A. A mutual savings institution shall have the power to issue and to sell, directly or through underwriters, capital certificates that (i) represent nonwithdrawable capital contributions and (ii) constitute part of the reserves and net worth of the institution.

Terms Used In Virginia Code 6.2-1132

  • Fixed Rate: Having a "fixed" rate means that the APR doesn't change based on fluctuations of some external rate (such as the "Prime Rate"). In other words, a fixed rate is a rate that is not a variable rate. A fixed APR can change over time, in several circumstances:
    • You are late making a payment or commit some other default, triggering an increase to a penalty rate
    • The bank changes the terms of your account and you do not reject the change.
    • The rate expires (if the rate was fixed for only a certain period of time).
  • Mutual savings institution: means a savings institution that is organized and operated exclusively for the benefit of its members and that does not issue shares of capital stock. See Virginia Code 6.2-1100

B. Capital certificates:

1. Shall have no voting rights;

2. Shall be subordinate to all savings accounts, debt obligations and claims of creditors of the institution;

3. Shall constitute a claim in liquidation against any reserves, surplus, and other net worth accounts remaining after the payment in full of all savings accounts, debt obligations, and claims of creditors;

4. Shall be entitled to the payment of earnings prior to the allocation of any income to surplus or other net worth accounts of the institution; and

5. May be issued with a fixed rate of earnings or with a prior claim to distribution of a specified percentage of any net income remaining after required allocations to reserves, or a combination thereof.

C. Losses shall be charged against capital certificates only after reserves, surplus, and other net worth accounts have been exhausted.

1985, c. 425, § 6.1-194.25; 2010, c. 794.

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