New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1904-02-01
BUILDING LOAN CHANGES
Superintendent KIburn to Haze Re
strictirc Measures Introduced.

Albany Jan S1.-Legisla;ive measures % restrict
the operations Of building and loan associations
according 70 recommendations OF Superintendent
Kilburn y the State Banking Department. viii be
introduced IN the legislature within a few days.
Two bills have been drawn. and in the hands
OF Attorney General C-nneen for scrutiny as to
form and phraseology- They VIII provide three
amendments the sections Of the State Banking
law governing the conduct OF those associations as
follows:
First-1.akine absolute the qualified prohibition
forbdding a building and loan association from
Second-Prohibiting an association operating on
the gross premium p2n az Qnce 5Te4 br s1I Pm
rnediately available for the payment OF DIVIDENDS
Thrd-Prohiblting an association from lending
money property situated more than hfty niles
from its principal Office.
Two separate bills were deemed necessary to
draft the three propositions into the banking law.
they are amendments 10 two sections OF that
statute. superintendent Kilhurn makes this state
rent concerning the necessity for and the prob
able effect OF the legislation:
The present provisions Of the Banking law. pro-
hihtnE a building and loan association from Lean
ing money on second mortgages applies only 20
those associations which were not ensaEe9 IN ame
The exception shoald be repealed The moneys OF
lie nemuership Of these associations. ought not
10 be hazarded in loans that cannot b adequateF
protected in case Of the foreclosure OF prior lien
~ ~, H., ~ ~, -, So ,,-iped Out utterly
eorapany that cannot live II refused the right 20
90 "a hazardous business cannot die too soon iOr
the good OF its members and the public.
II is also deemed important that there shoulo De
added q the law positive prohibition against any
associa tiCn operating upon the gross premium
plan at once treating such premium as an asset
fully earned and therefore Immediately aNallahle
fcr the payment OF dividends OF expenses. IN prac-
dee gross premium is simply added To the amount
az the loan advance made 20 member. ana goes
swell the amount 81 the mortgage. which IS ire
Cuenrly dangerously isrge even without Strn ad-
ditior. Tho 1e ~ ard Jhe premium are N theory 10
be cancelled together hy maturing the Stock-pef-
haps eight years. or. more probaolHs twelve
years ahead. and quite rs Likely never. The law
should permit only that portion ot the premium
20 be Regarded earned which has been actually
paid.
security upon real estate located moro than ATTY
miles from its principal Office for the transaction
OF business. That would seem 10 be "A very reason
able and salutary provision. il stands for economy
Of operation. and tends 20 assure a more inte.-
gent determination OF property values. No good
reason occurs 70 me why this restriction. now ap-
plicable only to associations organized under the
law OF 1884 should not be extended 10 all other as
Eocistiors With the enactment or the three amend
nents ! confident that occasion for building
and association scandals and opportunities tor
abuses and frauds in their management would be
removed almost altogether and these Institutions
be put upon plane enabling all Of them TO render
q useful service.
Other amendments TO the State Banking Law will
probably be suggested by the superintendent later
In the session.