QuestionsQuestions (Republic Act No. 8367)
The short title is the “Revised Non-Stock Savings and Loan Association Act of 1997.”
To encourage savings and judicious credit use; regulate/supervise associations for sound and efficient operations; lay minimum requirements and standards for organization and operation; and maximize protection of members against misfeasance and malfeasance.
It is a non-stock, non-profit corporation that accumulates members’ savings and uses them for loans to members, primarily providing long-term financing for home building/development and personal finance.
At least five (5) but not more than fifteen (15) members of a well-defined group may form an association.
It must (1) secure a license from the Monetary Board and (2) register with the Securities and Exchange Commission (SEC).
Proposed articles and bylaws with names/addresses of incorporators, trustees and officers and their qualifications; an itemized first-year receipts and expenditures estimate; a filing fee; and other information the Monetary Board may require.
It is defined by the Monetary Board but includes employees/officers/directors of one company (including member-retirees), government employees within the same department/branch/office (including member-retirees), and immediate family members up to the second degree of consanguinity or affinity of those persons.
An association must confine membership to a well-defined group and shall not transact business with the general public.
The total entrance fees shall not exceed 1% of the amount contributed/paid by the member; for new members, the fee is based on the amount of contribution computed in accordance with revaluation of the association’s assets.
Deposits are absolutely confidential and may not be examined/inquired into except with the depositor’s written permission, in impeachment, upon a competent court order in bribery/dereliction by public officials, or when the deposited/invested money is the subject of litigation.
Violation by an official or employee is punishable under Republic Act No. 1405, as amended.
Loans shall not exceed deposits and contributions plus either (i) 12 months of regular salary (if the association allows) or (ii) 70% of the fair market value of acceptable first-mortgage collateral. Loan maturity generally cannot exceed 5 years, except: home building/development with unencumbered real estate may have up to 25-year maturities; and agricultural projects have maturities subject to Monetary Board regulations.
The treasurer/cashier/paymaster of the member’s employer must make deductions from salary/wage/income/retirement pension pursuant to loan terms and remit them to the association, and may collect a reasonable authorized fee for such services.
Borrowing/obligations may not exceed 20% of total assets; in meritorious cases, the Monetary Board may raise the ceiling up to 30% of total assets.
An association cannot directly/indirectly grant loans to any trustee/officer (including via agency/partnership) except with written approval of a majority of trustees excluding the concerned trustee, and total loans to trustees/officers at any one time cannot exceed 20% of the association’s total capital contributions; approved transactions must be recorded and a copy transmitted to the Bangko Sentral. Terms must not be more favorable than those given to other members.
At any one time: (1) bonds/securities total cannot exceed 10% of total assets without Monetary Board prior written approval; (2) real property cannot exceed 5% of total assets; and (3) office furniture/fixtures/equipment and leasehold improvements cannot exceed 10% of total capital contribution.
It may not distribute any portion of net income if the withdrawable share reserve is below the minimum requirement, or if the distribution will reduce the reserve below the minimum.