time to time in effect." Notwithstanding any other provisions of this subchapter, including without limitation §§ 543.11, 544.1, and 544.3, the provision aforesaid may in the discretion of the Board be included in any Charter N or Charter K (rev.) as hereafter issued.

(b) Approval by Board. The provisions of this paragraph (b) shall constitute the approval by the Board of the proposal by the board of directors of any Federal association that has Charter N or Charter K (rev.) of the following amendment to such association's charter: Provided, That such association follows the requirements of section 11 of its charter in adopting such amendment: Amendment of section 3 by adding at the end thereof a provision in the form of the charter provision set forth in paragraph (a) of this section.

[34 F.R. 548, Jan. 15, 1969]

§ 545.1-4 Other savings deposits.

(a) General. In addition to the savings deposits authorized by § 545.1-2, any Federal association which has a charter in the form of Charter N or Charter K (rev.) and which has adopted the charter provision set forth in § 545.1-3 may, subject to the provisions of this section, accept savings deposits for fixed periods of time and bearing fixed rates of interest, which savings deposits shall have the same status and priority as is provided under subparagraph (3) of paragraph (b) of § 545.1-2 for savings deposits authorized by that section. Holders of savings deposits authorized by this section shall, to the same extent as is provided in subparagraph (2) of paragraph (b) of § 545.1-2 for holders of savings deposits authorized by that section, be members of the association and have voting rights.

(b) Payment of interest. Interest on savings deposits authorized by this section shall be paid at the rate fixed, or negotiated on an individual basis, by the association prior to the acceptance of the deposit; but such rate shall not exceed the applicable maximum rate prescribed in Part 526 of this chapter. The board of directors of the association shall provide that interest on such savings deposits, or designated classes thereof, shall be paid either quarterly, semiannually, annually, at the conclusion of the fixed term, or on any dates on which interest may be paid on savings deposits authorized by $545.1-2. The board of directors of the association may provide for the

payment of interest on savings deposits authorized by this section on the same basis, terms, and conditions as is provided for the distribution of earnings on savings accounts by § 545.1-1.

(c) Limitations. In accepting savings deposits under the authority contained in paragraph (a) of this section, no Federal association shall:

(1) Provide for any forfeiture for breach of condition on the part of any depositor, other than loss of interest, or partial loss thereof, for the term of the savings deposit or other specified time period;

(2) Issue any negotiable form of certificate evidencing a savings deposit;

(3) (1) Accept any fixed-term savings deposit of less than $100.000 ($50,000, if the association's home office is located in Puerto Rico) for a term of less than 90 days (30 days for a public unit account) or more than 10 years; or (ii) Accept any fixed-term savings deposit of $100,000 ($50,000, if the association's home office is located in Puerto Rico) or more for a term of less than 30 days or more than 10 years. (iii) Any savings deposit issued pursuant to this section may provide for renewal, at the option of the association, for successive periods not exceeding 10 years for each renewal.

(4) Issue any fixed-term savings deposit which is subject to redemption;

(5) Provide for withdrawal from any fixed-term savings deposit prior to the expiration of that term, except as provided in paragraph (f) of this section; or

(6) Issue any form of certificate evidencing a savings deposit under this section unless the association has first (i) obtained a written opinion by its legal counsel that such form of certificate complies with the requirements of applicable law and regulations and the association's charter, which opinion shall be retained by the association so long as it continues to issue certificates in such form, and (ii) submitted a copy of such form of certificate, together with a copy of such legal opinion, to the Federal Savings and Loan Insurance Corporation: Provided, That such legal opinion need not be obtained if the association uses a form of certificate which has already been approved by the Corporation for use by Federal associations.

(d) Form of certificate. Certificates evidencing savings deposits accepted pursuant to the authority contained in this section shall, subject to the limitations contained in paragraph (c) of this

section and the disclosure requirements contained in paragraph (e) of this section, be in such form as the board of directors of the association may determine. Such certificates may be incorporated in passbooks or issued as separate certificates.

(e) Disclosure. Each certificate evidencing a savings deposit accepted pursuant to the authority contained in this section shall include in its provisions and display in easily read type:

(1) The rate of interest to be paid and the dates or frequency at which interest is payable;

(2) The amount of the deposit and the date on which it is made;

(3) The term of the deposit;

(4) The penalty or penalties imposed for withdrawal prior to completion of the fixed term or renewal and any restrictions on such withdrawal;

(5) The minimum balance requirement applicable to the deposit;

(6) Any provisions relating to renewal at the conclusion of the fixed term;

(7) Any provisions relating to the interest to be paid after the conclusion of a fixed term or renewal; and

(8) A provision converting the deposit at the conclusion of a fixed term or renewal, or at any time that the applicable minimum balance requirement ceases to be met, to the status of a savings deposit accepted for an indefinite period of time.

(f) Withdrawal prior to expiration of term. (1) In the event of withdrawal of all or any portion of a fixed-term savings deposit prior to the expiration of its term

(i) The depositor shall receive interest from the beginning of the term of such savings deposit on the amount withdrawn at a rate not in excess of the rate then being paid on savings deposits accepted for an indefinite period of time.

(ii) The depositor shall also pay a penalty in an amount not less than the lesser of (a) the interest at such rate for 90 days (3 months) on the amount withdrawn or (b) all interest at such rate (since issuance or renewal of the deposit) on the amount withdrawn.

(iii) If any interest has been paid to the depositor prior to such withdrawal, a deduction shall be made from the amount withdrawn to adjust for the penalty applicable to such interest.

(2) In the case of early withdrawal of only a portion of such deposit, the certificate evidencing such deposit shall be

canceled if the applicable minimum balance requirement ceases to be met. If such requirement continues to be met, (i) appropriate notation may be made on the certificate indicating the amount and date of such withdrawal and the remaining deposit balance, or (ii) the certificate may be canceled and a new certificate issued for the remaining portion of the deposit with the same term, rate, and dates as in the canceled certificate.

(3) A Federal association may provide that a depositor cannot withdraw any portion of a fixed-term savings deposit prior to the expiration of its term except under such emergency circumstances as it may set forth in the certificate evidencing such deposit.

[35 F.R. 3024, Feb. 14, 1970, as amended at 36 FR 6739, Apr. 8, 1971; 38 FR 18460, July 11, 1973; 39 FR 44659, Dec. 26, 1974] § 545.1-5

posit.

Marketable certificates of de

(a) General. A Federal association which is a deposit association within the meaning of that term as used in § 545.1-2 may, notwithstanding and without regard to any provision of this part other than this section, accept savings deposits for fixed terms and bearing fixed returns which are evidenced by certificates of deposit in conformity with this section. A Federal association may make provision for issuance of duplicate certificates for such savings deposits and for bond, security, and/or other protection in connection with such issuance. Savings deposits authorized by this section shall be deemed to be included in the term "such savings deposits" wherever used in the first sentence of paragraph (b) (3) of § 545.1-2. Provisions of the association's charter other than the provision set forth in paragraph (a) of § 545.1-3 shall not be applicable to or with respect to such savings deposits or such certificates.

(b) Return. The return shall be fixed at the time of the issuance of the certificate and shall be in the form of interest or discount or both. Such return shall not be in excess of any applicable maximum limitation in Part 526 of this chapter.

(c) Terms. (1) A certificate authorized by this section shall have a single fixed maturity, with a fixed term which shall be not less than 30 days and not more than 10 years. In the calculation of such minimum or maximum term, such term shall be deemed to begin with the date on

which the certificate is actually issued, which date shall be excluded, and to expire on the date on which the certificate becomes payable, which date shall be included. No savings deposit shall be accepted pursuant to this section and no certificate shall be issued pursuant to this section if such acceptance or such issuance is accompanied by any contract or agreement for extension or renewal of such deposit or such certificate. Wherever used in this section, except in the second sentence of this paragraph, the term "issue" and variations thereof shall be deemed to include reissue unless the context otherwise requires.

(2) Certificates may be, but need not be, in one or more series. Interest may be, but need not be, evidenced in whole or in part by coupons.

(d) Limitations. In exercising authority under this section, a Federal association shall not issue any certificate:

(1) With a face amount (inclusive of discount, whether or not arrived at in whole or part by add-on calculation) of less than $100,000, except that such dollar amount is $50,000 as to a certificate issued by a Federal association whose home office is located in Puerto Rico;

(2) Which by its terms or otherwise is subject to redemption, repurchase, or acceleration by the association;

(3) As to which there is, by its terms or otherwise, any right or privilege to increase its amount by payment on or transfer to such certificate, or a savings deposit evidenced thereby, prior to the expiration of the fixed term, or which by its terms or otherwise is subject to withdrawal or transfer of principal of or from such certificate, or a savings deposit evidenced thereby, prior to such expiration, but nothing in this paragraph shall be deemed to be violated by compounding of interest or other return or the allowance of interest or other return upon interest or other return on such certificate;

(4) Which by its terms or otherwise permits any extension or renewal of the term of such certificate or of a deposit evidenced by such certificate, but a certificate which is silent as to such extension and as to such renewal shall not be deemed to be in noncompliance with this paragraph.

(e) Required provisions. Each certificate under this section shall include in its provisions the following:

(1) The face amount of the certificate and the date borne by the certificate;

(2) The date on which the certificate is payable, which may be expressed as a date or by a provision that the certificate is payable a specified period after a named or specified fixed date;

(3) To the extent that interest is not represented by discount or evidenced by a coupon or coupons, the rate of interest and the date or dates, or the frequency, of payment of interest;

(4) A statement that no interest shall accrue on or be credited to the certificate or any savings account evidenced by the certificate for any time after the expiration of the fixed term of the certificate; and

(5) If the holder of the certificate has membership and voting rights, a statement in accordance with paragraph (h) (2) of this section.

(f) Form. (1) A certificate under this section shall be a writing in (i) a form that would be a negotiable instrument (other than a draft or check) within the terms of Article 3 of the 1972 Official Text of the Uniform Commercial Code (which text is hereinafter in this section referred to as the Uniform Commercial Code) or (ii) a form that would be so except that such writing is not payable to order or to bearer within the meaning of the term "payable to order or to bearer" as used in section 3-104 of said Article 3 but is issued in registered form within the meaning of the term "registered form" as used in section 8-102 of the Uniform Commercial Code or in a form that would be such a registered form except that as to interest thereon or part of such interest it is not in such registered form. Certificates under this section shall not be incorporated in passbooks. If a certificate under this section is offered or described as a negotiable instrument it must be an instrument which, under the law of the State or other jurisdiction in which the home office of the Federal association is located, is a negotiable instrument.

(2) A certificate shall not be deemed to be in noncompliance with paragraph (f) (1) of this section or any other provision of this section because it is, by its terms or otherwise, interchangeable as between denominations and/or between some or all of the order, bearer, registered, or partly registered forms permitted by said paragraph (f) (1) of this section or refers to any such interchangeability, or because of the inclusion in the certificate of anything which, by this part, is expressly permitted to be included therein

or which, by this part or other applicable regulation or by applicable statute, is required to be included therein.

(3) Subject to the provisions of this section, a certificate under this section shall be in such form as is determined by the board of directors of the association.

(g) Transfer or withdrawal. A savings deposit evidenced by a certificate as set forth in this section shall not be subject to check or to withdrawal or transfer on negotiable or transferable order or authorization to the association, but indorsement of such certificate which is physically on such certificate (including an allonge), whether such indorsement is to order or to bearer or otherwise, shall not, so far as such indorsement relates to such certificate or part thereof or to not more of such savings deposit than is evidenced by such certificate, be deemed to be such a check or negotiable or transferable order or authorization, and such indorsement is hereby permitted.

(h) Voting and membership. (1) Except as provided in paragraph (h) (2) of this section, holders of such savings deposits or of such certificates shall not, by reason of being such holders, be members of the association or have voting rights. (2) If such certificate (i) is originally issued in registered form and is not by its terms or otherwise exchangeable immediately or otherwise into a form in which it would not be in registered form and (ii) contains a statement that the provisions of the association's charter with respect to membership and voting are applicable to such certificate, the provisions of paragraph numbered 4 of the association's charter with respect to membership and voting shall as to such certificate be applicable in the same manner and to the same extent as if such certificate were included in the term "savings accounts" as used in said paragraph numbered 4. For purposes of this paragraph (h), a certificate shall be deemed to be in registered form if it is in a form which is a registered form within the meaning of the term "registered form" as used in section 8-102 of the Uniform Commercial Code or in a form that would be such a registered form except that as to interest or part of interest it is not such a registered form.

(1) Ancillary provisions. (1) The term "savings accounts representing share interest in the association" in § 545.24 shall with respect to savings deposits authorized by this section or by § 545.1-4

39-057-75-21

be applicable in the same manner and to the same extent that it would be applicable if such savings deposits were such savings accounts.

(2) Nothing in this section shall prevent holders referred to in paragraph (h) (1) of this section from being insured members within the meaning of title IV of the National Housing Act or regulations relating to insurance under said title.

(1) Filing. Prior to issuing a certificate under this section, an association shall file with the Federal Savings and Loan Insurance Corporation a copy of the form of certificate which it proposes to issue, together with an opinion of its legal counsel that the form of the certificate complies with the requirements of applicable law and regulations and the association's charter. Such filing shall be made by delivering a copy of such form and opinion to a Supervisory Agent (the President or any other officer or employee of the Federal Home Loan Bank of the district in which the home office of the association is located who is designated as an agent of the Federal Savings and Loan Insurance Corporation by or under § 501.10 or § 501.11 of this chapter) and an additional copy to the Director, Office of Industry Development, 320 First Street, N.W., Washington, D.C. 20552. The association shall refrain from issuing such certificate for the shorter period of 30 days from the date such form was filed with the Federal Savings and Loan Insurance Corporation in accordance with the provisions of this paragraph (j) or the date such association receives appropriate written advice that such Corporation has no objection to the use of such form by such association. The association shall not issue, or continue to issue, under this section, any form of certificate as to which form such Corporation has advised such institution in writing that such Corporation objects to the use of such form of certificate.

(k) Relationship to other provisions. (1) The provisions of § 545.2, § 545.4, § 545.4-1, and § 545.4-2 shall not be applicable to or with respect to a savings deposit which is in conformity with this section.

(2) Paragraph (d) of § 545.1 shall be applicable to a savings deposit which is in conformity with this section, except that the period referred to in paragraph (d) (2) shall be deemed to commence on the date of the expiration of the fixed term of such deposit.

(3) The provisions of § 545.7 shall be applicable with respect to a savings deposit which is in conformity with the provisions of this section, and for purposes of this paragraph the term "withdrawal amount" as used in said § 545.7 shall include so much of any discount on such savings deposit as would be shown by a straight-line calculation to have accumulated thereon plus any accrued or accumulated interest on such savings deposit which is unpaid. The term "redemption, repurchase, or acceleration by the association" as used in paragraph (d) (2) of this section shall not include setoff, counterclaim, or recoupment, or realization by foreclosure or otherwise upon a lien or pledge held by the association or payment by the association of surplus remaining upon such realization.

(4) Acceptance of savings deposits under any one of § 545.1-2, § 545.1-4, and § 545.1-5 shall not debar a Federal association from concurrently accepting savings deposits under the authority of either or both of the other two of said sections.

(5) The payment of a savings deposit which is in conformity with the provisions of this section shall not be subject to any right of the association to require advance notice.

[39 FR 22135, June 20, 1974, as amended at 39 FR 29340, Aug. 15, 1974; 39 FR 41516, Nov. 29, 1974]

§ 545.2 Evidence of ownership.

(a) Signature card. In connection with the issuance of a savings account a Federal association shall obtain a card containing the signature of the owner of such account or his duly authorized representative and shall preserve such signature card in the records of the association.

(b) Account books and certificates. A Federal association that has Charter N or Charter K (rev.) shall issue to each holder of its savings accounts an account book, or a separate certificate, evidencing the ownership of the account and the interest of the holder thereof in the capital of such Federal association; except as hereinafter provided, each such certificate shall be in form prescribed by the Board. (The Board has prescribed for use by all Federal associations that have Charter K, forms of certificates evidencing the ownership of savings share accounts, short-term savings share accounts, and investment share

accounts; and has prescribed for use by all Federal associations that have Charter N or Charter K (rev.) forms of certificates evidencing owership of savings accounts. Illustrative copies of these forms may be obtained from the Federal Home Loan Bank Board, Washington, D.C., or from any Federal home loan bank.) Any Federal association that has a Charter E may, until otherwise provided by the Board, continue to use the forms of share certificates being issued by such association as of the effective date hereof: Provided, That no such form is in conflict with any express provision of such association's charter or bylaws.

(c) Ownership of record. A Federal association may treat the holder of record of a savings account as the owner for all purposes without being affected by any notice to the contrary unless such Federal association has acknowledged in writing notice of a pledge of such savings account. The receipt or acquittance of any member, including a minor person or a married woman, who holds a savings account shall be a valid and sufficient release and discharge of the association for any payment to such person on any savings account. Savings accounts of a Federal association shall be transferable only upon the books of the association and upon proper application by the transferee and the acceptance of the transferee as a member upon terms approved by the board of directors.

(d) Duplicate account books and certificates. Upon filing with a Federal association by the holder of record as shown by the books of the association, or by his legal representative, of an affidavit to the effect that the certificate or account book evidencing his savings account with the association has been lost or destroyed, and that such certificate or account book has not been pledged or assigned in whole or in part, such Federal association shall issue a new certificate or account book evidencing such savings account in the name of the holder of record: Provided, That the board of directors shall, if in its judgment it is necessary, require a bond in an amount sufficient to indemnify the association against any loss which might result from the issuance of such new certificate or account book.

[23 F.R. 9898, Dec. 23, 1958, as amended at 28 F.R. 4176, Apr. 27, 1963]