§ 10-110. State of Maryland Deposit Insurance Fund

   (a) Establishment and administration. --

   (1) (i) The moneys of the State of Maryland Deposit Insurance Fund Corporation shall be maintained in a special nonlapsing fund, to be called the "State of Maryland Deposit Insurance Fund".

      (ii) In addition to the powers expressly provided in this title, the Fund shall have, and through the Fund Director may exercise to the extent of the moneys in and available to the Fund, all the corporate powers granted Maryland corporations under the Maryland General Corporation Law.

   (2) The Fund Director shall administer the State of Maryland Deposit Insurance Fund for the purposes of:

      (i) Insuring the savings accounts of member associations;

      (ii) Purchasing capital instruments, including net worth certificates, issued by a member association to enable that member association to qualify for federal insurance;

      (iii) Reimbursing savings account holders for loss incurred upon liquidation of a member association, up to the amount of insurance on any savings account;

      (iv) Providing funds for liquidity to or issuing obligations against the Fund for, or acquiring securities of or from a member association, affiliate, or acquiring entity in an emergency as determined by the Fund Director or to facilitate an acquisition, consolidation, merger, or transfer of assets and obligations;

      (v) Making capital contributions to member associations or entities acquiring, consolidating, or merging with, or acquiring assets and assuming obligations of, member associations, if the Fund Director determines that:

         1. The amount of the capital contribution is substantially less than the cost that the Fund would incur if the member association were liquidated, including the cost of reimbursing each savings account holder in the insured amount of each savings account holder's deposit in the liquidated member association; and

         2. The making of the capital contribution is necessary to facilitate the acquisition, consolidation, or mergers or transfers of assets and obligations;

      (vi) Paying to a receiver of any member association in receivership under § 9-708 of this article at the time of final distribution of the assets of the member association a sum equal to the amount that the insurance liability of the Fund has been reduced by reason of withdrawals made during the pendency of a conservatorship or receivership of the member association under any form of hardship withdrawal plan or partial distribution of assets approved by the court having jurisdiction over the receivership of the member association; and

      (vii) Making payments to any insured institution that assumes savings deposit or share account liabilities of a savings and loan association in receivership in an amount up to the total amount of the liabilities assumed and with respect to any specific deposit or share account not in excess of the amount of insurance on the deposit or share account, and agreeing to indemnify any insured institution that assumes these liabilities against any further liabilities to the extent deemed appropriate by the Fund Director but not to exceed the assets of the Fund.

   (3) (i) Notwithstanding any other provision in this section, the Fund Director shall notify the Legislative Policy Committee of any proposed action by the Fund Director regarding the making of a capital contribution under paragraph (2)(v) of this subsection or the making of a payment, or agreeing to an indemnification under paragraph (2)(vii) of this subsection at least 21 days before the action regarding the capital contribution, payment, or agreement to indemnify is taken.

      (ii) The Legislative Policy Committee shall assign the proposed action by the Fund Director regarding the making of a capital contribution, payment, or agreement to indemnify for review by the appropriate standing committees.

   (4) Any agreement specifying the terms and conditions of a capital contribution under this section shall retain all claims that the Fund may have against officers, directors, employees, or agents of any acquired savings and loan association. The Fund may condition the exercise of those claims only to the extent deemed necessary for the protection of the public interest and welfare and may provide for an indemnification for reasonable expenses.

(b) Loss limit. -- The amount of loss to be protected against for each depositor may not exceed the limit established from time to time by the rules and regulations of the Fund. This limit may not exceed the amount of federal insurance.

HISTORY: 1985, 1st Sp. Sess., ch. 6, § 3; 1985, 2nd Sp. Sess., chs. 3, 4; 1986, ch. 5, § 1; ch. 11, § 2; ch. 698.