SAVINGS AND LOAN ASSOCIATIONS ‑- EXPENSE FUND ‑- INCORPORATORS' CONTRIBUTIONS TO ‑- TIME OF REIMBURSEMENT

SAVINGS AND LOAN ASSOCIATIONS ‑- EXPENSE FUND ‑- INCORPORATORS' CONTRIBUTIONS TO ‑- TIME OF REIMBURSEMENT

It is not necessary that the contingent fund of a savings and loan association should have attained the ultimate requirement of 5% of the amount due savings members as prescribed by § 33.12.140 RCW, before reimbursement of contributions to the expense fund may be made.  However, the minimum semi-annual [[semiannual]]credits to the contingent fund prescribed by RCW 33.12.150 (§ 51, chapter 235, Laws of 1945), must have been made to the contingent fund and the expense fund itself built up from profits as the supervisor shall direct, before the incorporators may be reimbursed for their contributions to the expense fund.

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                                                                     July 3, 1952

Honorable A. O. Kent
Supervisor of Savings and Loan
Department of Public Institutions
Public Lands-Social Security Building
Olympia, Washington                                                                                                              Cite as:  AGO 51-53 No. 340

Dear Sir:

            Under date of June 12, 1952, we issued our Opinion No. 51-53-324 to you relating to the contributions of the incorporators of a newly incorporated savings and loan association to the expense fund of the association, pursuant to the provisions of RCW 33.12.140 (§ 13, chapter 235, Laws of 1945).

            On the question of reimbursement of such contributions we stated on page 4 of that opinion that,

            "* * * We believe that it must be implied that the incorporators are entitled to such reimbursement out of the profits of the associationwhen such profits have reached the point where the contingent fund has been built up to 5% of the amount due savings members, as required by the fifth paragraph of § 13, and the payment of operating expenses out of earnings has been assured.  * * *" (Emphasis supplied.)

             [[Orig. Op. Page 2]]

            In view of the underscored portion of the above quoted statement, you have orally requested that we supplement our opinion of June 12th and ask our opinion on the question:

            "Is it mandatory that the contingent fund of a savings and loan association shall have been built up to an amount equal to 5% of the amount due savings members as required by RCW 33.12.140 (§ 13, chapter 235, Laws of 1945), before the incorporators may be reimbursed for their contributions to the expense fund?"

            It is our conclusion that it is not necessary that the contingent fund of a savings and loan association should have attained the ultimate requirement of 5% of the amount due savings members as prescribed by RCW 33.12.140, before reimbursement of contributions to the expense fund may be made.  However, the minimum semi-annual [[semiannual]]credits to the contingent fund prescribed by RCW 33.12.150 (§ 51, chapter 235, Laws of 1945), must have been made to the contingent fund and the expense fund itself built up from profits as the supervisor shall direct, before the incorporators may be reimbursed for their contributions to the expense fund.

                                                                     ANALYSIS

            RCW 33.12.150 provides that semi-annual [[semiannual]]credits shall be made from earnings to the contingent fund.  So long as such minimum credits to the contingent fund are provided for out of earnings, there would appear to be no objection to the use of a portion of the additional earnings for reimbursement of contributions to the expense fund.  It is to be assumed, of course, that in any such case the expense fund itself will have been built up from earnings to such an amount as the supervisor, in his discretion, shall have directed.

Very truly yours,

SMITH TROY
Attorney General

FRED L. HARLOCKER
Assistant Attorney General