Constitution and by-laws.

Association" shall form part of the corporate name every such corporation.

of

SEC. 3. Every such association hereafter formed shall adopt a constitution which shall substantially give effect to the provisions of this act, and shall also adopt such by-laws for the government and management of its business as it shall deem proper.

Provided, The same shall not be inconsistent with this act, and shall not contravene the laws or constitution of this state, or the United States, and may alter and amend the same from time to time in such manner as may be provided by its articles of incorporation.

Withdrawal of Such constitution shall contain equitable provi

shareholder,

sions, permitting any shareholder wishing to do so to withdraw from the association in manner as follows: After three months from date of issue of the certificate of shares, a shareholder, or the legal representative of a deceased shareholder, wishing to withdraw from the said corporation shall have the power to do so by giving thirty days' notice of such intention to withdraw, such notice being given in writing at the regular meeting of the board of directors. At the first regular meeting after the expiration of the thirty days' notice, or at any time thereafter, the member so withdrawing, or, if deceased, his legal representative, shall be entitled to receive, on demand, the amount paid in by him or her, less the admission fee and expense charges, and such rate of interest as the by-laws may determine, less all fines and other charges. Should there have been, however, a net loss instead of a net gain, then such withdrawing shareholder shall

receive the actual amount paid in, less his proportion of such net loss. At no time, however, shall more than one-half of the unloaned funds in the treasury of the corporation be applicable to the demands of the withdrawing shareholders without the consent of the board of directors. No shareholder shall be entitled to withdraw whose stock is pledged as security for a loan either from the association or from any other party.

loans before

It shall contain equitable provisions permitting Payment of the payment of loans before maturity, and for maturity. crediting borrowing members who have paid premiums in advance, and who repay their loans before maturity, with an equitable share of the premiums paid by them.

shares.

Such constitution shall also provide that if any Cancellation of member has become delinquent in his payments on any shares to an amount equal to the payments due thereon for any period named therein (not however less than three nor more more than twelve months), such shares shall be canceled, and he shall, as to such shares, cease to be a member and shall become a debtor or creditor of such association, as the case may be, and it shall make equitable provisions for crediting such member with the same amount as if he had voluntarily withdrawn from the association, and if any sum be due him after deducting fines and losses, if any, to date of cancellation, it shall, if he be a borrower, be credited on his loan, and if he be not a borrower, it shall be held subject to his order. Such constitution may, within the limits aforesaid, fix different periods for the cancellation of shares of borrowers and non-borrowers, and may also, within said limits, leave the

Articles of incorporation, constitution

proved.

period for cancellation wholly or in part to the discretion of the board of directors.

SEC. 4. A copy of the articles of incorporation, and by-laws to constitution, and by-laws of every such association be filed and ap shall be filed in the office of the auditor of public accounts, who shall, with the state treasurer and attorney general, examine the same carefully, and if they or any two of them shall find that they conform with the requirements of this act and contain a just and equitable plan for the management of the association's business, they or any two of them shall issue to such association a certificate of their approval of such constitution and by-laws; but if they or any two of them find their provisions to be unjust or inequitable or oppressive to any class of shareholders, they shall withhold their approval.

Loans and security therefor.

It shall not be lawful for any association hereafter organized within this state for the purposes set forth in section one of this act, to transact any business except the execution of its articles of incorporation, the adoption of a constitution and bylaws, and the election of directors and officers, until it shall have procured the certificate of approval above provided for, nor shall any amendment of the articles of incorporation, constitution, or bylaws of any such association become operative until a copy of the same shall have been filed and a certificate of approval obtained as above provided in regard to original articles of incorporation, constitution, and by-laws.

SEC. 5. No loan shall be made by such association except to its own members, nor shall any loan be made to any member for any sum in excess of the par value of his stock, and the association

shall have a lien on as many of the borrowers' shares as shall equal at their face value the nominal amount of the loan; good and ample real estate security unincumbered, except by prior liens held by such association, shall also be given by the borrower; Provided, however, That the stock of such association may be received as security for a loan. of the amount of the withdrawal value of such stock without other security.

No evidence of indebtedness taken by such association for the return of any such loan shall be negotiable in form, and whatever be its form, every such evidence of indebtedness shall be non-negotiable in law, and no such debt or evidence of debt shall be assignable or transferable in any manner so as to prevent the discharge thereof by payment made to the association.

Conveyance of real estate.

SEC. 6. Such associations may purchase, hold, Purchase and lease and convey real estate for the following purposes and no other:

1st. Such as it may need to occupy as a place of business.

2d. Such as shall in good faith be conveyed to it in satisfaction of debts previously contracted in the ordinary course of business.

3d. Such as it shall purchase at sales under judgments, decrees, or mortgages held by the association, or shall purchase in good faith to secure debts due to it.

But no such association shall hold the title and possession of any real estate longer than three years, except for the first purpose above named.

Nothing in this section shall be construed to forbid the mortgaging of real estate to such associa

Minor as sharcholder.

Trustee or guardian as

SEC. 7. Shares of stock in any such association may be subscribed for, held, transferred, surrendered, withdrawn, and forfeited, and payments thereon received and receipted for, by any minor over the age of fourteen years, in the same manner and with the same binding effect as though such person were of full age, except that the said minor, or his estate, shall not be bound on his subscription to stock except to the extent of payments actually made thereon.

A trustee or guardian may acquire, hold, transfer, Shareholder. and withdraw and receive all moneys due upon shares in such association for the use and account of any minor; but before he shall be permitted to withdraw, transfer, or receive payment upon any shares so held, such trustee or guardian shall file with the county judge of the county where such association is located a bond for twice the value of the shares withdrawn, transferred, or money received, which bond shall be approved by said judge and shall be conditioned, upon his faithfully accounting for the proceeds of the shares withdrawn, transferred, or money received and the use thereof, and paying the same to said minor at his or her majority.

Taxation of

shares, loans,

SEC. 8. Such associations shall not be subject to and real estate. taxation on their capital stock, nor on their loans, advances, or mortgages, but shares in such association shall, for the purpose of taxation, be considered and held as credits, and members and holders of such shares shall list the same for taxation, and the same shall be taxed in such manner and subject to such deductions as may be provided by law for the taxation of other credits.