Chap. 448.—An ACT to amend and re-enact an act approved February twenty-
first, nineteen hundred and twenty, entitled an act to encourage thrift and
savings amongst industrial classes, similar to the encouragement afforded
by building and loan associations and to authorize the incorporation of in-
dustrial loan associations for the purpose of making small loans to industrial
classes on security and at a low rate of interest. [H B 224]

Approved March 26, 1928

Be it enacted by the general assembly of Virginia, That an act
approved February twenty-first, nineteen hundred and twenty, entitled
an act to encourage thrift and savings amongst industrial classes
similar to the encouragement afforded by building and loan associa-
tions and to authorize the incorporation of industrial loan associations
for the purpose of making small loans to industrial classes on security
and at a low rate of interest, be amended and re-enacted so as to read
as follows:

1. Corporations for the conduct of the industrial loan business may
be formed according to the provisions of chapter one hundred and
forty-seven of the Code of Virginia, nineteen hundred and nineteen,
entitled general provisions applicable to corporations, and shall be sub-
ject to all the restrictions and have all the general powers in said
chapter contained, except as herein otherwise provided.

2. No industrial loan association shall be incorporated with a
capital less than thirty thousand dollars, which shall be fully paid
in in cash before commencing business. Fverv association hereafter
incorporated, under this act shall have as a part of its title the words
“industrial loan,” which shall not be used disjunctively, but such as-
sociation need not have as a part of its name the word “corporation”
or “incorporated.” No industrial loan association of a mutual char-
acter shall be incorporated.

3. Before any industrial loan association shall begin business it shall
obtain a certificate of authority to do business from the State corpora-
tion commission, and prior to the issuance of such certificate the State
corporation commission shall ascertain that all provisions of law
have been complied with; that the required amount of capital stock
has been properly paid in in cash, and that the directors’ oaths have
been taken and subscribed.

4. Every such industrial loan association shall have at least five
directors, each of whom shall own in his own right and have in his per-
sonal possession or control shares of stock in the association of which
he 1s a director aggregating at least one hundred dollars in par value,
and which must be unpledged and unencumbered at the time of his
becoming a director and during the whole of his term as such. Fach
clirector shall take and subscribe an oath to that effect, and that he will
cliligently and honestly administer the affairs of such industrial loan
association as such director, which oath shall be transmitted within
sixty days from his election to the banking division of the State cor-
poration commission. Any director violating the provisions of this
section shall thereby vacate his office and the remaining directors shall
proceed forthwith to fill such vacancy. Such directors shall require
of all active officers of such industrial loan association bonds in such
sums as may be prescribed by the banking division of the State cor-
poration commission in some surety company authorized to do business.

5. In addition to the general powers conferred upon corporations
under the provisions of chapter one hundred and forty-seven of the
Code of Virginia, nineteen hundred and nineteen, every such assocta-
tion shall have the power to lend money to any person, firm or cor-
poration, to be repaid in periodical instalments, secured by the obliga-
tion of such person, firm or corporation, or by any other security, sub-
ject to the limitations and restrictions hereinafter set forth; provided,
however, that no loans shall be made for a longer period than ten
years, nor for a greater amount in the aggregate to any person, firm
or corporation than twenty per centum of the paid in capital stock and
surplus of such association.

6. Such associations may charge in advance the legal rate of interest
upon the entire amount of the loan, and such loans may be repaid in
weekly, monthly or other periodical instalments, with the privilege to
the association to declare the entire unpaid balance due and payable
in the event of default in the payment of any instalment for a period
of thirty days, and may also charge an investigation fee not exceeding
two per centum of the amount of the loan.

7. Every such association shall adopt by-laws for the government
and management of its business not inconsistent with this act, and
may fix by its by-laws, such fines as it will charge for the nonpayment
of any instalments of the loan. Such fines shall not be more than ten
per centum of the amount of the payment in which default is made,
and shall not be cumulative.

8. Any association incorporated under this act or any corporation
doing an industrial loan business may sell certificates of investment or
similar obligations upon either the fully paid or partial payment
system, and may pay thereon such rate of interest as may be prescribed
in its certificate of incorporation or by-laws.

9. Any corporation heretofore engaged in the conduct of the in-
dustrial loan business, although not incorporated as an industrial loan
association, and having a paid-in capital and surplus of at least twenty-
five thousand dollars, may avail itself of the benefits of this act by
notifying the chief bank examiner to that effect, but such corporation
shall thereby become subject to all the terms and provisions hereof.

10. The State corporation commission shall have supervision of all
industrial loan associations doing business in this State, whether in-
corporated under the laws of this State or not, and may require of
them statements of their financial condition at such times as to the
said commission may seem proper.

Each industrial loan association shall be examined at least once a
year, but the chief bank examiner may, in his discretion, order other
examinations; and the examiners shall be given free access to all
books, papers, securities and other sources of information in respect
to said association.

Every such industrial loan association shall pay for its examination
a fee equal to the fee now prescribed for the examination of banks,
and such fee shall be fixed, assessed and paid in the same manner as
now provided by law for the examination of banks.

In the event that the said industrial loan association shall fail or
refuse to make its reports to the State corporation commission or shall
fail to pay the charges for its examination, or shall violate any of the
provisions of this act, the State corporation commission may, upon
motion of the chief bank examiner, revoke or suspend the license of
said association: and may, in its discretion, close said association and
take possession of its property and business until such time as it mav
see fit to allow the association to resume business, or may proceed to
finally liquidate said business, as may seem proper.

11. Jt shall be the duty of each industrial loan association to make
the statements required by the preceding section to the State cor-
poration commission, upon request, general or special, and for a failure
so to do for a period of thirty days after such request, said association
shall be fined not less than one hundred dollars nor more than one
thousand dollars by the State corporation commission, unless in answer
to a rule for that purpose, good cause be shown against it.

12. All industrial loan associations incorporated under this act
shall be subject to the same taxation now or hereafter imposed upon
building and loan associations.