Guaranty fund

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    (a)    If a savings bank has a guaranty fund that is less than 5 percent of its total deposits, the savings bank:

        (1)    May not make any payment on the principal of the transferable deferred payment certificates that evidence payments to the initial guaranty fund; and

        (2)    May not pay interest on the certificates unless the Commissioner approves the payment and the rate of interest.

    (b)    If a savings bank has a guaranty fund that is less than 5 percent of its total deposits, the savings bank shall add to its initial guaranty fund, at the end of each fiscal year, at least 10 percent of its net earnings, calculated before interest on the transferable deferred payment certificates.


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