon for six months, and all fines that could accrue in case the borrower should default in the payment of the dues upon the shares borrowed upon, but an association may provide by its by-laws that it will not make stock loans. If the borrower neglects to offer

security satisfactory to the board of directors, within the time provided by the by-laws, his right to the loan shall be forfeited and he shall be charged with interest and premium, if any, for one month, and all necessary expenses incurred, if any, under the by-laws in reference to the proposed loan. All bonds and mortgages given to the association shall be deemed conditioned upon the performance of the provisions of this article relating to the payment of loans, premiums, interest and fines thereon, and the by-laws of the association, although the same may not be fully expressed therein. A borrower may repay a loan, and all arrears of interest, premium, if any, and fines thereon, or one or more shares thereof, at any stated meeting or at any time, but the by-laws may otherwise provide; when not made at a stated meeting, he shall pay interest up to the first stated meeting after such payment, or he may, by a proper notice, and directions as to the application, have the withdrawal or holding value of the shares borrowed upon, applied in payment or part payment, as the by-laws shall determine. Should there at any time be money in the treasury not called for by the borrowing or withdrawing members, the board of directors may make temporary loans to members out of the same, at such rate of interest not exceeding six per centum, and under such provisions and restrictions as the by-laws may prescribe. Such temporary loans shall not run more than ninety days and shall be secured by the personal note of the borrower, and also by a pledge of shares to the association, the withdrawal value of which shares shall be at least ten per centum more than the amount of the loan and the interest thereon to its maturity. If at any time there is money in the treasury as above in excess of the amount needed to meet the demand for such temporary loans, it may be invested in the same kind of securities and under the same restrictions as allowed to savings banks by section one hundred and forty-six of this chapter. No corporation incorporated under the provisions of this article or under the provisions of the repealed acts hereafter enumerated in section two hundred and thirty-two of this chapter which upon the first day of March, nineteen hundred and one, was not engaged in the business of loaning its funds upon second mortgages upon real estate, shall hereafter loan any portion of its funds upon the security of real estate upon which there is a prior lien or incumbrance, or accept from a borrower a mortgage upon real estate which is not a

first mortgage, or purchase real estate securities, or invest any portion of its funds in real estate securities which are not first liens upon the property described in them, unless every prior mortgage, lien or incumbrance is owned by it, and no prior mortgage, lien or incumbrance shall be sold, assigned or transferred by any such corporation until all subsequent mortgages, liens or incumbrances owned by it shall have been fully paid and satisfied.

A corporation incorporated under the provisions of this article, or under the provisions of either of said repealed acts hereinafter enumerated, which was, on the first day of March, nineteen hundred and one, engaged in the business of loaning its funds, or any portion thereof, upon second or divided mortgages or upon subsequent or secondary liens upon real estate, whether the prior mortgages or liens are given to or held by such corporation or not, and which shall hereafter continue to make loans upon such second mortgages or liens, shall not advance in any such loans a sum which taken together with the amount of all prior liens or incumbrances, exceeds seventyfive per centum of the appraised value of the real estate upon which such loans are made. Nor shall the total amount so loaned by any such corporation exceed at any time an amount equal to thirty-three and one-third per centum of the net amount paid in on its capital stock in good standing. Provided further that such corporation shall invest not less than fifteen per centum the first year, twenty per centum the second year, and thereafter twenty-five per centum of its receipts applicable for loaning purposes in the same securities in which savings banks are by section one hundred and forty-six of this chapter, authorized to invest their deposits and the income derived therefrom, until the funds so invested shall amount to at least twentyfive per centum, and to be at all times so maintained, of all mortgages and liens underlying the mortgages or liens held by it (except that after said fund shall amount to fifteen per centum of all underlying mortgages and liens held by such corporations, the remainder, or any portion of the remainder thereof, may be used in cases of emergency in the payment of withdrawals). Provided, however, such investment in such securities need not exceed five hundred thousand dollars in any case. No such corporation engaged on the first day of March, nineteen hundred and one, in the business of loaning its funds or any portion thereof upon second or divided mortgages, or

subsequent or secondary liens, shall after the eleventh day of April, nineteen hundred and one, make any such loans upon the security of vacant or unimproved real estate.

(Former section 179; L. 1894, ch. 705, § 1; L. 1896, ch. 452, § 4; L. 1901, ch. 328, § 2; L. 1905, ch. 491, § 1.)

§ 220. Arrearages; forfeitures; withdrawal values. Whenever any member shall be six months in arrears in the payment of his dues upon free shares, the secretary shall give him notice thereof in writing, and a statement of his arrearages, by mailing the same to him at the last post-office address given by him to the association, and if he shall not pay the same within two months thereafter, the board of directors may, at their option, declare his shares forfeited; and at the time of such forfeiture the withdrawal value thereof shall be determined and stated, and the defaulting member shall be entitled to withdraw the same without interest within one year upon such notice as shall be required of a withdrawing shareholder, and upon failure to so withdraw the same, then, and in that case, it may revert to the association.

(Former section 180; L. 1894, ch. 705, § 1.)

Whenever a bor

§ 221. Loans due when members in arrears. rowing shareholder shall be in arrears in the payment of his dues, interest or premium two months, the whole loan shall become due at the option of the board of directors, and they may proceed to enforce collection upon the securities held by the association. The withdrawal value at the time of the commencement of the action of all shares pledged as collateral security for the loan, shall be applied upon the loan and arrearages of interest, premium and fines thereon, and the shares deemed surrendered to the asscciation.

(Former section 181; L. 1894, ch. 705, § 1.)

222. May purchase at foreclosure sale. Any corporation incorporated under the provisions of this article or under the provisions of either of the repealed acts hereafter enumerated in section two hundred and thirty-two of this chapter may purchase at any sale, public or private, any real estate upon which it may have a mortgage, judgment lien or other incumbrance, taken or obtained in good faith in the regular transaction of the business of the association, and may sell, exchange, convey, lease or mortgage the same or any real estate