Membership of Borrowers

COL120106 11 GCAFINANCE & TAXATION CH. 139 MISCELLANEOUS PROVISIONS AFFECTING ASSOCIATIONS Any association may (but shall not be required to) provide in its bylaws that every person holding a certificate of membership as a borrower from such association shall be a member thereof, and in the case of any association having by-laws containing such provision every person holding a certificate of membership as a borrower from such association shall be a member thereof. Any applicant for a loan from any association having by-laws containing such provision, who is not a member of such association, may be permitted to become a member without purchasing or subscribing for shares of such association, upon application made to the association before or at the time of the filing of his loan application. A certificate of membership shall be issued to every such applicant accepted by such association as a member and at all meetings of the members of such association (or if persons other than members of such association shall also be entitled to vote), then at all meetings of the members of such association and of such other persons as shall be entitled to vote), and on all matters of the association requiring the vote of shareholders, stockholders, or other person entitled to vote, borrowing members, in person or by proxy, shall be entitled to cast one vote each; provided, however, that in the case of any association having by-laws containing the provision above referred to in this section where a loan is made to, or property securing a loan is owned by, two or more persons, each of such persons shall be a member, but such persons in the aggregate shall hold one certificate and have one vote, and such vote shall be cast by the majority of such persons present in person or by proxy at such meeting, or if only one of such persons is present in person or by proxy then by that one. Any person who shall be a member of an association solely by reason of holding a borrower’s membership shall cease to be a member upon

(a)full repayment of the loan including all advances or

(b)the sale, exchange, transfer or other disposition of such loan by the association or

(c)transfer of the property securing the loan to another person or persons, but from and after such transfer the person or persons acquiring such property shall become a member or members in lieu of the person or persons making such transfer upon being issued a certificate of membership as a borrower; provided, however, that the association, until it has notice of such transfer, shall be entitled for all purposes to treat the transferor as a member of the association. Person, as used in this section, includes person, firm, copartnership, association and corporation.