e term matured withdrawal claims, as used in this chapter, shall include each and all of the following, to wit, (1) the value of all shares or investment certificates or parts thereof, in respect of which valid notices of intention to withdraw shall be on file, matured and unpaid, including notices of intention to withdraw by defaulting shareholders pursuant to Section 116105 of this act, as well as notices of withdrawal generally pursuant to Section 124101 of this act; and (2) the value of all shares which shall have matured pursuant to Section 116103 of this act and which shall be unpaid.

Regardless of whether or not an association is on notice, its obligations to pay matured withdrawal claims and the right of shareholders and certificate holders to receive payment of matured withdrawal claims, shall be secondary and subsequent to the right of such association to pay, and to provide a reasonable fund for the payment of, the following: Taxes, assessments, insurance, repairs, alterations and other sums necessary to protect and preserve or to furnish or equip its properties and its interest in properties (including those on the security of which it holds loans); principal and interest on borrowing by such association; interest on investment certificate. and dividends on shares; rent, compensation of officers, agents, salesmen and other employees, and other usual and ordinary operating expenses of such association; and commitments on it incomplete loans or investments; provided, however, that an association on notice shall not pay any dividends on its stock or distribute any profits to its stockholders or make any loans or investments, except loans or investments pursuant to its obligations incurred before it became an association on notice and except loans expressly permitted by Section 130101 of this act; provided further, that an association on notice may with the prior consent of the commissioner, and an association not on notice may without the necessity of obtaining the consent of the commissioner, in lieu of paying matured withdrawal claims, make or purchase loans or investments not exceeding the principal amount of moneys borrowed by such association from a federal home loan bank, or other similar federal agency, and not theretofore repaid; and provided further, that an association which is on notice may

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with the prior consent of the commissioner, and an association which is not on notice may without the necessity of obtaining the consent of the commissioner, in lieu of paying matured withdrawal claims, invest in stock issued by any federal home loan bank or other similar federal agency of which such association may be eligible to be a member. Moreover, regardless of whether or not an association is on notice, its obligation to pay matured withdrawal claims, and the right of shareholders and certificate holders to receive payment of matured withdrawal claims, shall be limited to payments from its cash on hand or in bank, proceeds from sale of investments and loans and other cash receipts of such association; and shall be further limited to payment pursuant to the subsequent provisions of this section. The cash, proceeds and other receipts aforesaid which shall remain after deducting, therefrom all payments, reserves, loans and investments above mentioned in this paragraph, are hereafter in this Section 124102 called the available funds.
The term unrestricted funds, as hereafter used in this Section
124102, is hereby defined as that part of the available funds which may be used at the option of the association to pay any or all withdrawals without requiring notice of intention to withdraw or before the maturity of a notice of intention to withdraw and regardless of the non-payment of any or all matured withdrawal claims, or for the purpose of making loans or investments, or for any other purpose not prohibited by law.

If there are no matured withdrawal claims (excepting claims for the payment of which funds have been set aside by the association) then all of the available funds shall be unrestricted funds.

If there are matured withdrawal claims (for the payment of any of which funds have not been set aside by the association), then, whether or not the association is on notice, not to exceed one-third of the available funds shall be unrestricted funds, and at least one-third of the available funds shall be applied to the payment of matured withdrawals. The remaining one-third shall be restricted or unrestricted funds at, the option of the association; provided, however, that no portion of it may be used for the payment of unmatured withdrawal claims so long as any matured withdrawal claims remain unpaid.

Notwithstanding anything to the contrary in this act, however, withdrawals may be made at any time without notice from pledged shares and investment certificates, whether or not the association is on

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notice; provided, the full amounts of such withdrawals shall be used to pay the indebtedness for which such shares or investment certificates are pledged, or any part thereof.

No association shall make any contract waiving in any manner any of the provisions of this section and, if any such contract shall be so made, such contract shall be void.

SOURCE: GC §41301.