Law of August 28, 1984 Establishing and Regulating Savings and Housing Banks

LAW OF AUGUST 28, 1984 ESTABLISHING AND REGULATING THE OPERATION OF SAVINGS AND HOUSING BANKS (Moniteur No. 64 of Thursday, September 6, 1984) LAW JEAN CLAUDE DUVALIER PRESIDENT FOR LIFE OF THE REPUBLIC

Having seen Articles 72, 3rd paragraph, 82, 83, 84, 91, 92, 110, 111, 128, 176, 184, 186, 187, 196 of the Constitution. Having seen the provisions of the Commercial Code, Titles III and IV; Having seen the provisions of the Civil Procedure Code; Having seen the law of September 14, 1947 on rents, completed by the provisions of the Decree of January 29, 1959 modifying that of January 26, 195, and the provisions of the Law of July 19, 1961; Having seen the law of August 3, 1955 on the operation of Anonymous Companies, modified by that of June 16, 1975; Having seen the decree of August 28, 1960 on the organization and operation of anonymous companies, modified by the decrees of November 11, 1968, October 10, 1979 and March 8, 1984; Having seen the Law of September 16, 1963 on mixed anonymous companies; Having seen the Decree-Law of November 27, 1969 on the Notariat; Having seen the Law of July 15, 1974 authorizing the creation of housing banks and organizing their operation; Having seen the Decree of September 28, 1977 regulating the Land Conservation and Registration; Having seen the decree of November 29, 1978 relating to stamp duty; Having seen the decree of April 5, 1979 relating to the property tax on built properties; Having seen the law of August 17, 1979 creating and organizing the Bank of the Republic of Haiti (BRH); Having seen the Law of September 5, 1979 on Expropriation for Public Utility. Having seen the decree of November 14, 1980 regulating the operation of Banks and banking activities; Having seen the decree of September 28, 1981 modifying the law of August 7, 1980 relating to the income tax.

Considering that, within the framework of national development policy focused on the constant care to improve the living conditions of urban and rural masses, the Government of the Republic intends to promote and encourage access to land ownership; contribute to the improvement of housing in terms of quality by favoring the construction of buildings with residential character or for commercial and industrial use; That it is appropriate, for this purpose, to encourage the mobilization of national savings for the financing of medium and long-term loans that can be granted by banks specialized in this type of operations. That it is therefore necessary to regulate the operation of such institutions and to modify the Decree of November 14, 1980 authorizing the creation of savings banks.

On the report of the Minister of State in charge of the Economy, Finance and Industry.

PROPOSED
And the Legislative Chamber has voted the following Law.

CHAPTER ONE
ATTRIBUTIONS OF SAVINGS AND HOUSING BANKS

ARTICLE 1.- Within the framework of laws and regulations relating to the operation of banks and
financial institutions in Haiti, Savings and Housing Banks (BEL) will be created which will be governed by the provisions of this law. The Savings Banks whose creation is authorized by the Decree of November 14, 1980 will have the status of SAVINGS AND HOUSING BANKS (BEL) governed by the laws and regulations relating to the operation of banks and financial institutions and by the provisions of this Law.

ARTICLE 2.- Article 8 of the Decree of November 14, 1980 is hereby modified:
ARTICLE 8.- All banks whose main activities are the mobilization of private and public savings,
national or foreign, with a view to granting medium and long-term mortgage loans intended to serve the acquisition, construction, or restoration of buildings for residential, commercial, industrial, and social use are considered Savings and Housing Banks. Savings and Housing Banks may carry out all other commercial and banking operations consistent with their main attributions, as well as all operations and investments likely to favor the satisfaction of housing needs. They may also encourage, by appropriate means, any initiative of the private sector likely to directly or indirectly improve the situation of housing and to develop the national economic capacities of the construction sector; for this purpose, formulate any proposal to the Competent State Bodies.

CHAPTER TWO
CONSTITUTION AND ORGANIZATION OF SAVINGS AND HOUSING BANKS

ARTICLE 3.- Savings and Housing Banks (BEL) are mandatory Haitian anonymous companies, subject to the laws
governing said companies. They may also be constituted as mixed anonymous companies. Their name shall always include the mention “Savings and Housing Banks”, the amount of share capital and the acronym S.A. or S.A.M. By derogation from the Decree of August 28, 1960 and the Law of September 16, 1963 on mixed anonymous companies, the adoption of the mixed anonymous company regime for Savings and Housing Banks shall be optional in cases of participation in the capital of said Companies by the State, its Agencies, Bodies, and any other entity in which the State is a majority participant. The choice of mixed or private regime shall be decided by the Constituent Assembly. In the case of choosing the private regime, the legal provisions in force on mixed anonymous companies shall not apply.

ARTICLE 4.- The third paragraph of Article 33 of the Decree of November 14, 1980 is hereby
modified:

The capital of Savings and Housing Banks (BEL) shall be two million five hundred thousand gourdes (Gdes 2,500,000.00). This capital shall be increased whenever the on-balance sheet commitments and off-balance sheet commitments exceed fifty million gourdes at the end of two consecutive fiscal years. In such cases, the share capital shall represent at least 5% of the total amount of on-balance sheet and off-balance sheet commitments.

ARTICLE 5.- The minimum share capital of BELs shall be fully paid up by effective payment
made at the diligence of the founders, to the Bank of the Republic of Haiti in a special account named “Savings and Housing Bank in formation”. This against the issuance of a certificate. These funds shall be released immediately upon the definitive constitution of the B.E.L under the conditions provided by law.

ARTICLE 6.- When the share capital exceeds the required minimum, there shall be calls for funds for the
difference, this in one or several installments according to the decision of the Board of Directors. The shares subscribed under these conditions shall be paid up within the maximum delays set out below, half at subscription and the balance half within a period of 12 months from the previous payment, the other half to be paid up within the following twelve months at the latest. Upon expiration of the above deadlines. The company may recover the amount due on the subscribed shares and late interest at the fixed rate, all by all legal means. Upon decision of the Board of Directors, the rights resulting from shares subscribed and not paid up within the deadlines set in this article, may be cancelled fifteen (15) days after an unsuccessful formal notice.

ARTICLE 7.- Unpaid shares are mandatory registered shares. Three-quarters of the
totality of registered shares, even after payment, one-quarter may become bearer shares.

ARTICLE 8.- A shareholder cannot own more than one-fifth of the Registered Shares.

ARTICLE 9.- Savings and Housing Banks may not acquire their own shares except for the purpose of reducing share capital either in case of losses, or due to a
depreciation of assets.

ARTICLE 10.- Any administrator of a Savings and Housing Bank who is also a member of the Board of Directors or employee of another bank of the same
nature having its registered office in the same municipality shall be automatically removed from office. Any member of the Board of Directors of a Savings and Housing Bank who simultaneously holds a public office shall likewise be automatically removed from office as administrator, with the exception of representatives designated by the State in cases where the State is a shareholder.

CHAPTER THREE
FINANCIAL OPERATIONS OF SAVINGS AND HOUSING BANKS

ARTICLE 11.- The operations of Savings and Housing Banks shall conform to
banking standards and practices. Savings and Housing Banks shall comply with financial ratios established by the Bank of the Republic of Haiti.

system allowing the collection of savings, remunerated or not, public or private, national or foreign. They may not accept current account deposits unless their paid-up share capital is five million gourdes.

ARTICLE 13.- Savings and Housing Banks, for their operations, use
current account deposits, savings account deposits, term deposits, savings-housing deposits, gifts or loans received, the proceeds from the issuance of bonds or other medium and long-term financial instruments, as well as the proceeds from the sale of mortgages. Savings and Housing Banks may also, for their operations, dispose of other revenues from routine banking services or transactions executed on behalf of third parties or for their own account.

ARTICLE 14.- To ensure liquidity and the proper management of their portfolios and their
commitments to third parties, Savings and Housing Banks are authorized to carry out with financial institutions operating in Haiti and all other natural and legal persons, the following operations: purchase and sale of mortgages; short-term placement of treasury bills.

ARTICLE 15.- The purchase and sale of mortgages by Savings and Housing
Banks for the benefit of natural and legal persons other than financial institutions is prohibited.

ARTICLE 16.- Savings and Housing Banks are authorized to carry out the
operations indicated in Article 14 above with financial institutions not operating in Haiti. In this case, they must obtain prior approval from the Bank of the Republic of Haiti.

ARTICLE 17.- Savings and Housing Banks may present to the rediscount of the BRH any effect at
medium or long term guaranteed or not by a mortgage or pledge.
In case of rediscount, the credit will continue to be managed by the Savings and Housing Banks, without any transfer of rights. The rates and conditions of rediscount will be harmonized with those of the credits granted by the Savings and Housing Banks and the other concerned financial institutions.

ARTICLE 18.- Savings and Housing Banks must allocate at least 70% of
their credit portfolio to mortgage loans.
Savings and Housing Banks may, in addition, carry out all other credit operations up to thirty percent (30%) of their portfolio. However, at least 50% of the global portfolio shall be dedicated to mortgage loans intended for the acquisition, construction, or restoration of residential buildings.

ARTICLE 19.- The global portfolio of Savings and Housing Banks in
the proportion of sixty percent (60%) shall be allocated to long-term loans, unless derogation previously authorized by the Bank of the Republic of Haiti.

ARTICLE 20.- Savings and Housing Banks may grant short, medium, and long-term loans. The duration of short-term loans is less than twelve months; that of medium-term loans is between twelve (12) and sixty (60) months; that of long-term loans is greater than sixty. The maximum duration of long-term loans is fixed by agreement between the
parties.

ARTICLE 21.- Any credit shall be the subject of a contract specifying the conditions of grant and
repayment. The preliminaries of the attribution of the credit as well as the execution of the credit shall be recorded by one or more supporting documents to be kept in the credit file.

of one or more operations shall not exceed ten percent (10%) of the total assets of a Savings and Housing Bank.

ARTICLE 23.- Any person, company, or organization eligible for a loan or credit advance must provide the necessary guarantees in the form of pledge, lien, or
mortgage, along with an insurance policy on the goods and persons.

ARTICLE 24.- Savings and Housing Banks may, with the approval of the
Bank of the Republic of Haiti, grant mortgage loans to third parties who are not their employees for amounts exceeding 80% of the value of the offered guarantee.

ARTICLE 25.- The administrator of a Savings and Housing Bank may not have
direct or indirect interests in a loan, investment, or any operation carried out by such a bank unless with explicit authorization from the Board of Directors obtained in the form of a resolution approved under the quorum conditions by the vote of at least two-thirds of the administrators present without the participation of the interested administrator.

CHAPTER FOUR
PARTICULAR ADVANTAGES

ARTICLE 26.- Mortgage loans granted by Savings and Housing Banks
shall be subject to variable conventional interest rates at the discretion of the parties within the maximum limits established by the Bank of the Republic of Haiti. The deed recording the modification of the interest rate shall be taxed at a fee of fifty gourdes.

ARTICLE 27.- Savings and Housing Banks may obtain, with the agreement of the
employer of the client, delegations granted by the client on his salaries, indemnities, or wages authorizing the employer to make payments due to the creditor Bank at the agreed times.

ARTICLE 28.- Savings and Housing Banks, during their operations and
for the first ten (10) years of their operation, shall be exempt from the payment of all duties, taxes, and levies to the State or Municipalities, with the exception of import duties and the TCA. They shall be particularly exempt from:
1) Income tax on operating profits
2) Income tax on dividends
3) The patent tax
4) License fees
5) Registration and transcription fees;
6) Operating fees
7) Stamp duty, including proportional stamp duty on shares and bonds
8) Property tax on built properties
9) Tax on shares
10) Any tax or levy on gifts received.

ARTICLE 29.- The contributions paid by shareholders and bondholders shall be deductible from the
taxable amount of the income of said shareholders for five consecutive years from the date of payment. If the amount of contributions exceeds the taxable amount of the income of the shareholder or bondholder for the first year, the difference shall be applied to the income of the second year and so on until complete exhaustion of the amount of said contributions.

on income applied to dividends for a period of ten (10) years. The redemption of shares issued by Savings and Housing Banks is also exempt.

ARTICLE 30.- Savings and Housing Banks will obtain from the Bank of the
Republic of Haiti preferential rates of mandatory reserves on deposits, which rates may be 50% lower than those required of Commercial Banks; interest rates on deposits and loans different from those fixed by circular for commercial banks; terms and amounts of deposit opening different from those fixed for commercial banks.

ARTICLE 31.- Exempt from income tax: the interest from mortgage bonds and other financial instruments acquired from BELs pursuant to Articles 14 and 16 of this law; capital gains resulting from the sale and redemption of the aforementioned bonds, mortgages, and other financial instruments.

ARTICLE 32.- The rights of Savings and Housing Banks shall be safeguarded in case
of expropriation for Public Utility affecting assets received as collateral. The compensation due shall be paid directly and in priority to the creditor Bank, up to the amount due.

ARTICLE 33.- The duties collected on deeds or dispositions of acts related to real estate operations financed in whole or in part by Savings and Housing Banks shall be calculated according to the following schedule:
1) Real estate property transfers: the proportional registration duty is half of one percent (0.50%) of the transmission value. The transcription duty is two per thousand (0.20%) of the transmission value.
The proportional stamp duty is one per thousand (0.10%) of the transmission value.
2) Mortgage assignments
The proportional registration duty is half of one percent (0.50%) calculated only on the amount of the principal obligation. The proportional stamp duty is one per thousand (0.10%) of the amount of the principal obligation.
3) Registration and renewal of mortgage registration:
The proportional duty is a quarter of one percent (0.20%) of the capital of each claim.
4) Cancellation of mortgage
The proportional duty shall not apply and shall be replaced by a fixed duty of $20.00 or 100 gourdes per cancellation.

ARTICLE 34.- To benefit from the particular advantages recognized by this law, the clients of BELs must submit a certificate establishing the origin, allocation, and amount of the funds obtained.

ARTICLE 35.- Interest on mortgage loans for the construction, acquisition, or restoration of buildings for residential use shall be deductible from the income tax paid by the beneficiaries of said loans, this in the proportion of 100 percent if it concerns the financing of the beneficiary's primary residence.

ARTICLE 36.- By derogation from Article 54 of the Decree of November 27, 1969 on the notariat, the tariff established for the remuneration of notaries shall not apply to operations financed in whole or in part by BELs unless otherwise agreed.

ARTICLE 37.- All new residential constructions financed in whole or in part by a BEL will benefit from a tax reduction of the Property Tax on Built Properties in the following order. Eighty-five percent (85%) for the first two years.

fourth year. The tax is due in full starting from the fifth year.

ARTICLE 38.- The law of September 14, 1947 on rent increases, the Decree of January 29, 1959 on the reduction of the cost of rents, the law of July 19, 1961 also on the reduction of the cost of rents shall not apply to buildings whose construction, restoration, and/or acquisition will be financed by BELs. The restorations covered by this Article are those whose amount represents 1/3 of the market value of the building as established by appraisal, to which an expert designated by the concerned BEL may participate.

ARTICLE 39.- Actions for recovery of any claim pursuant to a loan contract to which BELs are parties shall be heard and judged summarily by the competent jurisdiction. Summons or citations shall be given on a fixed date. However, there shall be between the date of the citation or summons and the date indicated for appearance a period of one (1) clear day in addition to the period of distance. The communication of documents, if any, shall be made at the bar, and the defendant must produce all his means of defense at the hearing. The Public Ministry, if applicable, must also conclude immediately. The case will be heard and judged without adjournment or turn of the roll. The judgment will be pronounced within eight days of the deadline of the summons or citation under penalty of action against the judge. The decision of the Tribunal, even if the defendant is neither present nor represented, shall be deemed contradictory if the defaulting debtor does not manifest himself within three (3) clear days after the service thereof. It shall furthermore be enforceable by provision notwithstanding opposition, appeal, defense of execution, or power of cassation.

ARTICLE 40.- The debtor, for any legal action against a BEL relating to his obligation even when it concerns a counterclaim or claims introduced before the judge of Summary Proceedings on the occasion of the execution of the summary procedure, shall be required to provide a bond deposited with the clerk of the Tribunal under penalty of inadmissibility of the claim. The amount of the bond shall be equivalent to the amount of the debtor's claim. Incidental legal actions to the summary procedure shall not be suspensive.

ARTICLE 41.- This law repeals all laws or provisions of laws, all decrees or provisions of decrees, and all decree-laws or all provisions of decree-laws that are contrary to it, notably the law of July 15, 1974 on the Housing Bank, and shall be executed at the diligence of the Ministries of Economy, Finance and Industry, Social Affairs, Commerce and Justice, each insofar as it concerns them.

Done at the Legislative Chamber in Port-au-Prince, on July 4, 1984, Year 181 of Independence.
The President Jaurès LEVEQUE
The First Secretary: Jean SASSINE
The Second Secretary: Arnold FENESTOR