Subsection 3: Rules applicable to pledges.

If the institution loses all or part of the pledged item, the borrower is compensated by paying a sum equal to the appraised value of the item. This sum is increased by a fixed indemnity of 25%. The amount of this flat-rate compensation may be increased by a decision of the Guidance and Supervisory Board, if the Director refers the matter to it for this purpose.

If the pledged item deteriorates, the borrower may relinquish it to the institution, subject to payment of compensation determined in accordance with the procedures set out in article D. 514-12. In this case, the item may be sold by auction on behalf of the institution. If the borrower prefers to take the item back as is, he/she will receive compensation equal to the difference between the current replacement value of…

Pledged assets which have not been released or renewed by the end of the term stipulated in the acknowledgements issued to the borrowers, or for which an additional term has not been granted by the Director, shall be sold by public auction on behalf of the institution. The Director shall draw up a list of the pledged assets to be sold. This list shall be made enforceable by an order…

After a period of three months from the date of deposit of the pledged item, any depositor may request the sale of the item at the sales periods set by the institution’s internal regulations, even before the term set on the acknowledgement. The amount of the sale, excluding costs, is paid to the borrowing owner or the holder of the bearer acknowledgement, after deduction of the capital loaned, accrued interest…