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HomeFinancial CodeDiv. 7Ch. 7Art. 4§ 18535 Guaranty Fund Membership Fees

§ 18535 Guaranty Fund Membership Fees

Financial Code·California
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§ 18535 Guaranty Fund Membership Fees

Key Takeaways

  • •New members must pay $100,000 to join the guarantee fund.
  • •If a member's ownership changes significantly, they may need to pay more to reach $100,000 or 1% of their total debts, whichever is less.
  • •If the fund is too low, all members must pay extra money based on their debts.
  • •If two members merge, the surviving member must pay the assessment for both.

Example

A small bank joins the guarantee fund and later gets bought by a bigger company.

The small bank initially paid less than $100,000 to join. After the bigger company buys more than 50% of its stock, the bank must pay more to reach either $100,000 or 1% of its total debts, whichever is smaller.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 18535 Guaranty Fund Membership Fees

Guaranty Corporation shall establish and maintain a guarantee fund as follows: (a) Each new member, other than a new special member, shall pay one hundred thousand dollars ($100,000) to the guarantee fund to become a member. (b) Whenever the commissioner finds that the controlling interest or 50 percent or more of the stock of a member which paid less than one hundred thousand dollars ($100,000) to become a member has been transferred, the member shall pay to the fund whatever sums are necessary to bring the member’s total contribution pursuant to subdivision (a) to one hundred thousand dollars ($100,000) or 1 percent of the member’s total outstanding thrift obligations on the date of transfer, whichever is less. As used in this subdivision “controlling interest” means any percentage of stock which allows the stockholder to have control of management of the member company. The provisions of this subdivision shall not be applicable (1) if the transfer of stock is between affiliated companies of a holding company and the holding company is exempt from the qualification requirement of Section 25130 of the Corporate Securities Law of 1968 by subdivision (a) or (b) of Section 25101 of the Corporations Code, or (2) if the actual or contemplated change of ownership is to the transferor’s ancestors, descendants, or spouse, or any custodian or trustee for the account of the transferor or the transferor’s ancestors, descendants, or spouse, or to a transferee by a trustee or custodian for the account of the transferee or the transferee’s ancestors, descendants, or spouse. This subdivision shall apply, commencing January 1, 1987, to any member in existence prior to January 1, 1982. All other members shall be subject to this subdivision on and after January 1, 1982. (c) If the total amount in the fund (less any then unpaid demand made by the commissioner pursuant to Section 18492) on March 15 of any year is less than 11/2 percent of the total outstanding thrift obligations of all members, other than special members, as shown on the most recent independent audit reports required by Section 18405, then on or before May 1 of that year Guaranty Corporation shall levy an assessment. Each member, other than a special member, shall be assessed an amount equal to fifteen-hundredths of 1 percent of its outstanding thrift obligations as shown on its most recent independent audit report required by Section 18405. Guaranty Corporation may levy this assessment quarterly, based on members’ quarterly reports, at one quarter of the annual assessment rate authorized by this subdivision. (d) If the total amount in the fund (less any then unpaid demand made by the commissioner pursuant to Section 18492) on March 15 of any year hereafter is equal to or in excess of 11/2 percent of the total outstanding thrift obligations of all members, other than special members, as shown on the most recent independent audit reports required by Section 18405, then on or before May 1 of that year Guaranty Corporation shall levy an assessment on each member, other than a special member, that has not fulfilled both the following conditions as of March 15 of that year: (1) Paid total cumulative assessment payments to Guaranty Corporation exceeding in the aggregate 11/2 percent of the total outstanding thrift obligations of that member shown on its most recent independent audit report required by Section 18405; (2) Has a member’s account balance in Guaranty Corporation exceeding 11/2 percent of the total outstanding thrift obligations of that member shown on its most recent independent audit report required by Section 18405. Each member who has failed to fulfill both the preceding conditions as of March 15 of that year shall be assessed an amount equal to fifteen-hundredths of 1 percent of its outstanding thrift obligations as shown on its most recent independent audit report required by Section 18405. (e) If two members merge prior to May 1 of any year, the surviving member shall be liable for the assessment of the disappearing member that would have been payable to Guaranty Corporation pursuant to subdivision (c) or (d) had the merger not occurred prior to May 1. (Amended by Stats. 1985, Ch. 142, Sec. 34.5. Effective July 1, 1985.)

Last verified: January 23, 2026

Key Terms

corporationownershipcommissionsecuritiesstockobligationspousecontribution

Related Statutes

  • § 18523 Thrift Investment Guarantee Limits
  • § 687 Safe Deposit Property Notice
  • § 7252 Savings Association Service Investments
  • § 18496 Guaranty Corporation Membership Authority
  • § 18521.5 Industrial Loan Insurance Requirements

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Financial Code. Section 18535.
View Official Source