Mutual Association

savings and loan association organized as a cooperative owned by its members. Members’ deposits represent shares; shareholders vote on association affairs and receive income in the form of dividends. Unlike state-chartered corporate S&Ls, which account for a minority of the industry, mutual associations are not permitted to issue stock, and they are usually chartered by the office of thrift supervision (OTS) and belong to the Deposit Insurance Fund (DIF). Deposits are technically subject to a waiting period before withdrawal, although in practice withdrawals are usually allowed on demand.
See also demutualization.

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Nonstock financial institutions, such as a Savings and Loan Association, that is owned by savers holding claim to funds on deposit, who are known as members. Members have no claim to the earnings of the association, but elect directors to its board of trustees. Other forms of mutual associations are credit unions, mutual savings banks, and cooperative banks.