17:12B-130. Dividend participation; exceptions

(a) At least annually and after determination of the net income for the accounting period and the establishment of reserves required or permitted by this act, the board of each State association shall determine by resolution, the rate or rates of dividend, if any, which shall be declared for each class of account. Such dividends shall be taken only from the net income or from the undivided profits account. Dividends shall be apportioned to members' accounts upon a compound interest plan. Dividends shall be made available to members by adding the same to their accounts, except where otherwise provided by this act, but in no event shall dividends be made available to the members earlier than the eighth calendar day prior to the closing of the period for which said dividends are paid.

Notwithstanding any other provision of this act, the board of any State association, may by resolution, authorize the payment of dividends on amounts withdrawn from savings accounts between the dates as of which such association regularly distributes earnings on savings accounts provided that dividends paid on any amount so withdrawn, shall not be paid for any greater portion of the dividend period than that during which such amount remains in such association, nor at a rate in excess of the rate at which earnings, exclusive of any reward profit, are distributed on savings accounts for the dividend period in which such amount is so withdrawn.

(b) State associations issuing installment share accounts may declare dividends to accounts of other classes at a rate less than, but no more than, the rate declared to installment share accounts for the same period, unless the board has adopted a reward profit plan in which event all dividends, except those provided for under the reward profit plan, shall be declared at the same rate. Notwithstanding any other provisions of this act, a State association may apportion dividends to installment share accounts at other than a regular dividend period for the purpose of maturing such accounts; provided, however, that the amount of dividends so apportioned shall be no greater than the pro rata share of income for the current period applicable for dividend purposes to such accounts.

(c) Notwithstanding any other provisions of this act, a State association may, if its by-laws so provide, exclude from dividends, either or both of the following classes of accounts:

(1) Those having a participation value of less than $50.00. Such accounts may be placed in, or transferred to, an account designated as a "nondividend account;" provided, however, that the State association shall maintain a list of the names of the savings members and the amounts credited to such savings members in such "nondividend account."

(2) Those which are issued under a plan whereby they will be withdrawn within 24 months from the date upon which they are issued, or it may credit dividends to such accounts according to a schedule which it may establish, provided that such schedule shall not result in the crediting of dividends to any of such accounts at a rate greater than that applicable to any class of accounts, other than those described in subsection (c) of this section.

L.1963, c. 144, s. 130. Amended by L.1966, c. 276, s. 1; L.1969, c. 28, s. 2, eff. May 2, 1969.