Okla. Stat. tit. 71, § 71-1-308

requirements.

A. In addition to all other applicable registration provisions

specified in this act, investment certificate issuers are subject to

the provisions of this section. As used in this section:

1. "Investment certificate" means thrift certificates,

certificates of deposit, savings obligations and similar

certificates or obligations issued and sold by an investment

certificate issuer as defined in paragraph 2 of this subsection; and

2. "Investment certificate issuer" means any financial

institution or person, other than a federally or state chartered

bank, bank holding company, trust company or savings and loan

association, or any credit union, which accepts investor funds or

deposits in exchange for the issuance of investment certificates;

provided, however, the term "investment certificate issuer" shall

not include a financial institution or person which, as of November

1, 1985, issued only the following securities:

a. investment certificates exempt under the provisions of

Sections 1-201 through 1-203 of this title,

b. investment certificates registered by coordination

under Section 1-303 of this title, or

c. any other security as to which the Administrator, by

rule or order, finds that registration is not

Oklahoma Statutes - Title 71. Securities Page 38

necessary or appropriate for the protection of

investors.

Nothing contained in this act shall be construed as precluding

an investment certificate issuer from qualifying for and relying

upon any of the exemptions from the provisions of Sections 1-301 and

1-504 of this title as contained in Sections 1-201 through 1-203 of

this title.

B. In addition to other powers conferred by this act, the

Administrator shall have power to require an investment certificate

issuer to:

1. Cause its books and records to be made available at its

offices and to provide to the Department a trial balance within five

(5) days of the commencement of any examination. The books and

records shall be audited at least once each year by an independent

certified public accountant in accordance with generally accepted

auditing standards, and the report thereof, including financial

statements prepared in accordance with generally accepted accounting

principles, furnished to the Administrator in such form as he or she

may require;

2. Observe methods and standards, including classification

standards of loans, which the Administrator may prescribe by rule

adopted and promulgated pursuant to the Administrative Procedures

Act for determining the value of various types of assets;

3. Maintain its accounting systems and procedures in accordance

with such regulations as adopted and promulgated by the

Administrator pursuant to the Administrative Procedures Act;

provided, the accounting system required shall have due regard to

the size of the investment certificate issuer;

4. Charge off the whole or any part of an asset, the value of

which, at the time of the Administrator's action, has deteriorated

for reasons set forth by the Administrator by rule adopted and

promulgated pursuant to the Administrative Procedures Act; and

5. Write down an asset to market value as prescribed by the

Administrator by rule adopted and promulgated pursuant to the

Administrative Procedures Act.

C. Every investment certificate issuer shall obtain from the

Administrator a written acknowledgment, issued in accordance with

procedures adopted and promulgated pursuant to the Administrative

Procedures Act, that the investment certificate issuer engages in

the business of accepting investor funds or deposits in exchange for

the issuance of investment certificates. Any investment certificate

issuer who obtains such an acknowledgment shall be subject to this

section and shall possess all the rights, powers and privileges and

shall be subject to all of the duties, restrictions and limitations

contained herein. No company or person who fails to obtain such
ness of accepting investor funds or deposits in exchange for

the issuance of investment certificates. Any investment certificate

issuer who obtains such an acknowledgment shall be subject to this

section and shall possess all the rights, powers and privileges and

shall be subject to all of the duties, restrictions and limitations

contained herein. No company or person who fails to obtain such

acknowledgment within ninety (90) days of the effective date of the

adoption by the Administrator of procedures governing the issuance

Oklahoma Statutes - Title 71. Securities Page 39

of a written acknowledgment shall possess or exercise, unless

expressly given and possessed or exercised under other laws, any of

the benefits, rights, powers or privileges which are herein

conferred on investment certificate issuers. Any company or person

who fails to obtain a written acknowledgment as described herein may

not engage in the business of issuing investment certificates.

D. Any officer, director or employee of an investment

certificate issuer found by the Administrator to be dishonest,

reckless, unfit to participate in the conduct of the affairs of the

institution, or practicing a continuing disregard or violation of

laws, rules, regulations or orders which are likely to cause

substantial loss to the company or likely to seriously weaken the

condition of the company shall be removed immediately from office by

the board of directors of the investment certificate issuer of which

he or she is an officer, director or employee, on the written order

of the Administrator; provided, that the investment certificate

issuer or officer, employee, or director may within ten (10) days

file a notice of protest for the removal with the Commission, and as

soon as possible thereafter, the Commission will review the order of

the Administrator and make findings as it deems proper, and that,

pending said time, the officer, employee or director shall not

perform any of the duties of his office.

E. An investment certificate issuer shall not, without the

consent of the Administrator:

1. Make a loan to any of its stockholders owning twenty-five

percent (25%) or more of the stock of the investment certificate

issuer, or its officers or directors;

2. Make a loan to any employee in excess of Ten Thousand

Dollars ($10,000.00); or

3. Make a loan to or other investment in or purchase any asset

from any company in which any of its officers, directors or

stockholders may have any direct or indirect interest, unless made

in an arm's length transaction.

F. An investment certificate issuer shall not, without the

consent of the Administrator:

1. Lend money in excess of ten percent (10%) of its

shareholders' equity to any person, association, partnership or

corporation liable for such obligations; provided, however, that

this limitation does not apply to the purchase of investment

securities; or

2. Engage in, or acquire any interest in, any business

prohibited to a bank chartered under the laws of this state.

G. The shareholders' equity of an investment certificate issuer

shall not be less than ten percent (10%) of the investment

certificates outstanding. Provided, an investment certificate

issuer lawfully incorporated and operating in this state on or

before November 1, 1985, with less than the above specified

Oklahoma Statutes - Title 71. Securities Page 40

shareholders' equity shall, at the beginning of each fiscal year

thereafter, increase its shareholders' equity by a minimum of one-

fourth (1/4) the difference between its shareholders' equity on

November 1, 1985, and the above specified amount until such time as

its shareholders' equity equals or exceeds the amount specified

above. For purposes of computing the shareholders' equity, the

reserve against bad debts shall be included.

H. Every investment certificate issuer shall maintain a reserve
quity by a minimum of one-

fourth (1/4) the difference between its shareholders' equity on

November 1, 1985, and the above specified amount until such time as

its shareholders' equity equals or exceeds the amount specified

above. For purposes of computing the shareholders' equity, the

reserve against bad debts shall be included.

H. Every investment certificate issuer shall maintain a reserve

against bad debts in an amount required by the Administrator by rule

adopted and promulgated pursuant to the Administrative Procedures

Act, but in no event shall the reserve against bad debts be less

than two percent (2%) of total loans outstanding.

I. If the Administrator finds the capital of an investment

certificate issuer to be impaired according to the standard set

forth in subsection G of this section, the Administrator may:

1. Give notice of the impairment to the directors and

shareholders of the investment certificate issuer and levy an

assessment in a designated amount upon the holders of record of the

investment certificate issuer's stock to remedy an impairment of

capital. Upon receipt of an order to levy an assessment, the

directors shall cause to be sent to all holders of stock, at their

addresses as listed on the books of the investment certificate

issuer, a notice of the amount of the assessment and a copy of this

subsection. If an assessment is not paid within ninety (90) days

after the order is mailed, the Administrator, at his or her

discretion, may offer the shares of the defaulting stockholders for

sale at public auction at a price which shall not be less than the

amount of the assessment and the cost of the sale; or

2. Apply to the district court of any county where the assets

of the investment certificate issuer are located for an order

appointing a conservator of, and directing him to rehabilitate, the

investment certificate issuer. If all reasonable efforts to

rehabilitate the investment certificate issuer fail, the

Administrator may apply to the court for an order directing the

appointment of a liquidator to dissolve any such issuer and

liquidate its assets. All rights and interests of the stockholders

in the stock, property and assets of such investment certificate

issuer are thereby terminated except the rights of stockholders to

the proceeds of liquidation, if any, after all other valid claims,

including interest, against the assets of the investment certificate

issuer and the proceeds of liquidation have been satisfied. The

conservator or liquidator appointed under this subsection shall meet

qualifications established by the Administrator by rule adopted and

promulgated pursuant to the Administrative Procedures Act.

J. Whenever the capital or reserve of any investment

certificate issuer shall be impaired according to the standards set

forth in subsections G and H of this section, the investment

Oklahoma Statutes - Title 71. Securities Page 41

certificate issuer shall make no new loans, renew any investment

certificates or sell new investment certificates without the consent

of the Administrator.

K. 1. It shall be unlawful and shall be deemed a Class C2

felony offense for any investment certificate issuer to issue

investment certificates when insolvent.

2. Every officer, director, principal stockholder, or every

other person who materially participates or aids in the issuance of

an investment certificate in violation of this subsection, or who

directly or indirectly controls any such person, shall be jointly

and severally liable, unless the officer, director, principal

stockholder, or any other person who so participates, aids or

controls, sustains the burden of proof that the person did not know,

and could not have known, of the existence of the facts by reason of

which liability is alleged to exist. There shall be contribution as

in cases of contract among the persons so liable.

3. The rights and remedies provided for in this subsection are
or, principal

stockholder, or any other person who so participates, aids or

controls, sustains the burden of proof that the person did not know,

and could not have known, of the existence of the facts by reason of

which liability is alleged to exist. There shall be contribution as

in cases of contract among the persons so liable.

3. The rights and remedies provided for in this subsection are

in addition to any other rights or remedies provided for in Title 71

of the Oklahoma Statutes, or that may exist at law or in equity.

L. The Administrator may as often as he or she deems it prudent

and necessary for the protection of the public, make or cause to be

made examinations of the books, records, papers, assets and

liabilities of every kind and character owned by, or relating to,

every investment certificate issuer.

M. Every investment certificate issuer shall make and file with

the Administrator reports at such times and in such form as the

Administrator may prescribe by rule or order. The reports shall be

verified by the oath of either the president, the vice-president, or

the secretary and attested by the signature of two or more of the

directors. Each report shall exhibit in detail, as may be required

by the Administrator, the resources and liabilities of the

investment certificate issuer at the close of business on the day to

be specified by the Administrator.

N. Every investment certificate issuer whose investor funds or

deposits are not insured by an agency of the government shall

disclose on the face of each investment certificate in ten-point

type the following:

"This certificate is not insured by the Federal Deposit

Insurance Corporation or any other agency of the government."