§412:7-306  Permitted investments.  (a) To the extent specified herein, a savings and loan association may invest itsown 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 Marketing Association,Tennessee Valley Authority, the United States Postal Service, and securitiesand obligations of the Federal Home Loan Mortgage Corporation, the FederalNational Mortgage Association, and the Federal Home Loan Banks that are notbonds, 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 savings and loan association'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 savings and loanassociation's capital and surplus.

(b)  A savings and loan association may investits own assets in bonds, securities, or similar obligations issued by thisState or any county of this State, through an appropriate agency orinstrumentality.

(c)  To the extent specified herein, a savingsand loan association may invest its own assets in bonds or similar obligationsissued by any state of the United States other than this State, the District ofColumbia, or any territory or possession of the United States, by municipalgovernments of such states, territories or possessions or by any foreign countryor political subdivision 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 and loan association shall not exceed twenty percent of the savings and loan association's capital and surplus.

(d)  To the extent specified herein, a savingsand loan association may invest its own assets in notes, bonds, and otherobligations of any corporation which at the time of the investment isincorporated under the laws of the United States or any state or territorythereof or the District of Columbia; provided, that the aggregate amountinvested by a savings and loan association under this subsection and subsection(e) in any one corporation shall not exceed twenty per cent of the savings andloan association's capital and surplus.

(e)  To the extent specified herein, a savingsand loan association may invest its own assets in securities of an investmentgrade.  The term "investment grade" means notes, bonds, certificatesof interest or participation, beneficial interests, mortgage orreceivable-related securities, and other obligations that are commonlyunderstood to be of investment grade quality, including without limitation thosesecurities that are rated within the four highest grades by anynationally-recognized rating service or unrated securities of similar qualityas reasonably determined by the savings and loan association in its prudentjudgment, which may be based in part upon estimates which it believes to bereliable.  Investment grade does not include investments which arepredominantly speculative in nature.  The aggregate amount invested by asavings and loan association under this subsection and subsection (d) in anyone company or other issuer shall not exceed twenty per cent of the savings andloan association's capital and surplus.

(f)  To the extent specified herein, a savingsand loan association may purchase, hold, convey, sell or lease real or personalproperty as follows:

(1)  The real property in or on which the business ofthe savings and loan association is carried on, including its offices, otherspace in the same property to rent as a source of income; permanent or vacationresidences or recreational facilities for its officers and employees; otherreal property necessary to the accommodation of the savings and loanassociation's business, including but not limited to parking facilities, dataprocessing centers, and real property held for future use where the savings andloan association in good faith expects to utilize the property as its premises;provided, if the savings and loan association ceases to use any real propertyand improvements thereon for one of the foregoing purposes, it shall, withinfive years thereafter, sell the real property or cease to carry it or them asan asset; provided further, such property shall not, without the approval ofthe commissioner, exceed seventy-five per cent of the savings and loanassociation's capital and surplus;

(2)  Personal property used in or necessary to theaccommodation of the savings and loan association's business, including but notlimited to furniture, fixtures, equipment, vaults and safety deposit boxes. The savings and loan association's investment in furniture and fixtures shallnot, without the approval of the commissioner, exceed twenty-five per cent ofthe savings and loan association's capital and surplus;

(3)  Personal and real property which the savings andloan association acquires for the purpose of leasing to its subsidiaries andaffiliates;

(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 and loan associationin satisfaction of or on account of debts previously contracted in the courseof its business when such property was held as security by the savings and loanassociation; 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 and loan associationpursuant to subsection (f)(4) shall be disposed of as soon as practicable andshall not, without the written consent of the commissioner, be considered apart of the assets of the savings and loan association after the expiration oftwo years from the date of acquisition.

Except as otherwise authorized in this sectionany real property acquired by a savings and loan association pursuant tosubsection (f)(4) shall be sold or exchanged for other real property by thesavings and loan association within five years after title thereto has vestedin it by purchase or otherwise, or within such further time as may be grantedby the commissioner.

Any savings and loan association acquiring anyreal property in any manner other than provided by this section shallimmediately, upon receiving notice from the commissioner, charge the same toprofit and loss, or otherwise remove the same from assets, and when any lossimpairs the capital and surplus of the savings and loan association theimpairment shall be made good in the manner provided in this chapter.

(g)  A savings and loan association may own orcontrol the capital 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 and loanassociation in good faith expects to be used in the savings and loanassociation'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 savingsand loan association may invest its own assets in limited partnerships, limited liability partnerships, limitedliability companies, or corporations formed to invest in residentialproperties that will qualify for the low income housing tax credit undersection 42 of the Internal Revenue Code of 1986, as amended, and under chapters235 and 241; provided that the total amount invested by a savings and loanassociation under this subsection in any one limited partnership, limited liability partnership, limitedliability company, or corporation shall not, without the prior approvalof the commissioner, exceed two per cent of the savings and loan association'scapital and surplus and the aggregate amount invested under this subsectionshall not, without the prior approval of the commissioner, exceed five per centof the savings and loan association's capital and surplus.  In no case shallthe aggregate amount invested by a savings and loan association under thissubsection exceed ten per cent of the savings and loan association's capitaland surplus. [L 1993, c 350, pt of §1; am L 1995, c 48, §3; am L 1997, c 258,§16; am L 1998, c 11, §20; am L 2001, c 170, §9; am L 2006, c 228, §40; am L2009, c 107, §4]