Text consolidated by Valsts valodas centrs (State
Language Centre) with amending laws of:
22 May 2008 [shall come
into force on 01 July 2008];
4 December 2008 [shall come into force on 06 January
2009];
23 September 2010 [shall come into force on 22 October
2010];
24 May 2012 [shall come into force on 27 June 2012];
If a whole or part of a section has been amended, the
date of the amending law appears in square brackets at
the end of the section. If a whole section, paragraph or
clause has been deleted, the date of the deletion appears
in square brackets beside the deleted section, paragraph
or clause.
|
The Saeima1 has adopted
and the President has proclaimed the following Law:
Law On Savings
and Loan Associations
Chapter I
General Provisions
Section 1. Purpose of this Law
The purpose of this Law is to promote the availability of
financial resources, as well as regional development,
facilitating the co-participation of individuals in national
economy.
[20 November 2003, 21 June
2007]
Section 2. Concept, Tasks and Rights of a Savings
and Loan Association
(1) A savings and loan association is a co-operative society
with variable number of members and capital and in accordance
with this Law and the articles of association thereof provides
the following financial services to the members of the
association:
1) attracts investments of members and other repayable
funds;
2) credits members, also according to financial lease
provisions;
3) makes cash and non-cash payments for the provision of
services to members, using also non-cash means of payment;
4) carries out trade with financial instruments and currency
upon the instruction of members;
5) issues guarantees and other deeds of such liabilities, by
which it undertakes a duty to be responsible for debts of members
to creditors;
6) keeps valuables of members;
7) consults members in issues of financial nature;
8) [20 November 2003];
9) provides such information, which is related to the
settlement of debt obligations of a member;
10) with the permission of the Financial and Capital Market
Commission (hereinafter - Commission) carries out other
transactions, which are essentially similar to the abovementioned
financial services.
(2) The main task of a savings and loan association shall be
to develop the ability of members thereof to co-operate in order
to create credit resources on the basis of the principles of
mutual assistance and self-government, promoting economy, for the
satisfaction of personal, as well as economic and everyday needs
of members, thus promoting their welfare.
(3) A savings and loan association shall have the status of a
merchant.
(4) The savings and loan association shall be a legal person.
The savings and loan association has the right to acquire and
alienate movable and immovable property, including to accept
gifts, donations and inheritances, as well as to undertake
liabilities and be a plaintiff and defendant in a court in
accordance with the procedures specified in the articles of
association.
(5) Legal capacity of a savings and loan association shall set
in from the moment when such association has been registered in
the Enterprise Register of the Republic of Latvia.
(6) [21 June 2007]
[20 November 2003, 21 June
2007]
Section 2.1
Non-disclosable Information
(1) Information regarding transactions of a member of a
savings and loan association, which is obtained by the savings
and loan association when providing financial services, shall be
non-disclosable information not containing official secret.
(2) Information regarding accounts and transactions carried
out by a member of a savings and loan association shall be
provided to the member himself or herself and his or her legal
representative.
(3) The non-disclosable information at the disposal of a
savings and loan association shall be provided to a State
institution, State official, another institution and official in
accordance with the procedures specified in the Credit
Institution Law.
[4 December 2008]
Section 3. Legal Basis for the Operation of a
Savings and Loan Association
(1) The founding, operation, reorganisation and liquidation of
a savings and loan association shall be regulated by this Law,
the Co-operative Societies Law, the articles of association of
the relevant savings and loan association, the regulatory
provisions and orders issued by the Commission, the international
agreements entered into by the Republic of Latvia and other
regulatory enactments.
(2) The provisions of the Co-operative Societies Law in
relation to savings and loan associations shall be applicable
insofar as it has not been otherwise provided for in this
Law.
Section 4. Principles for the
Creation of Savings and Loan Associations
(1) Savings and loan associations shall be created for a
specific circle of members. The circle of members shall be
determined:
1) according to the territorial principle;
2) according to the employment principle;
3) according to the principle of community of interests.
(2) Each aggregate of members of a savings and loan
association shall be determined in the articles of association
thereof. The savings and loan association is not entitled to
accept such persons as members who do not conform to the
aggregate of members specified in the articles of association,
except the cases provided for in this Law.
Section 5. Members of a Savings and
Loan Association
(1) Natural persons who are of legal age and with a capacity
to act, who either live in the same administrative territory or
are owners of immovable property, or carry out commercial
activity or employment activity in the territory, may be members
of one savings and loan association. Such local government may be
a member of a savings and loan association, the inhabitants of
which are members of the relevant savings and loan association.
One savings and loan association may be created for activity also
in the adjacent administrative territories.
(2) Also natural persons who are of legal age and with a
capacity to act and who are employed with the same employer may
be members of one savings and loan association.
(3) Natural persons who are of legal age and with a capacity
to act and who are participants of one corporation (professional
association) or a professional creative social organisation, or a
trade union (trade union association), or a social sports
organisation may be members of one savings and loan association.
Also the relevant social or trade organisation may the member of
such savings and loan association.
(4) It may be provided for in the articles of association of a
savings and loan association that spouses of the members already
admitted and their children - persons with a capacity to act -
may become members thereof. A savings account may be opened for
minor children in a savings and loan associations.
(5) The following persons may be a member of one savings and
loan association:
1) an individual merchant, individual (family) undertaking,
farm or fishing undertaking, if their owners are members of a
savings and loan association;
2) a commercial company (partnership and capital company),
participants of which are natural persons, if one or several
members of the savings and loan association own more than 50 per
cent of the voting rights in the equity capital of such
companies;
3) a co-operative society of agricultural services,
co-operative society of apartment owners, horticultural
co-operative society or another society, which does not have the
status of a merchant, if at least one member of the savings and
loan association has voting rights in the equity capital of such
societies;
4) an association, members of which are only natural persons
and at least one of them is a member of the savings and loan
association.
(6) Legal persons shall not have the voting rights in a
savings and loan association.
(7) A member of a savings and loan association shall lose the
right to claim against the savings and loan association if no
transactions involving his or her account have been carried out
for the time period of 60 years.
[4 December 2008; 24 May 2012]
Section 6. Name and Legal Address of
a Savings and Loan Association
(1) The name of a savings and loan association shall contain
words "savings and loan association", and the name shall contain
a feature of an aggregate of members of a savings and loan
association.
(2) Only savings and loan associations and joining
organisations created thereby are entitled to use the words
"savings and loan association" in their name and for other
purposes.
(3) The location of the board of directors of directors of a
savings and loan association shall be the legal address of the
savings and loan association.
Section 7. Separation of the Liability of a Savings
and Loan Association and Members Thereof
(1) A member shall be liable for liabilities of a savings and
loan association with his or her shares in the equity capital of
the savings and loan association, however, he or she shall not be
liable with his remaining property. The savings and loan
association shall not be liable for the liabilities of the
members thereof.
(2) When joining a savings and loan association, a member
shall assume liability by his or her shares also for such
liabilities of the association, which have arisen prior to him or
her joining the association.
(3) A member who has withdrawn or has been excluded from a
savings and loan association shall be liable for such liabilities
of the savings and loan association, which have arisen until the
day when he or she withdrew from the association or was excluded
therefrom.
(4) Debts of individual members or other requests in relation
to members may not be recovered from the equity capital of a
savings and loan association. Until the day when a member has
withdrawn from the savings and loan association only the
dividends, which are due to the member, and deposits of the
member may be the subject of recovery upon such claims.
Chapter
II
Founding of a Savings and Loan Association
Section 8. Procedures for the Founding of a Savings
and Loan Association
(1) Not less than 20 natural persons with a capacity to act,
who conform to the requirements specified for natural persons in
Section 5 of this Law, may be founders of a savings and loan
association.
(2) In order to receive a special authorisation (licence) for
the operation of a savings and loan association, the association
to be newly founded shall submit the documents necessary for the
receipt of a special authorisation (licence) to the Commission in
accordance with the procedures provided for in regulatory
enactments, and regulatory provisions and orders of the
Commission. The Commission shall issue a special authorisation
(licence) for the operation of a savings and loan association for
an unspecified period of time. Registration of a savings and loan
association in the Enterprise Register of the Republic of Latvia
shall be performed only after a decision of the Commission on the
issuance of the special authorisation (licence) for the operation
of a savings and loan association has been submitted to the
Enterprise Register of the Republic of Latvia.
(3) An authorised representative of the founders of a savings
and loan association shall, within 15 days after a decision of
the Commission on the issuance of a special authorisation
(licence) for the operation of a savings and loan association has
been received, submit the following founding documents to the
Enterprise Register of the Republic of Latvia:
1) the foundation deed;
2) the articles of association;
3) the protocol of the foundation meeting;
4) a document certifying the legal address;
5) a document certifying investment of the equity capital;
6) a document certifying that the State fee for registration
and the fee for publication of registration has been paid;
7) a decision of the administrative body of the legal person
regarding participation in foundation of an association and the
authorisation issued to representatives of such legal person - if
a legal person is participating in foundation of an
association;
8) a decision of the Commission on the issuance of a special
authorisation (licence) for the operation of a savings and loan
association.
[24 December 2012]
Section 9. Procedures for the Licensing of a Savings
and Loan Association
(1) The Commission shall determine the procedures for the
issuance of a special authorisation (licence) of a savings and
loan association, as well as the restrictions related to the
operation of a savings and loan association.
(2) The Commission shall examine an application regarding
granting of a special authorisation (licence) within three months
after receipt of all the necessary documents. The Commission has
the right not to issue a special authorisation (licence) to a
savings and loan association to be newly founded, if laws,
regulatory provisions and orders of the Commission have not been
complied with in the foundation thereof.
Section 10. Requirements for Receipt
of a Special Authorisation (Licence)
In order to receive a special authorisation (licence) for the
operation of a savings and loan association, the founders thereof
shall:
1) prepare the foundation documents, articles of association
and documents regulating the operation of the savings and loan
association, which provide a clear idea regarding the planned
activity and the organisation corresponding thereto;
2) make the instalment of the minimum founding equity
capital;
3) propose candidates of the chairperson of the council, the
chairperson of the board of directors and the chairperson and
members of the audit commission of the savings and loan
association corresponding to the requirements of law.
Section 11. Submission of Notifications and
Authorisations of the Commission
(1) A savings and loan association shall require an
authorisation of the Commission for:
1) reorganisation of the savings and loan association;
2) carrying out of the transactions referred to in Section 2,
Paragraph one, Clause 10 of this Law.
(2) The Commission shall determine the documents to be
submitted and the procedures by which the conformity of members
of the council and of the board of directors of directors of the
savings and loan association with the requirements of this Law
shall be assessed.
(3) The savings and loan association shall, in accordance with
the procedures specified by the Commission, provide information
to the Commission regarding the composition of the council and
the board of directors of directors of the savings and loan
association and commencement of the provision of new financial
services by the savings and loan association.
(4) In order to ascertain the conformity of the members of the
council and the board of directors, as well as of the chairperson
of the audit commission of the savings and loan association with
the requirements of this Law, the Commission has the right to
invite the relevant persons to an interview.
(5) The Commission has the right, within 30 days after receipt
of all the necessary documents, not to allow that the members of
the council and the board of directors or the chairperson of the
audit commission of the savings and loan association commence the
fulfilment of their duties, if the referred to persons do not
conform to the requirements of this Law or the Commission is
unable to ascertain their conformity with the requirements of
this Law.
(6) The savings and loan association has a duty, not more than
15 days prior to taking of the relevant decision, to notify the
Commission in writing regarding an intent of changing the name or
legal address of the savings and loan association. If the
Commission has not objected against the change in the name or
legal address within seven days after receipt of the notification
of the savings and loan association, it shall be deemed that the
Commission has granted authorisation for changing the name or
legal address of the savings and loan association.
[4 December 2008]
Section 12. Requirements for Officials of a Savings
and Loan Association
(1) The following person may be the chairperson of the board
of directors, a member of the board of directors, the chief
accountant, the chairperson and a member of the audit commission
of the savings and loan association:
1) [21 June 2007];
2) who is competent in financial management matters;
3) who has the necessary education or professional experience
in the operation of savings and loan associations;
4) who has an impeccable reputation (none of the conditions
referred to in Paragraph two of this Section applies
thereto);
5) who has not been deprived of the right to perform
commercial activities.
(2) The following person may not be the chairperson of the
board of directors, a member of the board of directors, the chief
accountant, the chairperson and a member of the audit commission
of the savings and loan association:
1) who has been convicted of committing an intentional
criminal offence, also malicious bankruptcy;
2) who has been convicted of committing an intentional
criminal offence, even if the person has been released from
serving the punishment due to a limitation period, clemency or
amnesty;
3) against whom a criminal matter for committing an
intentional criminal offence has been terminated due to a
limitation period or amnesty.
(3) A person who conforms to the requirements of Paragraph
one, Clauses 2, 4 and 5 of this Section may be the chairperson of
the council and a member of the council of a savings and loan
association.
[20 November 2003, 21 June
2007]
Section 13. Grounds for Cancellation of a Special
Authorisation Issued for the Operation of a Savings and Loan
Association
The Commission may cancel a special authorisation (licence)
issued to a savings and loan association if:
1) the savings and loan association has not commenced the
operation within 12 months from the day when the special
authorisation (licence) was issued;
2) it is detected that the savings and loan association has
provided false information for the receipt of the special
authorisation (licence);
3) the savings and loan association does not comply with the
restrictions on the operation specified by the Commission;
4) the savings and loan association regularly does not comply
with the requirements of this Law and the regulatory provisions
and orders of the Commission;
5) the court has approved a decision taken in accordance with
the procedures specified in this Law on initiation of the
bankruptcy procedure of the savings and loan association;
6) the Commission has received a submission of the savings and
loan association regarding cancellation of the special
authorisation (licence) due to termination of the operation of
the savings and loan association in accordance with this Law;
7) the savings and loan association has not, for more than two
months after receipt of a decision of the Commission on warning
regarding cancellation of the special authorisation (licence),
voluntarily and in full amount made payments into the Deposit
Guarantee Fund;
8) the savings and loan association has been late in making
payments or has not made payments in full amount for financing of
the operation of the Commission in accordance with the procedures
specified in Law.
[4 December 2008]
Chapter
III
Capital and Distribution of Profit of a Savings and Loan
Association
Section 14. Own Funds of a Savings and Loan
Association
The own funds of a savings and loan association is the
difference between the assets and liabilities of the savings and
loan association.
Section 15. Equity Capital of a Savings and Loan
Association
(1) The equity capital of a savings and loan association shall
be formed by the sum of nominal values of shares of all members
of the savings and loan association. The member of the savings
and loan association may pay for his or her shares only in cash.
The minimum amount of the equity capital of the savings and loan
association shall be 2000 lats.
(2) The right to claim of a former member against a savings
and loan association regarding disbursement of shares shall
lapse, if the share has not been taken out within 60 years after
expiry of the term of disbursement of shares and the interested
person has not applied any claims regarding disbursement of
shares. After expiry of the term the shares not taken out shall
become the property of the savings and loan association.
[4 December 2008]
Section 16. Reserve Capital of a Savings and Loan
Association
(1) A savings and loan association shall create a reserve
capital, transferring at least 25 per cent from the annual net
profit therein (profit after payment of taxes), until the reserve
capital reaches at least 10 per cent from the total assets.
(2) Also other payments into the reserve capital may be
provided for in the articles of association of a savings and loan
association or by a decision of the general meeting (meeting of
authorised persons).
Section 17. Distribution of Net Profit of a Savings
and Loan Association
(1) The part of the net profit remaining after deductions into
the reserve capital shall be distributed according to the
provisions of the articles of association of the savings and loan
association.
(2) The dividends allocated shall be disbursed within 90 days
after allocation, and the dividends not taken out within the
referred to time period shall be deemed a claim investment.
Section 18. Activities of a Savings and Loan
Association Involving Credits
A savings and loan association is entitled to receive a credit
from a bank or a savings and loan association registered in the
European Union, from a global Latvian credit company, from an
association or foundation of savings and loan associations
registered in the European Union, from State and local government
funds, as well as from State and local government capital
companies.
[24 May 2012]
Chapter
IV
Types of Activities of a Savings and Loan Association and the
Requirements Regulating Activities Thereof
Section 19. Types of Activities of a Savings and
Loan Association
(1) After registration with the Enterprise Register of the
Republic of Latvia a savings and loan association is entitled to
carry out the activities specified in the articles of association
thereof and in the special authorisation (licence) issued by the
Commission.
(2) A savings and loan association shall accept investments
only from members thereof.
(3) A savings and loan association shall issue loans only to
members thereof - natural persons and to the persons referred to
in Section 5, Paragraph five, Clause 1 of this Law according to
the credit policy provisions approved by the general meeting
(meeting of authorised persons).
(4) The following shall be determined in the credit policy of
a savings and loan association:
1) the objectives for which loans shall be issued;
2) the interest rates and the procedures for the calculation
thereof;
3) the time periods for which loans shall be issued;
4) the types of security depending on the objective and amount
of the loan to be issued;
5) the objectives, for which loans may be issued without
security, and the amount of such loans;
6) the procedures for requesting a loan;
7) the procedures, by which a loan request shall be examined
and a decision on granting a loan or on refusal to grant it shall
be taken;
8) the procedures for supervision of the loans issued;
9) the procedures for recovery of loans not paid in due
time;
10) the provision that a member may utilise the received loan
only for the purpose, for which it was issued.
[21 June 2007; 25 May 2012]
Section 20. Requirements Regulating Activities of a
Savings and Loan Association
(1) The proportion of own funds of a savings and loan
association to the sum total of assets and off-balance sheet
items (capital adequacy) may not be less than 10 per cent.
(2) A savings and loan association shall arrange the assets
thereof so that satisfaction of legally justified claims of
creditors thereof could be ensured at any time.
(3) [4 December 2008]
(4) A savings and loan association is entitled to make
investments in State issued securities of the Republic of Latvia
and in mortgage bonds issued by banks registered in the Republic
of Latvia.
(5) A savings and loan association is not entitled to found
commercial companies, as well as to make investments in the
equity capital of other commercial companies.
(6) A savings and loan association is entitled to deposit the
funds not issued in loans to the members thereof only to a bank
or savings and loan association registered in the Republic of
Latvia or a foreign country.
(7) The risk of a transaction of a savings and loan
association shall be qualified as high, if the amount of the
transaction exceeds 10 per cent from the own funds of the savings
and loan association.
(8) The total sum of high-risk transactions may not exceed the
own funds of a savings and loan association more than eight
times.
(9) The total amount of loans issued to one member or a joint
risk group shall not exceed 25 per cent from the own funds of a
savings and loan association.
(10) The total amount of credits issued to members of a
savings and loan association, the board of directors and the
audit commission or their spouses, parents or children shall not
exceed 15 per cent from the own funds of the savings and loan
association, except cases when credits issued to such persons
have been secured with their additional shares or investments in
the savings and loan association.
(11) Credits, which individually or jointly exceed 1000 lats
and are allocated to the chairperson of the savings and loan
association, credit committee or to any member of the board of
directors, credit committee and audit commission, shall be
allocated with a decision unanimously taken by the board of
directors of the savings and loan association.
(12) The open foreign currency position of a savings and loan
association in an individual foreign currency shall not exceed 10
per cent and in total in all foreign currencies - 20 per cent
from the own funds.
[21 June 2007; 4 December 2008]
Section 21. Cases of Repayment of Overpaid Share
Value
(1) A savings and loan association shall, within a week after
a decision of the relevant administrative body of the savings and
loan association on non-acceptance of a person in the savings and
loan association, repay the value of the shares to the person in
monetary terms.
(2) A savings and loan association shall, within a week after
a decision of the relevant administrative body of the savings and
loan association on rejection of the purchase of additional
shares, repay the paid value of the additional shares to the
person in monetary terms.
(3) The entrance fee paid in by the person shall not be
repaid, if a decision on non-acceptance of the person in the
savings and loan association is taken.
Chapter V
Organisational Structure, Accounting and Annual Report of a
Savings and Loan Association
Section 22. Special Management Provisions of a
Savings and Loan Association
(1) Also a credit committee shall be created in a savings and
loan association in accordance with the procedures specified in
the articles of association thereof.
(2) A member of the board of directors and the audit
commission may not be a member of the credit committee of the
savings and loan association. The credit committee shall provide
a report on the work thereof in accordance with the procedures
specified in the articles of association of the association to
the general meeting (meeting of authorised persons) and the board
of directors of the savings and loan association.
(3) A savings and loan association, the number of members of
which exceeds 500, may specify in the articles of association
that the meeting of persons authorised by members have all the
rights of a general meeting of members specified in the laws
regulating the activities of co-operative societies.
(4) A savings and loan association may provide for in the
articles of association that members of the board of directors,
the credit committee and the audit commission carry out work
without remuneration.
[4 December 2008; 24 May 2012]
Section 23. Accounting and Annual Report of a
Savings and Loan Association
(1) Accounting of a savings and loan association shall be
arranged according to the provisions of the Commission regarding
preparation of annual accounts.
(2) The annual account of a savings and loan association shall
be prepared in accordance with the provisions of the Commission.
The board of directors shall be responsible for the preparation
of the annual report, and the audit commission of the savings and
loan association shall examine it prior to the general meeting
(meeting of authorised persons), in which the report is to be
approved. For a savings and loan association, assets of which at
the end of the accounting year exceed 100 000 lats, the annual
report shall be examined by a sworn auditor or a commercial
company of sworn auditors.
(21) A savings and loan association, the annual
report of which is examined by a sworn auditor or a commercial
company of sworn auditors, shall submit to the Commission a copy
of the report of the sworn auditor or the commercial company of
sworn auditors addressed to the management of the savings and
loan association within 10 days after approval of the annual
report, but not later than three months after the end of the
reporting year.
(3) [22 May 2008]
(31) A savings and loan association shall, not
later than within 10 days after approval of the annual report and
not later than three months after the end of the reporting year,
submit a copy of the annual report and the report of the sworn
auditor, if any, to the State Revenue Service together with an
extract from the minutes of the general meeting (meeting of
authorised persons) regarding approval of the annual report. The
savings and loan association shall submit the referred to
documents in printed form or in electronic form.
(32) The State Revenue Service shall, not later
than within five working days, hand over the documents referred
to in Paragraph 3.1 of this Section, if they have been
submitted in electronic form, or electronic copies of such
documents, if they have been submitted in printed form to the
Enterprise Register in electronic form. The Enterprise Register
shall ensure public access to the documents received. The
procedures for handing over and certification of electronic
documents shall be determined by an interdepartamental agreement
entered into by the State Revenue Service and the Enterprise
Register.
(33) The Enterprise Register shall, not later than
within five working days after receipt of the documents referred
to in Paragraph 3.2 of this Section, publish a
notification in the newspaper Latvijas Vēstnesis [the
official Gazette of the Government of Latvia] that the
information referred to in Paragraph 3.1 of this
Section is available at the Enterprise Register.
(4) Each member of a savings and loan association has the
right to become acquainted with a complete annual report and
receive an extract thereof for a fee not exceeding the expenses
for the copying of the report.
[21 June 2007; 22 May 2008; 23
September 2010; 24 May 2012]
Chapter
VI
Supervision of Activities of a Savings and Loan Association
Section 24. Organisation of Supervision of
Activities of a Savings and Loan Association
(1) In order to ensure safe operation, stability and
development of savings and loan associations, the supervision of
savings and loan associations shall be carried out by the
Commission in accordance with this Law and other regulatory
enactments.
(2) An administrative act of the Financial and Capital Market
Commission, issued in accordance with this Law, may be appealed
to the Administrative District Court. The Court shall examine the
case as the court of first instance. The case shall be examined
in the composition of three judges. A judgment of the
Administrative District Court may be appealed by submitting a
cassation complaint.
[4 December 2008 / Paragraph two
shall come into force from 1 January 2009 (see Transitional
Provisions)]
Section 25. Application of Intensified
Supervision
[4 December 2008]
Section 26. Rights of Authorised Persons of the
Commission during Supervision Process
An authorised person of the Commission has the right to become
acquainted with all documents, assets and liabilities of a
savings and loan association and to receive explanations from the
responsible persons of the savings and loan association.
Section 27. Duties of a Savings and Loan Association
in the Development and Operation of an Efficient Internal Control
System
A savings and loan association shall create an efficient
internal control system in order to ensure the risk management of
the association and active protection thereof, the veracity and
timeliness of the information provided to the government, the
compliance with the laws, regulatory provisions and orders of the
Commission, as well as the policy and procedure of the savings
and loan association.
Section 27.1 Participation in the Credit
Register
The participation of a savings and loan association in the
Credit Register shall be determined by the Law On the Credit
Register.
[24 May 2012 / The new wording of
the text of Section shall come into force from 1 December 2012
(see Paragraph 10 of Transitional Provisions)]
Chapter
VII
Termination of Activities of a Savings and Loan Association
Section 28. Grounds for Termination of Activities of
a Savings and Loan Association
Activities of a savings and loan association may be terminated
in accordance with:
1) a decision of the general meeting (meeting of authorised
persons) of the savings and loan association;
2) a court adjudication.
Section 29. Termination of Activities of a Savings
and Loan Association and Reorganisation of the Association in
Accordance with a Decision of the General Meeting (Meeting of
Authorised Persons)
(1) The general meeting (meeting of authorised persons) of a
savings and loan association is entitled to take a decision on
termination of activities of the association only after the
savings and loan association has fulfilled all the liabilities
recorded in the accounting registers thereof in relation to
creditors.
(2) The general meeting (meeting of authorised persons) of a
savings and loan association shall have to take a decision on
termination of activities in the following cases:
1) if the number of members of the savings and loan
association has reduced below 20;
2) if the legal subject, legal relationship with which
determined the aggregate of the members of the relevant savings
and loan association, ceases to exist;
3) if the savings and loan association has been acquired by
another association;
4) if the savings and loan association has been merged with
another association or other such associations and result in the
founding of a new savings and loan association.
(3) If the equity capital of a savings and loan association
reduces and becomes smaller than the minimum amount specified in
the articles of association, the board of directors shall, within
two months, convene the general meeting (meeting of authorised
persons) of members, which shall decide on increasing of the
equity capital of the association up to the minimum equity
capital specified in the articles of association or on
liquidation of the savings and loan association.
(4) Also other cases of terminating the activities of a
savings and loan association may be specified in the articles of
association thereof.
(5) If the own funds of a savings and loan association reduce
and become smaller than the 2000 lats, the board of directors
shall, within one month, convene the general meeting (meeting of
authorised persons) of members, which shall decide on increasing
of the own funds of the association up 2000 lats or on
liquidation of the savings and loan association.
Section 30. Procedures for Liquidation of a Savings
and Loan Association on the Basis of the Decision of the General
Meeting (Meeting of Authorised Persons)
(1) The procedures for liquidation of a savings and loan
association specified in this Section shall be applicable in
cases when the activities of the savings and loan association are
terminated and the savings and loan association is liquidated in
the cases referred to in Section 29 of this Law.
(2) The general meeting (meeting of authorised persons) of a
savings and loan association shall appoint a liquidator. The
liquidator shall act and be responsible in accordance with the
provisions regarding members of the board of directors. The
liquidator of a savings and loan association may also be a legal
person. Activities of the savings and loan association during
liquidation process, as well as activities of the liquidator
shall be subject to the supervision of the Commission.
(3) In a savings and loan association, assets of which at the
end of the accounting year exceed 50 000 lats, the liquidator may
be replaced with a liquidation commission elected by the general
meeting (meeting of authorised persons).
(4) The liquidator shall notify the decision on commencement
of liquidation of a savings and loan association in the newspaper
Latvijas Vēstnesis and in the newspaper, which according
to the place of distribution and number of copies thereof
includes as large number of members of the savings and loan
association as possible. Creditors shall apply their claims
against the savings and loan association to the liquidator of the
association within 90 days from the day when the notification was
published. The creditor shall append all documents justifying its
claim to the application thereof.
(5) The liquidator shall take a decision on recognition of the
claim of the creditor and send to the creditor according to the
address indicated thereby not more than within 30 days after
expiry of the term announced for application of creditors. The
liquidator shall notify the decision thereof to the creditor in a
registered letter. The creditor may appeal a decision of the
liquidator on non-recognition or partial recognition of the claim
to a court within 30 days from the day when the registered letter
was sent.
(6) The liquidator shall receive and recover that due to the
savings and loan association, sell the property of the
association and satisfy the claims against the savings and loan
association in accordance with the procedures specified by law,
prepare a report on liquidation, announce the termination of the
liquidation and notify the Enterprise Register of the Republic of
Latvia thereof.
(7) Claims of creditors, which have been recognised by a court
adjudication (judgment) that has entered into effect and the
recovery commenced according to which against a savings and loan
association has not been completed, as well as claims, which at
the time of appointing a liquidator, are still in legal
proceedings, shall be satisfied according to general procedures
of liquidation.
(8) The remuneration of the liquidator, the liquidation
expenditure, as well as the expenditure of the savings and loan
association to be liquidated shall be approved by the general
meeting (meeting of authorised persons).
(9) The order of satisfying the claims applied by creditors
and recognised, in case of liquidation of a savings and loan
association, shall be as follows:
1) claims of the Deposit Guarantee Fund;
2) tax and duty claims;
3) claims of work remuneration of such paid employers who are
not members of the savings and loan association;
4) claims of such creditors and employees who are not members
of the association;
5) claims of deposits, except claims of members of the board
of directors, the audit commission and the credit commission;
6) claims of other members of the association who are not
members of the board of directors, the audit commission or the
credit committee;
7) claims of members of the board of directors, the audit
commission and the credit committee.
(10) Complaints regarding activities of a liquidator shall be
examined and decisions on his or her appointing and holding
liable shall be taken by the general meeting (meeting of
authorised persons).
Chapter
VIII
Liability for Violations of Regulatory Enactments
[4 December 2008]
Section 31. Restriction of Activities of a Savings
and Loan Association
(1) If the Commission detects that a savings and loan
association does not comply with the requirements of this Law,
the legal acts issued by the Commission or the directly
applicable regulatory enactments issued by institutions of the
European Union, or concludes that the strategy, procedures and
measures of a savings and loan association do not ensure
sufficient risk management, it shall request that the savings and
loan association carries out the necessary measures for the
prevention of such situation without delay.
(2) In addition to that specified in Paragraph one of this
Section the Commission is entitled to carry out one or several of
the following measures:
1) to warn a savings and loan association;
2) to partially or completely suspend the provision of
financial services of a savings and loan association;
3) to issue orders in writing, which are addressed to the
supervisory bodies and executive bodies of a savings and loan
association, as well as to managers and members of such bodies
and which are necessary in order to restrict or discontinue the
activities of the savings and loan association, which endanger or
may endanger the stability, solvency or reputation of such
savings and loan association;
4) to impose the fines provided for in this Law.
(3) Appealing of an administrative act issued by the
Commission in relation to the issues referred to in this Section
shall not suspend the execution thereof.
Section 32. Amount of a Fine
(1) [1 December 2012]
(2) The Commission is entitled to impose a savings and loan
association a fine up to 5000 lats for activities, as a result of
which the requirements of this Law or of the regulatory
enactments issued in accordance thereby, or of directly
applicable regulatory enactments issued by institutions of the
European Union have been violated.
(3) The fines referred to in this Law shall transferred into
the State budget.
[24 May 2012 / Amendments regarding
deletion of Paragraph one and amendments to Paragraph two shall
come into force from 1 December 2012 (see Paragraph 10 of
Transitional Provision)]
Transitional
Provisions
1. Section 13, Clause 7 and Section 30, Paragraph nine, Clause
1 of this Law shall come into force concurrently with the
relevant amendments to the Law On Deposit Guarantees of Natural
Persons.
2. Until the time when the regulatory provisions and orders of
the Commission come into force, the norms of the Bank of Latvia
shall be binding on savings and loan associations.
3. Until the day of the coming into force of a law on
occupational activity, the term "occupational activity" used in
this Law shall mean "individual work".
4. The special authorisations (licences) issued to savings and
loan associations for the operation of a credit institution,
which have been issued on the basis of regulatory enactments that
were in force until the day of coming into force of this Law,
shall be recognised as valid.
5. The Cabinet shall, by 1 September 2001, submit amendments
to the Saeima to the Credit Institution Law, to the Law on
the Financial and Capital Market Commission, tax laws and other
laws related to the coming into force of this Law.
[20 November 2003]
6. Section 27.1 of this Law shall come into force
on 1 January 2008.
[21 June 2007]
7. Amendments to Section 23 of this Law shall be applicable to
reports, which have been submitted to the State Revenue Service
on 1 July 2008 or later.
[22 May 2008]
8. Until the legal regulation of agricultural farms and fish
farms according to the Law On Agricultural Farms and Fish Farms,
an agricultural farm or a fish farm may be one member of the
savings and loan association without the right to vote, if the
member of the savings and loan associations owns 100 per cent
shares of the relevant farm.
[4 December 2008]
9. Amendments to Section 24 of this Law regarding
supplementation thereof with Paragraph two (in relation to
appealing of an administrative act in the Administrative District
Court) shall come into force on 1 January 2009. If an application
regarding an administrative act of the Financial and Market
Capital Commission has been submitted to the Administrative
District Court by 1 January 2009, a decision on the application
submitted shall be taken, as well as the administrative case
initiated shall be examined and a court adjudication in this case
shall be rendered and appealed in accordance with the provisions
of the Administrative Procedure Law.
[4 December 2008]
10. Amendments to Sections 27.1 and 32 of this Law,
as well as amendment in relation to deletion of the informative
reference to the European Union directive shall come into force
from 1 January 2012.
[24 May 2012]
Informative
Reference to the European Union Directive
[24 May 2012 (see Paragraph 10 of Transitional
Provisions)]
This Law shall come into force on 1 January 2002.
The Saeima adopted this Law on 29 March 2001.
President V. Vīķe-Freiberga
Riga, 18 April 2001
1 The Parliament of the Republic of
Latvia
Translation © 2013 Valsts valodas centrs (State
Language Centre)