§412:6-306  Permitted investments.  (a) To the extent specified herein, a savings bank may invest its own assets in:

(1)  Securities and obligations of the United Statesgovernment and any agency of the United States government whose debtobligations are fully and explicitly guaranteed as to the timely payment ofprincipal and interest by the full faith and credit of the United States,including without limitation Federal Reserve Banks, the Government NationalMortgage Association, the Veterans Administration, the Federal HousingAdministration, the United States Department of Agriculture, the Export-ImportBank, the Overseas Private Investment Corporation, the Commodity CreditCorporation, and the Small Business Administration;

(2)  Bonds, notes, mortgage backed securities, andother debt obligations of the Federal Home Loan Mortgage Corporation, theFederal National Mortgage Association, and the Federal Home Loan Banks;

(3)  Securities and obligations of United Statesgovernment-sponsored agencies which are originally established or chartered bythe United States government to serve public purposes specified by the Congressbut whose debt obligations are not explicitly guaranteed by the full faith andcredit of the United States, including without limitation Banks forCooperatives, Federal Agricultural Mortgage Corporation, Federal Farm CreditBanks, Federal Intermediate Credit Banks, Federal Land Banks, FinancingCorporation, Resolution Funding Corporation, Student Loan MarketingAssociation, Tennessee Valley Authority, the United States Postal Service, andsecurities and obligations of the Federal Home Loan Mortgage Corporation, theFederal National Mortgage Association, and the Federal Home Loan Banks that arenot bonds, notes, mortgage backed securities, or other debt obligations of theFederal Home Loan Mortgage Corporation, the Federal National MortgageAssociation, and the Federal Home Loan Banks; provided that the total amountinvested in obligations of any one issuer shall not exceed twenty per cent ofthe bank's capital and surplus; and

(4)  Securities and obligations of quasi-United Statesgovernmental institutions, including without limitation the International Bankfor Reconstruction and Development (World Bank), the Inter-American DevelopmentBank, the Asian Development Bank, the African Development Bank, the EuropeanInvestment Bank, and other multilateral lending institutions or regionaldevelopment institutions in which the United States government is a shareholderor contributing member; provided that the total amount invested in obligationsof any one issuer shall not exceed twenty per cent of the bank's capital andsurplus.

(b)  A savings bank may invest its own assetsin bonds, securities, or similar obligations issued by this State or any countyof this State, through an appropriate agency or instrumentality.

(c)  To the extent specified herein, a savingsbank may invest its own assets in bonds or similar obligations issued by anystate of the United States other than this State, the District of Columbia, orany territory or possession of the United States, by municipal governments ofsuch states, territories or possessions or by any foreign country or politicalsubdivision of such country; provided, that:

(1)  The bond, note, or warrant has been issued incompliance with the constitution and laws of any such government;

(2)  There has been no default in payment of eitherprincipal or interest on any of the general obligations of such government fora period of five years immediately preceding the date of the investment; and

(3)  The total amount invested in such obligations ofany one issuer by a savings bank shall not exceed twenty per cent of thesavings bank's capital and surplus.

(d)  To the extent specified herein, a savingsbank may invest its own assets in notes, bonds, and other obligations of anycorporation which at the time of the investment is incorporated under the lawsof the United States or any state or territory thereof or the District ofColumbia; provided, that the aggregate amount invested by a savings bank underthis subsection and subsection (e) in any one corporation shall not exceedtwenty per cent of the savings bank's capital and surplus.

(e)  To the extent specified herein, a savingsbank may invest its own assets in securities of an investment grade.  The term"investment grade" means notes, bonds, certificates of interest orparticipation, beneficial interest, mortgage or receivable-related securities,and other obligations that are commonly understood to be of investment gradequality, including without limitation those securities that are rated withinthe four highest grades by any nationally-recognized rating service or unratedsecurities of similar quality as reasonably determined by the savings bank inits prudent judgment, which may be based in part upon estimates which itbelieves to be reliable.  Investment grade does not include investments whichare predominantly speculative in nature.  The aggregate amount invested by asavings bank under this subsection and subsection (d) in any one company orother issuer shall not exceed twenty per cent of the savings bank's capital andsurplus.

(f)  To the extent specified herein, a savingsbank may purchase, hold, convey, sell or lease real or personal property as follows:

(1)  The real property in or on which the business ofthe savings bank is carried on, including its offices, other space in the sameproperty to rent as a source of income; permanent or vacation residences orrecreational facilities for its officers and employees; other real propertynecessary to the accommodation of the savings bank's business, including butnot limited to parking facilities, data processing centers, and real propertyheld for future use where the savings bank in good faith expects to utilize theproperty as its premises; provided, if the savings bank ceases to use any realproperty and improvements thereon for one of the foregoing purposes, it shall,within five years thereafter, sell the real property or cease to carry it orthem as an asset; provided further, such property shall not, without theapproval of the commissioner, exceed seventy-five per cent of the savingsbank's capital and surplus;

(2)  Personal property used in or necessary to theaccommodation of the savings bank's business, including but not limited tofurniture, fixtures, equipment, vaults and safety deposit boxes.  The savingsbank's investment in furniture and fixtures shall not, without the approval ofthe commissioner, exceed twenty-five per cent of the savings bank's capital andsurplus;

(3)  Personal and real property which the savings bankacquires for the purpose of leasing to its subsidiaries and affiliates;

(4)  Such real property or tangible personal propertyas may come into its possession as security for loans or in the collection ofdebts, or as may be purchased by or conveyed to the savings bank insatisfaction of or on account of debts previously contracted in the course ofits business when such property was held as security by the savings bank; and

(5)  The seller's interest under an agreement of sale,as that term is defined in sections 501-101.5 and 502-85, including withoutlimitation the reversionary interest in the real estate and the right to incomeunder the agreement of sale, with or without recourse to the seller.

Except as otherwise authorized in this sectionany tangible personal property acquired by a savings bank pursuant tosubsection (f)(4) shall be disposed of as soon as practicable and shall notwithout the written consent of the commissioner, be considered a part of theassets of the savings bank after the expiration of two years from the date ofacquisition.

Except as otherwise authorized in this sectionany real property acquired by a savings bank pursuant to subsection (f)(4) shallbe sold or exchanged for other real property by the savings bank within fiveyears after title thereto has vested in it by purchase or otherwise, or withinsuch further time as may be granted by the commissioner.

Any savings bank acquiring any real property inany manner other than provided by this section shall immediately, uponreceiving notice from the commissioner, charge the same to profit and loss, orotherwise remove the same from the assets, and when any loss impairs thecapital and surplus of the savings bank the impairment shall be made good inthe manner provided in this chapter.

(g)  A savings bank may own or control thecapital stock:

(1)  Of operating subsidiaries as set forth in thisarticle;

(2)  Of a corporation organized and existing for theownership of real or personal property used or which the savings bank in goodfaith expects to be used in the savings bank's business;

(3)  Of the Federal National Mortgage Association, theStudent Loan Marketing Association, Federal Home Loan Mortgage Corporation orof any other corporation organized for substantially the same purposes;provided that this subsection shall be deemed to authorize subscription for aswell as purchase of the stock;

(4)  Of small business investment companies operatingunder the Federal Small Business Investment Act of 1958;

(5)  Of service corporations as set forth in thisarticle;

(6)  Of a corporation whose stock is acquired orpurchased to save a loss on a preexisting debt secured by such stock; provided,that the stock shall be sold within twelve months of the date acquired orpurchased, or within such further time as may be granted by the commissioner;and

(7)  Of a captive insurance or association captiveinsurance company incorporated under the laws of the United States, or anystate or territory thereof or the District of Columbia.

(h)  To the extent specified herein, a savingsbank may invest its own assets in limited partnerships, limited liability partnerships, limited liability companies, orcorporations

formed to invest in residential properties that willqualify for the low income housing tax credit under section 42 of the InternalRevenue Code of 1986, as amended, and under chapters 235 and 241; provided thatthe total amount invested by a savings bank under this subsection in any onelimited partnership, limited liabilitypartnership, limited liability company, or corporation shall not,without the prior approval of the commissioner, exceed two per cent of thesavings bank's capital and surplus and the aggregate amount invested under thissubsection shall not, without the prior approval of the commissioner, exceedfive per cent of the savings bank's capital and surplus.  In no case shall theaggregate amount invested by a savings bank under this subsection exceed tenper cent of the savings bank's capital and surplus. [L 1993, c 350, pt of §1;am L 1995, c 48, §2; am L 1997, c 258, §15; am L 2001, c 170, §8; am L 2006, c228, §36; am L 2009, c 107, §3]