6-446

6-446. Other investments and powers

A. An association may invest funds as follows:

1. In an account of any state or federal association, the accounts of which are
insured by an insurance corporation.

2. In obligations of or fully guaranteed by the United States, in stock or
obligations of federal home loan banks or in stocks or obligations of the federal
national mortgage association or other agencies of the United States approved by rule of
the superintendent.

3. In any of the following where the aggregate amount invested in all such
investments does not exceed twenty per cent of the association's total assets:

(a) Bonds or other direct obligations of or guaranteed as to principal and interest
by this state.

(b) Obligations which by the laws of this state are made legal investments for
savings and loan associations.

(c) Bonds or other evidences of indebtedness which are direct general obligations
of any county, incorporated city or town, school district, improvement district or other
political subdivision or municipal corporation of this state and, subject to such rules
as the superintendent may adopt, readily marketable corporate debt securities of the type
commonly regarded as investment securities which were publicly distributed when issued
and which are publicly traded at the time of acquisition by the association and loans or
securities which meet standards of sound lending practices.

4. In certificates of deposit issued by any bank which is a member of the federal
deposit insurance corporation provided that the purchase or renewal of certificates
issued by banks which do not have their principal offices in this state are governed by
such rules as the superintendent may prescribe.

5. In accordance with the provisions of this paragraph and any rules of the
superintendent, any Arizona association may invest in the capital stock, obligations or
other securities of any service corporation, under whatever laws organized, if the entire
corporate stock of such service corporation is available for purchase only by savings and
loan associations of this state and federal savings and loan associations having their
home office in this state, but no association may make any investment under this section
if its aggregate outstanding investment under this section, determined as prescribed by
the rules of the superintendent, would thereupon exceed six per cent of its assets and
provided that any investment in excess of five per cent of its assets serves primarily
community, inner-city or community development purposes. The superintendent shall
prescribe rules under this authority to effectuate the intent of section 6-402,
subsection B. If a service corporation engages in an activity which is not permissible
under this section for a service corporation in which an association may invest, an
association having an investment in such service corporation shall dispose of such
investment promptly unless, within ninety days following notice to such association, the
impermissible activity is discontinued. The service corporation shall file a certified
audit as provided in section 6-477, and the superintendent may examine service
corporations as provided in section 6-476.

6. With or without security, make loans, advance credit and purchase obligations
representing loans and advances of credit for the payment of expenses of community
college, college or university education, but no association may have loans under this
paragraph, exclusive of any loan which is or which at the time of its making was
otherwise authorized, aggregating at any one time more than five per cent of its total
assets. An association making a loan under this paragraph may require a comaker or
comakers, insurance, guaranty under a government student loan guarantee plan or other
protection against contingencies. The borrower shall certify to the association that the
proceeds of the loan are to be used by a full-time student solely for the payment of
expenses of community college, college or university education at an institution which
provides an education program for which it awards a bachelor's degree or provides not
less than a two-year program which is acceptable for full credit toward such a degree.

7. Notwithstanding any other provision of this article, but subject to such
prohibitions, limitations, conditions and restrictions as the superintendent may
prescribe, an association may do any of the following:

(a) Invest in primarily residential real property, including interests in such real
property, located within this state.

(b) Acquire, develop and improve such property or interests in the property for
primarily residential usage.

(c) Hold, sell or otherwise dispose of, lease, improve and operate any such
property or any interest in the property. An association shall not make any investment
under this paragraph if its aggregate outstanding investment would exceed ten per cent of
its assets. As used in this paragraph, "improve" shall include any type of improvement
other than the construction of residential housing.

8. Subject to chapter 1, article 4 of this title, in any class of capital stock of
any bank or savings and loan association, under whatever laws organized, or any
corporation which directly or indirectly acting through one or more persons owns or has
the power to vote twenty-five per cent or more of any class of voting stock of any such
bank or savings and loan association.

9. In an amount not exceeding ten per cent of the association's assets, in any
other investments not prohibited by rules adopted by the superintendent. No investment
made under the authority of this paragraph may be made in a service corporation referred
to in paragraph 5 of this subsection. An investment made under the authority of this
paragraph may be made or continued for the purpose of creating or acquiring, directly or
through any affiliate or subsidiary, any obligation of a purchaser of consumer goods
created in the acquisition of such goods or any monetary obligation of a member of the
association.

B. Notwithstanding any other provision of law, but except as provided in subsection
A, paragraphs 5 and 7 of this section, an association shall have the following powers:

1. To offer and accept savings accounts or other accounts for fixed, minimum or
indefinite periods of time or in the form of demand or transaction accounts including
overdraft privileges incident thereto to any person or entity.

2. To make, invest in or acquire loans or participating interests in loans, secured
or unsecured, of any type and for any purpose to any person or entity.

3. To make, invest in or acquire loans upon the security of any residential or
nonresidential property interest, of any priority, whether fee or leasehold to any person
or entity.

4. To make or acquire loans upon the security of, or invest in, commercial paper,
securities and other corporate debt obligations of any type.

5. To issue debt or equity securities for cash or other consideration.

6. To acquire, invest in or hold real or personal property for rental or sale,
which at the time of such acquisition or investment would not exceed twenty per cent of
an association's assets, and to enter into or create lease financing arrangements with
respect to such property.

7. To act as trustee, executor, administrator, personal representative,
conservator, guardian or custodian, or in any other fiduciary capacity, to offer trust or
fiduciary services incident thereto and to receive reasonable compensation therefor.

C. The association in the exercise of such powers provided herein may do so without
regard to geographic limitations and on terms and provisions in accordance with this
section unless restricted by rules of the superintendent.

D. An association shall not invest in or acquire a loan or a participating interest
in a loan originated or acquired by an affiliate or by a subsidiary of a related holding
company or companies other than a service corporation qualified as provided in this
section. Before making an investment in or acquiring a loan or a participating interest
in a loan the association shall evaluate the creditworthiness of the obligor in the same
manner as though the association were originating the loan. The association shall
document and retain the credit review in the loan file.

E. All of the provisions of this section are subject to section 33-1571.