Apportionment of earnings and payment of interest; determination of percentage rate of declaration; classes of savings accounts; notice of change in method of calculating interest.
1. The apportionment of earnings or payment of interest by declaration of the board of directors must be made semiannually on June 30 and December 31 of each year, or quarterly on those dates, and on March 31 and September 30 of each year.
2. The percentage rate of the declaration must be determined by the board of directors as it deems expedient for the safety and security of all savings depositors, but if the percentage rate is excessive, unjust or inequitable, it is subject to disapproval of, and reduction by the Commissioner. The association may appeal any disapproval or reduction by the Commissioner to the Director.
3. No association may be required to pay or credit interest on accounts of $10 or less which show no entries of debit or credit for a period of 2 years, except for accumulated interest credits.
4. Except as otherwise provided in this chapter, interest must be declared on the participation value of each account at the beginning of the interest period, plus payments on the account made during the interest period, less amounts withdrawn, which for interest purposes must be deducted from the latest previous payments on the account, computed at the rate for the time invested, determined as provided in this section.
5. The date of investment is the date of actual receipt by the association, except that the board of directors may fix a date, which may not be later than the 10th day of the month, for determining the date of investment on which interest is computed. A date later than the 10th may be set if it is permissible for federal associations. If permitted by federal regulations, as amended, the board of directors may permit investments to receive interest calculated from the date of actual receipt.
6. In addition to the classes of savings accounts provided for in this chapter, an association may, with the approval of its board of directors, authorize additional classes of savings accounts which will conform to those types or classes, which have been established by the Federal Home Loan Bank Board by regulation or which may be authorized by it.
7. Except when prescribed for all associations by federal regulation, any association which changes its method of calculating interest on its savings accounts so as to decrease the effective yield of that account shall notify each account holder affected by the change by mail within 15 days before the proposed effective date of the change.
Last modified: February 26, 2006