# Financial Institutions (GFI) ## Title 8. Savings and Loan Associations -- Board of Commissioners and Division ### Subtitle 1. Definitions; Policy #### Section 8-101 (a) In this title and in Title 9, the following words have the meanings indicated. (b) "Affiliate" means any corporation, business trust, statutory trust, association, partnership, sole proprietorship, or other similar organization or person of which an association or any officer, director, or controlling person of an association, directly or indirectly: (1) Owns or controls either a majority of the voting shares or controls in any manner the election of a majority of its directors, trustees, or other persons exercising similar functions; or (2) Otherwise controls the management of that organization. (c) "Control" means the ability of a person to direct the management or policies of an association or entity or elect a majority of a board of directors or the ownership of more than 10 percent of the outstanding shares of any class of securities of an association or interest in an entity. (d) "Controlling person" means any person or entity, acting directly or indirectly, individually or in concert with one or more other persons or entities, or through one or more subsidiaries, who: (1) Owns, controls, holds with power to vote, or holds proxies representing 10 percent or more of the voting shares, rights, or interests of any association or corporation; or (2) Controls in any manner the election or appointment of a majority of the directors of that association or corporation. (e) "Division Director" means the Director of the Division of Savings and Loan Associations. (f) "Holding company" means any company or other entity which directly or indirectly controls any other company, or other entity. (g) "Immediate family" means a spouse, child, child's spouse, parent, sibling, grandparent, or grandchild. (h) "Related entity" means an affiliate, holding company, or subsidiary of a savings and loan association. (i) "Savings and loan association" or "association" means, unless the context clearly requires otherwise, a corporation that is chartered under the laws of this State as a savings and loan association. (j) "Secretary" means the Secretary of Labor. (k) "Subsidiary" means any company or other entity which is directly or indirectly controlled by any controlling person. #### Section 8-102 (a) In Title 9 of this article and this title the policy of this State is to provide for: (1) The protection of the interests of customers in savings and loan associations and the general public in the soundness and preservation of the industry; (2) The safety and soundness of the business of savings and loan associations; (3) The conservation of assets of savings and loan associations; and (4) Adequate rulemaking power and administrative discretion so that regulation and supervision of savings and loan associations may be flexible and readily responsive to changes in economic conditions and to changes in savings and loan priorities. (b) Title 9 of this article and this title embody standards to be observed by the Division Director in the exercise of the Director's discretionary powers, in the adoption of regulations, in the examination and supervision of associations subject to Title 9, and in all matters of construction and application of Title 9 of this article and this title required for any determination or action of the Division Director. #### Section 8-103 Subject to the evaluation and reestablishment provisions of the Program Evaluation Act, the provisions of this subtitle relating to the Division of Savings and Loan Associations and relating to the regulation of savings and loan associations are of no effect and may not be enforced after July 1, 1992. ### Subtitle 3. Division of Savings and Loan Associations #### Section 8-301 There is a Division of Savings and Loan Associations in the Maryland Department of Labor. #### Section 8-302 (a) The Secretary of Labor shall appoint the Division Director with the approval of the Governor and the advice and consent of the Senate. (b) The Division Director serves at the pleasure of the Secretary. (c) The Division Director shall have experience in State or national regulation or management of financial organizations, which may include service as a bank or savings and loan association director or officer. (d) The Division Director is entitled to the salary provided in the State budget. #### Section 8-303 (a) The Division Director shall adopt regulations necessary to accomplish the policies set forth in Sec. 8-102 of this title. (b) Without limiting the authority conferred by subsection (a) of this section, the Division Director may adopt regulations consistent with the provisions of this title and Title 9 of this article with respect to: (1) Any powers conferred on the Division Director in this title and Title 9 of this article; (2) Reserve requirements; (3) Stock ownership and dividends; (4) Stock transfers (change of control); (5) Incorporators, controlling persons, directors, officers, employees, and agents of a savings and loan association; (6) Bylaws; (7) Related entities; (8) The structure of the office of the Division; (9) The operation, conduct, and management of savings and loan associations; (10) Withdrawable accounts, savings accounts and plans, and contracts for savings programs; (11) Loans and loan expenses, including underwriting procedures; (12) Investments; (13) Forms and definitions; (14) Types of financial records to be maintained by savings and loan associations; (15) Retention periods of various financial records of savings and loan associations; (16) Internal control procedures of savings and loan associations; (17) Chartering and branching; (18) Liquidations; (19) Mergers; (20) Conversions; (21) Reports which may be required by the Division Director; (22) Conflicts of interest; (23) Accounting rules; (24) Issuance of orders; (25) Removal of directors, officers, and employees; (26) Advertising; and (27) Enforcement remedies relating to limitations on interest rates on deposits. (c) Without limiting the authority conferred by subsection (a) of this section, directors and officers of savings and loan associations shall develop and implement, by December 31, 1989, written: (1) Real estate appraisal policies; and (2) Procedures pertaining to the hiring and performance of real estate appraisers. (d) The procedures required under subsection (c)(2) of this section shall set forth specific factors to be considered by the savings and loan association's directors and officers, including but not limited to: (1) Whether the appraiser is licensed or certified under the Business Occupations and Professions Article; and (2) The real estate appraiser's: (i) Professional education; and (ii) Experience in real estate appraising. (e) Real estate appraisal policies and procedures shall be submitted by the savings and loan associations to the Division Director for review and approval. (f) The regulations adopted by the Division Director may include reasonable requirements and limitations on the types and amounts of investments, the manner of raising capital, and the nature and amounts of reserves, irrespective of their effects on free economic competition. (g) If the Division Director believes that a savings and loan association or any of its controlling persons, directors, officers, agents, or employees has violated any provision of this title or Title 9 that relates to the association, the Division Director immediately shall report the violation to: (1) The Secretary of Labor; (2) The Governor; and (3) The Attorney General, who shall take the appropriate steps to institute an investigation or other appropriate action for the violation. (h) The Division Director may provide advisory opinions on conflicts of interest on request. #### Section 8-305 (a) With the approval of the Secretary, the Division Director may appoint the staff provided in the State budget. (b) Except as provided in subsection (c) of this section or otherwise by law, the Division Director shall appoint and remove all personnel in accordance with the provisions of the State Personnel and Pensions Article. (c) The deputy director is in the management service of the State Personnel Management System. #### Section 8-306 Before taking office, the Division Director shall take the oath required by Article I, Sec. 9 of the Maryland Constitution. #### Section 8-307 (a) The Division Director shall devote full time to the duties of the office. (b) The Division Director and staff may not be officers, directors, employees, auditors, agents of, or attorneys for, nor retained in any manner by, nor have any ownership interest or deposit whatsoever in, any savings and loan association or related entity. (c) The Division Director, Division staff, and members of the immediate families of the Division Director and Division staff, as defined in Sec. 5-101 of the General Provisions Article may not accept, directly or indirectly, any gift, gratuity, or remuneration of any type from any savings and loan association or related entity or from any director, officer, controlling person, employee, or agent of any savings and loan association or related entity. (d) (1) The Division Director, Division staff, and members of the immediate families of the Division Director and Division staff as defined in Sec. 5-101 of the General Provisions Article may not become indebted to any association or related entity that is subject to the jurisdiction of the Division Director. (2) Any person who violates any provision of this section is subject to forfeiture of that person's office or employment in addition to any other penalty prescribed by law. (e) (1) Subject to paragraph (2) of this subsection, nothing in this section may be construed to affect any contractual obligation, including a savings account, in existence before January 15, 1986. (2) (i) All contractual obligations, including savings accounts, in existence before January 15, 1986, and the corresponding dollar amounts shall be fully disclosed to the Secretary of Labor. (ii) The Secretary of Labor shall file each disclosure with the State Ethics Commission. (f) For a period of 2 years after termination of employment with the Division of Savings and Loan Associations, if the Division Director or former deputy division director is employed by a Maryland savings and loan association or becomes a director, officer, attorney, or agent of a Maryland savings and loan association, that individual may not: (1) Represent, formally or informally, the association in any judicial, administrative, or other proceeding in which: (i) The Division of Savings and Loan Associations is a party; and (ii) The former Division Director or former deputy division director substantially participated; (2) Participate in any application submitted to the Division for the Division's approval; or (3) Attempt to influence, or make any oral or written communication, on behalf of the association in any matter before the Division relating to the association in which the individual participated personally and substantially as Division Director or former deputy division director. #### Section 8-308 After notifying the Secretary, the Division Director may: (1) Subpoena witnesses and administer oaths or affirmations in the examination of any controlling person, director, officer, employee, or agent of an association or related entity, or of any other person in relation to the affairs, transactions, and conditions of the association or related entity; (2) Require the production of records, books, papers, contracts, and other documents; and (3) Issue subpoenas duces tecum. #### Section 8-309 (a) (1) On June 30 of each year, or at the discretion of the Division Director or as circumstances warrant, the Division Director shall provide a written report to the Governor, the President of the Senate, the Speaker of the House of Delegates, and the Secretary of Labor on: (i) The operations of the Division Director's office; (ii) The condition of the savings and loan industry, including any violations of this subtitle or Title 9 of this article and the regulations adopted under those titles; and (iii) As to the laws that the Division Director administers, amendments that the Division Director considers desirable. (2) The report is confidential and is not subject to disclosure in accordance with the provisions of Title 4, Subtitle 3, Part III of the General Provisions Article. (b) (1) On June 30 of each year, the Division Director shall submit a report to the General Assembly in accordance with Sec. 2-1257 of the State Government Article describing: (i) The operations of the Division Director's office; (ii) The general condition of the savings and loan industry; and (iii) Any recommended legislative changes. (2) The report may include a summary of final enforcement actions taken by the Division Director but may not include pending investigations of violations of law reported under subsection (a) of this section. #### Section 8-310 Subject to the evaluation and reestablishment provisions of the Program Evaluation Act, the provisions of this subtitle relating to the Division of Savings and Loan Associations and relating to the regulation of savings and loan associations are of no effect and may not be enforced after July 1, 1992. ### Subtitle 4. Orders and Hearings #### Section 8-401 (a) The Division Director may issue orders: (1) To compel a savings and loan association or related entity to comply with its charter or bylaws, any applicable law, or any rule or regulation; (2) To direct a savings and loan association or related entity to cease and desist from any unsafe or unsound business practice including, but not limited to, unsound or unsafe interest rates, any practice injurious to the public interest, or any violation of State law or regulation relating to savings and loan associations; or (3) To direct a savings and loan association or related entity to remove any officer, director, or employee who has participated in or consented to any violation of law, regulation, or order relating to savings and loan associations, any unsafe or unsound business practice in the operation of the association, any insider loan not authorized by Sec. 9-307 of this article, or any repeated violation of the association's charter or bylaws. (b) An order issued by the Division Director under this section to a savings and loan association, or related entity shall: (1) Be in writing and signed by the Division Director; (2) State the alleged violation in detail and the facts that constitute the violation; (3) Direct the association or related entity to discontinue the violation or to take the ordered remedial action; and (4) State that the association or related entity has a right to a hearing with respect to matters set forth in the order if it submits a request for hearing within 20 days of the date of the order. (c) Upon receipt of such request, a hearing shall be scheduled promptly before the Division Director or the Division Director's designee and notice of the date, time, and place of the hearing shall be provided to the association, holding company, or subsidiary in writing by the Division Director. (d) An order shall be sent by certified mail, return receipt requested, bearing a postmark from the United States Postal Service, to: (1) The president of the savings and loan association or related entity at its principal office in this State; or (2) Whomever the association or related entity designates to the Division Director. (e) (1) (i) In addition to an order issued under subsection (a) of this section, the Division Director may issue an emergency order with respect to any matter set forth in subsection (a) of this section if the Division Director determines that the protection of depositors, members, or stockholders of the association or the protection of the public requires immediate corrective action. (ii) Emergency orders shall: (1) Be effective on receipt; (2) Specify the charges and a hearing date within 30 days; and (3) Notify the recipient that, upon application, a hearing to abate the order will be scheduled within 10 days. (2) By its terms, an emergency order may be continued in effect until the effective date of a final order. #### Section 8-402 (a) Unless issued under Sec. 8-401(e) of this subtitle, an order issued under this subtitle may not become effective until the savings and loan association or related entity named in the order has been given an opportunity for a hearing before the Division Director or the Division Director's designee. (b) If the savings and loan association or related entity does not request a hearing within the time specified in Sec. 8-401(b)(4) of this subtitle or does not appear at the scheduled hearing, the order becomes final. (c) (1) After notifying the Secretary, the Division Director or the deputy division director may issue subpoenas compelling the attendance of witnesses or the production of records and documents at the hearing. (2) If any person fails to comply with the subpoena, the Division Director or deputy division director may apply to the Circuit Court for Baltimore City for an order holding the person in contempt. If the court finds that, without reasonable cause, the person has failed to comply with the subpoena, the court may find the person in contempt and punish the person as if for contempt of court. (3) The Division Director, the deputy division director, or the Division Director's designee may administer an oath to witnesses. (4) The Division Director shall maintain a record of the testimony and exhibits admitted at the hearing. (5) The Division Director may adopt rules of procedure governing the conduct of hearings. (6) If the Division Director determines by regulation that a procedure required by Title 10, Subtitle 2 (Administrative Procedure Act - Contested Cases) of the State Government Article does not apply to hearings before the Division, hearings scheduled by the Division may be conducted without regard to the procedure. (7) The issuance of emergency orders in accordance with Sec. 8-401(e) of this subtitle is not subject to Title 10, Subtitle 2 (Administrative Procedure Act - Contested Cases) of the State Government Article. (d) After the savings and loan association or related entity has been given an opportunity for a hearing, the Division Director or the Division Director's designee shall issue a final order within 30 days after the conclusion of the hearing. The order: (1) Shall be mailed as provided in Sec. 8-401 of this subtitle; and (2) Becomes final 30 days after issuance of the order. #### Section 8-403 (a) Any party aggrieved by a final order of the Division Director may appeal from the order to the Circuit Court for Baltimore City under Title 10, Subtitle 2 (Administrative Procedure Act - Contested Cases) of the State Government Article. (b) The filing of an appeal may not stay the effectiveness of the final order. #### Section 8-404 Subject to the evaluation and reestablishment provisions of the Program Evaluation Act, the provisions of this subtitle relating to the Division of Savings and Loan Associations and relating to the regulation of savings and loan associations are of no effect and may not be enforced after July 1, 1992. --- Md. Code Ann., Fin. Inst. (as displayed at mgaleg.maryland.gov, October 16, 2026)