214.53 Effect of unauthorized investments.

(1) If a savings bank makes a loan or other investment that is not authorized under this subchapter, it shall be due and payable according to its terms and the obligation of the loan is not impaired.

(2) A director or officer of a savings bank may not knowingly participate in or assent to, or knowingly permit an officer, employee or agent of the savings bank to make, an investment that is not authorized by this subchapter.

(3) The division may require a director or officer of a savings bank who knowingly participates in or assents to, or who knowingly permits an officer, employee or agent of the savings bank to make, an investment that is not authorized by this subchapter to obtain an indemnity bond, insurance, or collateral sufficient to indemnify the savings bank against damages that the savings bank may sustain as a result of the investment. If an unauthorized investment, the amount considered sufficient to indemnify the savings bank shall be the difference between the book value and the market value of the investment at the time the division determines that the investment is unauthorized. If an unauthorized loan, the amount considered sufficient to indemnify the savings bank shall be the difference between the book value of the loan and the amount of the loan that could have been made under this subchapter. If an unauthorized investment is sold or disposed of without recourse, the division shall release all or part of the indemnity after deducting any loss. If the balance of an unauthorized loan is reduced to an amount that would permit the loan to be made under this subchapter, the indemnity shall be released. In making a determination under this subsection, the division may order an independent appraisal at the savings bank's expense.

History: 1991 a. 221; 1995 a. 27.