Virginia Code 6.2-1407: Prohibitions on associations with certificates issued and outstanding; advertisements
A. An association that has certificates of investment issued and outstanding shall not:
Terms Used In Virginia Code 6.2-1407
- Association: means a corporation organized as an industrial loan association under the provisions of the Virginia Stock Corporation Act (§ 13. See Virginia Code 6.2-1400
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- real estate: includes lands, tenements and hereditaments, and all rights and appurtenances thereto and interests therein, other than a chattel interest. See Virginia Code 1-219
- State: when applied to a part of the United States, includes any of the 50 states, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the Northern Mariana Islands, and the United States Virgin Islands. See Virginia Code 1-245
1. Advertise that it carries insurance unless its certificates of investment are insured or guaranteed by a state or federal agency;
2. Own any shares of stock issued by any other corporation except to the extent legal for banks;
3. Invest more than 80 percent of the amount of its outstanding certificates of investment in loans secured by liens on real estate;
4. Make any loan secured by liens on real estate in excess of that percent of the appraised value permitted to banks;
5. Issue certificates of investment for the purpose of borrowing money from financial institutions; or
6. Issue a certificate of investment paying a higher rate of interest than four and one-half percent per annum, except that notwithstanding this limitation it may pay at any time an interest rate equal to the highest rate paid by any state savings institution or bank located in the same community in the Commonwealth.
B. An association that has certificates of investment issued and outstanding shall place in a prominent manner in every advertisement for, and upon any document evidencing ownership of, certificates of investment that are not insured by a state or federal agency the words: “The savings accounts in this association are not insured.”
Code 1950, § 6-251; 1956, c. 433; 1960, c. 64; 1966, c. 584, § 6.1-232; 1974, cc. 175, 176, § 6.1-232.1; 1978, c. 14; 1996, c. 16; 2010, c. 794.