§ 388. Fines and penalties for failure to make payments on instalment
shares. 1. Where dividends on instalment shares are credited by series,
a savings and loan association may impose fines upon the holders of
instalment shares of a series, their legal representatives or successors
in interest, if they neglect to pay dues, interest or premium when due,
but such fines shall not exceed one per centum per month of the amount
in default for the period during which such dues, interest and premium
shall have remained in default, except that a fine at the rate of two
per centum per month of the amount in default may be imposed during the
first three months of any default.

2. Where dividends on instalment shares are credited individually to
shares, a savings and loan association may declare a lower rate of
dividend on instalment shares upon which there has been a default for
more than sixty days since the last declaration of dividends, provided
that such dividend shall be not less than sixty per centum of the
dividend declared on like instalment shares not in default.

3. Where dues on instalment shares are applied directly in reduction
of a mortgage loan, a savings and loan association may provide, as one
of the terms of the obligation, that interest may be added to the unpaid
balance of the obligation on the first day of each month and computed
upon the unpaid balance of the obligation due as of the last day of the
preceding month.

4. No fine shall be charged against or deducted from the dues actually
paid by a member and no fines or penalties other than those provided in
this section shall be imposed for failure to meet payments on instalment
shares.