17-5501.Powers of association generally.
Every association incorporated pursuant to or operating under the
provisions of this act shall have all the powers enumerated, authorized
and permitted by this act and such other rights, privileges and powers
as may be incidental to or necessary for the accomplishment of the
objects and purposes of the association. Among others, every association
shall have the following powers: (a) To sue and be sued, complain and
defend in any court of law or equity.
(b) To purchase, hold and convey real and personal estate consistent
with its objects and powers; and to mortgage, pledge or lease any real
or personal estate; and to take property by gifts, devise or bequest.
(c) To have a corporate seal, which may be affixed by imprint,
facsimile or otherwise.
(d) To appoint officers, agents and employees as its business shall
require, and allow them suitable compensation.
(e) To adopt and amend bylaws as provided in this act.
(f) To insure its shares or deposits with the federal savings and
loan insurance corporation or with an insurer approved by the state
commissioner of insurance under the provisions of this act for such
purpose, and qualify as a member of a federal home loan bank.
(g) To accept savings and investments as payments on shares or
deposits as provided in this act.
(h) Subject to such prohibitions,
limitations and conditions as the commissioner may by regulation provide,
an association may make loans to members on the security of savings accounts
and loans specifically related to transaction accounts.
(i) Subject to such prohibitions, limitations and conditions as the commissioner
may by regulation prescribe, any such association may make home loans on
the security of liens upon residential real property in an amount which,
when added to the amount unpaid upon prior mortgages, liens or encumbrances,
if any, upon such real estate does not exceed the appraised value thereof.
No such loan shall be made directly or indirectly to a director or officer
except a single loan on a home property.
(j) One
loan may be made to an officer, director or employee,
in addition to a home loan, but no such loan secured by real estate mortgage
shall be made to an officer, director or employee which at the time of
granting such advance shall exceed 5% of the net worth accounts of
such association or $90,000 whichever is the smaller. Any negotiable order
of withdrawal, share or deposit loan or real estate loan made to any
officer, director or employee must be approved by the board of
directors and such approval entered upon the minutes of the meeting
approving same. All such loan restrictions applicable to loans made to
an officer, director or employee of a savings and loan association shall
apply to any and all loans made to any general or limited partnership,
corporation, trust or association if an officer, director or employee of
the savings and loan association is a general or limited partner, or the
owner, member or stockholder of 10% or more of the stock
or other evidence of ownership of the entity shown as obligor on the
loan.
(k) Subject to such prohibitions, limitations and conditions as the commissioner
may by regulation prescribe, an association shall have authority to invest
in the following:
(1) Investments in obligations of or fully guaranteed
as to principal and interest by, the United States;
(2) investments in the
stocks and bonds of a federal home loan bank or in the stock of the federal
national mortgage association;
(3) investments in mortgages, obligations
or other securities which are or ever have been sold by the federal home
loan mortgage corporation pursuant to section 305 or 306 of the federal
home loan mortgage corporation act;
(4) investments in obligations, participations,
securities or other instruments of or issued by or fully guaranteed as to
principal and interest by the federal national mortgage association, the
student loan marketing association or the government national mortgage association,
or any other agency of the United States and an association may issue and
sell securities which are guaranteed pursuant to section 306(g) of the national
housing act;
(5) investments in the time deposits, certificates or
accounts of any bank the deposits of which are
insured by the federal deposit insurance corporation, or in the savings
accounts, certificates or other accounts of any institution the accounts
of which are insured by the federal savings and loan insurance
corporation;
(6) investments in obligations of, or issued by, any
state or any political
subdivision thereof including any agency, corporation or instrumentality
of a state or political subdivision, except that an association may not
invest more than 10% of its capital and surplus in obligations of any one
issuer, exclusive of investments in general obligations of any issuer;
(7) purchase of loans secured by liens on improved real estate which are
insured under provisions of the national housing act, or insured as provided
in the servicemen's readjustment act of 1944 or 38 U.S.C. chapter 37;
(8) loans
made for the repair, equipping, alteration or improvement of any residential
real property, and loans made for the purpose of manufactured home financing;
(9) loans as to which the association has the benefit of insurance under
section 240 of the national housing act, or of a commitment or agreement
therefor;
(10) loans to financial institutions with respect to which the
United States or an agency or instrumentality thereof has any function of
examination or supervision, or to any broker or dealer registered with the
securities and exchange commission, secured by loans, obligations or investments
in which the association has the statutory authority to invest directly;
(11) investments which at the time of making, are assets eligible for inclusion
toward the satisfaction of any liquidity requirement imposed by the federal
home loan bank board, but only to the extent the investment is permitted
to be so included under
regulations of the federal home loan bank board or is otherwise authorized;
(12) investments in shares of stock issued by a corporation authorized to
be created pursuant to title IX of the housing and urban development act
of 1968, and investments in any partnership, limited partnership, or joint
venture formed pursuant to section 907(a) or 907(c) of such act;
(13) loans
as to which the association has the benefit of any guarantee under title
IV of the housing and urban development act of 1968, under part B of the
urban growth and new community development act of 1970, or under section
802 of the housing and community development act of 1974 as in effect on
or after the date of enactment of the depository institutions deregulation
and monetary control act of 1980, or of a commitment of agreement therefor;
(14) investments in, commitments to invest in, loans to, or commitments
to lend to any state housing corporation, provided that such obligations
or loans are secured directly or indirectly through an agent or fiduciary,
by a first lien on improved real estate which is insured under the provisions
of the national housing act and that in
the event of default, the holder of such obligations or loans would have
the right directly or indirectly through an agent or fiduciary, to cause
to be subject to the satisfaction of such obligations or loans the real
estate described in the first lien or the insurance proceeds under the national
housing act;
(15) invest in, redeem or hold shares or certificates
in any open-end management investment company which is registered with the
securities and exchange commission under the investment company act of 1940
and the portfolio of which is restricted by such management company's investment
policy, changeable only if authorized by shareholder vote, solely to any
such investments as an association by law or regulation may, without limitation
as to percentage of assets, invest in, sell, redeem, hold, or otherwise
deal with;
(16)
stock obligations, or other securities of any small business investment
company formed pursuant to section 301(d) of the small business investment
act of 1958, for the purpose of aiding members of the federal home loan
bank system. Such investments shall not exceed an aggregate
investment of 1% of the assets of the association;
(17) in other
securities approved by the commissioner.
(l) Without restriction upon the general powers of the association
to invest in:
(1) Real estate whereon there is or may be erected a
building or buildings for the transaction of the business of the
association, from portions of which, not required for its own use, a
revenue may be derived by rentals or otherwise. An association may
invest in such real estate an amount representing the cost of land and
improvements not exceeding the sum of its net worth accounts. It may, however,
invest in such real estate, a larger sum with
the approval of the commissioner;
(2) real estate purchased at sheriff's
sale or at any other sale, public or private, judicial or otherwise,
upon which the association has a lien or claim, legal or equitable;
(3)
real estate accepted by the association in satisfaction of any debt;
(4)
real estate acquired by the association in exchange for real estate
owned by the association;
(5) real estate acquired by the association in
connection with salvaging the value of property owned by the
association;
(6) title to all real estate shall be taken and held in the
name of the association and such title shall immediately be recorded in
accordance with law.
(m) If and when an association is not a member of a federal home
loan bank, to borrow not more than an aggregate amount equal to 1/4
of its capital on the date of borrowing. If and when an
association is a member of a federal home loan bank, to secure advances
of not more than an aggregate amount equal to its capital. Within an
amount equal to its capital, the association may borrow from sources
other than such federal home loan bank an aggregate amount not in excess
of 25% of its capital. A subsequent reduction of capital
shall not affect in any way outstanding obligations for borrowed money.
All such loans and advances may be secured by property of the
association.
(n) To repurchase and redeem shares in accordance with the
provisions of this act.
(o) To pay a bonus to members in accordance with the provisions of
the bylaws.
(p) If and when an association is a member of a federal home loan
bank, to act as fiscal agent of the United States, and when designated
for that purpose by the secretary of the treasury, it shall perform
under such regulations as such secretary may prescribe, all such
reasonable duties as fiscal agent of the United States as such secretary
may require, and shall have power to act as agent for any other
instrumentality and as agent of the state in accordance with the laws of
this state.
(q) To dissolve, merge or reorganize in the manner provided in this
act.
(r) To sell and assign notes and mortgages without recourse, except
that notes and mortgages may be assigned with recourse to any federal
home loan bank of which the association is a member.
(s) Subject to such
prohibitions, limitations and conditions as the commissioner may prescribe,
the following loans or investments are permitted:
(1) An association may make commercial real estate loans on the security
of liens upon other improved real estate. The resulting aggregate
of such loans shall not exceed an amount equal to 40% of such association's assets;
(2) an association may make secured or unsecured loans for personal, family
or household purposes, including loans reasonably incident to the provision
of such credit, and may invest in, sell or hold commercial paper
and corporate debt securities, as defined and approved by the commissioner.
The resulting aggregate of such loans shall not exceed an amount equal
to 30% of such association's assets;
(3) an association may invest in tangible personal property, including,
without limitation, vehicles, manufactured homes, machinery, equipment or
furniture, for rental or sale. The resulting aggregate of such investments
shall not exceed an amount equal to 10% of such association's assets;
(4) an association may make secured or unsecured loans for commercial,
corporate, business or agriculture purposes. No association may make loans
to one borrower under the authority of this paragraph in excess of the amount
a national bank having identical total capital and surplus could lend such
borrower. The resulting aggregate of such loans made by an association
and by a corporation owned by the association under paragraph (2) of subsection
(z) of this section shall not exceed an amount equal to 5% of such association's
assets prior to January 1, 1984, or 10% of such association's assets thereafter.
(t) Any association may, upon adoption of such a loan plan by its
board of directors, make or purchase:
(1) Any unsecured loan at least
20% of which is
guaranteed under the provisions of the servicemen's readjustment act of
1944, as now or hereafter amended;
(2) simple interest, discount or gross charge loans for property
alteration, repair, equipping or improvement without the security of a
lien upon such property, subject to such prohibitions, limitations and
conditions as the commissioner may by regulation prescribe. The
resulting aggregate amount of all such loans shall not exceed an amount
equal to 20% of such association's assets. No
association may make any unsecured loan to a director, officer or
employee of the association, or to any person or firm regularly serving
the association in the capacity of attorney, except for the
alteration, repair, equipping or improvement of the home or combination
of home and business property owned and occupied by such borrowing
director, officer, employee, attorney or firm;
(3) line of credit real estate loans for home property, secured or
unsecured, subject to such prohibitions, limitations and conditions as
the commissioner may by regulation prescribe. The resulting aggregate
amount of all such loans shall not exceed an amount greater than 5%
of the association's assets or all of its net worth accounts.
(u) Subject to such prohibitions, limitations and conditions as the
commissioner may by regulation prescribe, any such association may sell
to, purchase from or participate with other lenders in loans of any type
that such an association may otherwise make if the other participants
are approved federal housing administration lenders, instrumentalities
or corporations owned wholly or in part by the United States or this
state, or are associations or corporations insured by the federal
savings and loan association corporation or the federal deposit
insurance corporation. Such loans may be outside the regular lending
area of such association.
(v) Subject to such prohibitions, limitations and conditions as the commissioner
may by regulation prescribe, the following loans or investments are permitted,
but the authority conferred in the following paragraphs is limited to an
amount not to exceed 5% of the assets of the association for each paragraph:
(1) Loans made for the payment of educational expenses;
(2) investments in real property and obligations secured by liens on real
property located within a geographic area or neighborhood receiving concentrated
development assistance by a local government under title I of the housing
and community development act of 1974, except that no investment under this
paragraph in such real property may exceed an aggregate investment of 2%
of the assets of the association;
(3) loans upon the security of or respecting real property or interests
therein used for primarily residential or farm purposes that do not otherwise
comply with the limitations of this section;
(4) investments not exceeding the greater of: (A) The sum of the association's
net worth accounts; or (B) five percent of the assets of the association,
in loans the principal purpose of which is to provide financing with respect
to what is or is expected to become primarily residential real estate where:
(i) The association relies substantially for repayment on the borrower's
general credit standing and forecast of income without other security; or
(ii) the association relies on other assurances for repayment, including
but not limited to a guaranty or similar obligation of a third party. Investments
under this subsection shall not be included in any percentage of assets
or other percentage referred to in this section.
(w) Subject to such prohibitions, limitations and conditions as the
commissioner may by regulation prescribe, any such association may make
any loan for the purpose of mobile home financing.
(x) Subject to such prohibitions, limitations and conditions as the
commissioner may by regulation prescribe, any such association may
maintain safety deposit boxes and rent the same for public use.
(y) Subject to such prohibitions, limitations and conditions as the commissioner
may by regulation prescribe, any such association may issue credit cards,
extend credit in connection therewith, and otherwise engage
in or participate in credit card operations.
(z) Subject to such prohibitions, limitations and conditions as the commissioner
may by regulation prescribe, any such association shall have the power and
authority to make the following additional loans and other investments to
the extent authorized as follows:
(1) An association whose net worth accounts in the aggregate exceed 5%
of its withdrawable capital is authorized to invest in, lend to or to commit
itself to lend to, any business development credit corporation incorporated
in the state of Kansas, but the aggregate amount of such investments,
loans and commitments of any such association shall not exceed 1/2%
of the total outstanding loans of the association or $250,000, whichever is less;
(2) investments in the capital stock, obligations or other securities
of any corporation organized under the laws of the state of Kansas, if the
entire capital stock of such corporation is available for purchase only
by savings and loan associations of Kansas and by federal associations having
their home offices in the state of Kansas. No association may make any
investment under this paragraph if its aggregate outstanding investment
under this paragraph would exceed 3% of the assets of the association.
Any investment permitted under this
paragraph which exceeds 2% of assets shall be used primarily
for community, inner-city or community development purposes;
(3) investments in: (A) Loans secured by mortgages for which the association
has the benefit of insurance under title X of the national housing act or
of a commitment or agreement for such insurance;
(B) investments in housing project loans having the benefit of any guaranty
under section 221 of the foreign assistance act of 1961 or loans having
the benefit of any guaranty under section 224 of such act, or any commitment
or agreement with respect to such loans made pursuant to either of such
sections and in the share capital and capital reserve of the inter-American
savings and loan bank. This authority extends to the acquisition, holding,
and disposition of loans having the benefit of any guaranty under section
221 or 222 of such act, or of any commitment or agreement for any such guaranty;
(C) investments under subparagraph (A) of this paragraph shall not be
included in any percentage of assets or other percentage referred to in
this subsection. Investments under subparagraph (B) of this paragraph shall
not exceed, in the case of any association, 1% of the assets of such association;
(4) an association whose net worth in aggregate exceeds that amount which
is determined by the national housing act is authorized to invest in obligations
which constitute prudent investments, as defined by the commissioner, of
Kansas and its political subdivisions thereof, including any agency, corporation
or instrumentality if the proceeds of such obligations are to be used for
rehabilitation, financing or the construction of residential real estate,
and the aggregate amount of all investments under this paragraph shall not
exceed the amount of the association's net worth accounts.
(aa) Subject to such prohibitions, limitations and conditions as the commissioner
may by regulation provide an association may engage in financial
futures transactions and financial options transactions.
(bb) Subject to such prohibitions, limitations and conditions as the commissioner
may by regulation provide an association may establish or maintain a data
processing office with functions limited to providing data processing services
for its own use or primarily for other depository institutions without observing
the application and approval procedures for branch offices as provided for
in K.S.A. 17-5225, and amendments thereto. An association may participate
with others in establishing or maintaining a data processing office, except
that the association may participate in establishing or maintaining
a data processing office controlled by an entity not subject to a federal
or state agency regulating financial institutions only if such entity has
agreed in writing with the commissioner that it will permit and pay for
such examination of the office as the commissioner deems necessary, and
that it will make available for such purposes any records in its possession
relating to the operation of the office.
(cc) Subject to such prohibitions, limitations and conditions as the commissioner
may by regulation provide an association may provide correspondent
services primarily to other depository institutions. An association may
receive noninterest-bearing deposits from correspondent institutions for
use as compensating balances, for settlement purposes or for other purposes
incidental to a correspondent relationship. Such deposits may be payable
on demand and subject to withdrawal by negotiable or transferable instrument,
order or authorization. Such deposits shall not give rise to voting rights
or other rights of membership in a mutual association. An association may
maintain a noninterest-bearing account at any institution whose accounts
are insured by the federal savings and loan insurance corporation or the
federal deposit insurance corporation, and an association may maintain such
an account at an institution whose accounts are insured pursuant to a state
deposit insurance program if such account is necessary or incidental to
a correspondent relationship.
(dd) (1) Subject to such prohibitions, limitations and conditions as
the commissioner may by regulation provide an association:
(A) May become
the legal or beneficial owner of tangible personal property or real property
for the purpose of leasing such property;
(B) may obtain an assignment of
a lessor's interest in a lease of such property; and
(C) may incur obligations
incidental to its position as the legal or beneficial owner and lessor of
the leased property if the lease is a net, full-payout lease representing
a noncancelable obligation of the lessee, notwithstanding the possible early
termination of the lease and at the expiration of the lease, the association's
interest in the property shall be liquidated or released on a net basis
as soon as practicable;
(2) a lease of tangible personal property made to a natural person for
personal, family or household purposes pursuant to this subsection shall
be subject to all limitations applicable to the amount of an association's
investment in consumer loans. A lease made for commercial, corporate, business
or agricultural purposes pursuant to this subsection shall be subject to
all limitations applicable to the amount of an association's investment
in commercial loans. A lease of residential or commercial real property
made pursuant to this subsection shall be subject to all limitations applicable
to the amount of an association's investment in residential or commercial
real property loans;
(3) for the purposes of this subsection:
(A) "Net lease" means a lease under which the association will not,
directly or indirectly, provide or be obligated to provide for:
(i) The servicing, repair or maintenance of the leased property during
the lease term;
(ii) the purchasing of parts and accessories for the leased property,
except that improvements and additions to the lease property may be leased
to the lessee upon its request in accordance with the full-payout requirements
of this section;
(iii) the loan of replacement or substitute property while the leased
property is being serviced;
(iv) the purchasing of insurance for the lessee, except where the lessee
has failed to discharge a contractual obligation to purchase or maintain insurance; or
(v) the renewal of any license, registration or filing for the property
unless such action by the association is necessary to protect its interest
as an owner or financer of the property;
(B) "full-payout lease" means a lease from which the lessor can reasonably
expect to realize a return of its full investment in the leased property,
plus the estimated cost of financing the property over the term of the lease,
from rentals, estimated tax benefits and the estimated residual value of
the property at the expiration of the initial term of the lease. The estimated
residual value of the property shall not exceed 25% for personal property
or 20% for real property, of the acquisition cost of the property to the
lessor unless the estimated residual value is guaranteed by a manufacturer,
the lessee or a third party not an affiliate of the association and the
association makes the determination that the guarantor has the resources
to meet the guarantee. In all cases, however, both the estimated residual
value of the property and that portion of the estimated residual value relied
upon by the lessor to satisfy the requirements of a full-payout lease must
be reasonable in light of the nature of the leased property and all relevant
circumstances so that realization of the lessor's full investment plus the
cost of financing the property depends primarily on the creditworthiness
of the lessee and of any guarantor of the residual value, and on the residual
market value of the leased property. The maximum term of a full-payout
lease shall be 40 years;
(4) if, in good faith, an association believes that there has been an
unanticipated change in conditions which threaten its financial position
by significantly increasing its exposure to loss, the provisions of this
subsection shall not prevent the association:
(A) As the owner and lessor under a net, full-payout lease, from taking
reasonable and appropriate action to salvage or protect the value of the
property of its interest arising under the lease;
(B) as the assignee of a lessor's interest in a lease, from becoming
the owner and lessor of the leased property pursuant to its contractual
right, or from taking any reasonable and appropriate action to salvage or
protect the value of the property or its interest arising under the lease; or
(C) from including any provisions in a lease, or from making any additional
agreements, to protect its financial position or investment in the circumstances
set forth in this paragraph.
History: L. 1943, ch. 133, § 79; L. 1947, ch. 188, § 1; L.
1949, ch. 193, § 1; L. 1955, ch. 140, § 3; L. 1961, ch. 125, § 2; L.
1963, ch. 145, § 1; L. 1965, ch. 156, § 3; L. 1969, ch. 131, § 3; L.
1971, ch. 82, § 1; L. 1972, ch. 68, § 1; L. 1973, ch. 97, § 1; L.
1975, ch. 141, § 1; L. 1975, ch. 142, § 3; L. 1978, ch. 83, § 1;
L. 1981, ch. 105, § 5; L. 1983, ch. 86, § 3; April 21.
17-5501.Powers of association generally.
Every association incorporated pursuant to or operating under the
provisions of this act shall have all the powers enumerated, authorized
and permitted by this act and such other rights, privileges and powers
as may be incidental to or necessary for the accomplishment of the
objects and purposes of the association. Among others, every association
shall have the following powers: (a) To sue and be sued, complain and
defend in any court of law or equity.
(b) To purchase, hold and convey real and personal estate consistent
with its objects and powers; and to mortgage, pledge or lease any real
or personal estate; and to take property by gifts, devise or bequest.
(c) To have a corporate seal, which may be affixed by imprint,
facsimile or otherwise.
(d) To appoint officers, agents and employees as its business shall
require, and allow them suitable compensation.
(e) To adopt and amend bylaws as provided in this act.
(f) To insure its shares or deposits with the federal savings and
loan insurance corporation or with an insurer approved by the state
commissioner of insurance under the provisions of this act for such
purpose, and qualify as a member of a federal home loan bank.
(g) To accept savings and investments as payments on shares or
deposits as provided in this act.
(h) Subject to such prohibitions,
limitations and conditions as the commissioner may by regulation provide,
an association may make loans to members on the security of savings accounts
and loans specifically related to transaction accounts.
(i) Subject to such prohibitions, limitations and conditions as the commissioner
may by regulation prescribe, any such association may make home loans on
the security of liens upon residential real property in an amount which,
when added to the amount unpaid upon prior mortgages, liens or encumbrances,
if any, upon such real estate does not exceed the appraised value thereof.
No such loan shall be made directly or indirectly to a director or officer
except a single loan on a home property.
(j) One
loan may be made to an officer, director or employee,
in addition to a home loan, but no such loan secured by real estate mortgage
shall be made to an officer, director or employee which at the time of
granting such advance shall exceed 5% of the net worth accounts of
such association or $90,000 whichever is the smaller. Any negotiable order
of withdrawal, share or deposit loan or real estate loan made to any
officer, director or employee must be approved by the board of
directors and such approval entered upon the minutes of the meeting
approving same. All such loan restrictions applicable to loans made to
an officer, director or employee of a savings and loan association shall
apply to any and all loans made to any general or limited partnership,
corporation, trust or association if an officer, director or employee of
the savings and loan association is a general or limited partner, or the
owner, member or stockholder of 10% or more of the stock
or other evidence of ownership of the entity shown as obligor on the
loan.
(k) Subject to such prohibitions, limitations and conditions as the commissioner
may by regulation prescribe, an association shall have authority to invest
in the following:
(1) Investments in obligations of or fully guaranteed
as to principal and interest by, the United States;
(2) investments in the
stocks and bonds of a federal home loan bank or in the stock of the federal
national mortgage association;
(3) investments in mortgages, obligations
or other securities which are or ever have been sold by the federal home
loan mortgage corporation pursuant to section 305 or 306 of the federal
home loan mortgage corporation act;
(4) investments in obligations, participations,
securities or other instruments of or issued by or fully guaranteed as to
principal and interest by the federal national mortgage association, the
student loan marketing association or the government national mortgage association,
or any other agency of the United States and an association may issue and
sell securities which are guaranteed pursuant to section 306(g) of the national
housing act;
(5) investments in the time deposits, certificates or
accounts of any bank the deposits of which are
insured by the federal deposit insurance corporation, or in the savings
accounts, certificates or other accounts of any institution the accounts
of which are insured by the federal savings and loan insurance
corporation;
(6) investments in obligations of, or issued by, any
state or any political
subdivision thereof including any agency, corporation or instrumentality
of a state or political subdivision, except that an association may not
invest more than 10% of its capital and surplus in obligations of any one
issuer, exclusive of investments in general obligations of any issuer;
(7) purchase of loans secured by liens on improved real estate which are
insured under provisions of the national housing act, or insured as provided
in the servicemen's readjustment act of 1944 or 38 U.S.C. chapter 37;
(8) loans
made for the repair, equipping, alteration or improvement of any residential
real property, and loans made for the purpose of manufactured home financing;
(9) loans as to which the association has the benefit of insurance under
section 240 of the national housing act, or of a commitment or agreement
therefor;
(10) loans to financial institutions with respect to which the
United States or an agency or instrumentality thereof has any function of
examination or supervision, or to any broker or dealer registered with the
securities and exchange commission, secured by loans, obligations or investments
in which the association has the statutory authority to invest directly;
(11) investments which at the time of making, are assets eligible for inclusion
toward the satisfaction of any liquidity requirement imposed by the federal
home loan bank board, but only to the extent the investment is permitted
to be so included under
regulations of the federal home loan bank board or is otherwise authorized;
(12) investments in shares of stock issued by a corporation authorized to
be created pursuant to title IX of the housing and urban development act
of 1968, and investments in any partnership, limited partnership, or joint
venture formed pursuant to section 907(a) or 907(c) of such act;
(13) loans
as to which the association has the benefit of any guarantee under title
IV of the housing and urban development act of 1968, under part B of the
urban growth and new community development act of 1970, or under section
802 of the housing and community development act of 1974 as in effect on
or after the date of enactment of the depository institutions deregulation
and monetary control act of 1980, or of a commitment of agreement therefor;
(14) investments in, commitments to invest in, loans to, or commitments
to lend to any state housing corporation, provided that such obligations
or loans are secured directly or indirectly through an agent or fiduciary,
by a first lien on improved real estate which is insured under the provisions
of the national housing act and that in
the event of default, the holder of such obligations or loans would have
the right directly or indirectly through an agent or fiduciary, to cause
to be subject to the satisfaction of such obligations or loans the real
estate described in the first lien or the insurance proceeds under the national
housing act;
(15) invest in, redeem or hold shares or certificates
in any open-end management investment company which is registered with the
securities and exchange commission under the investment company act of 1940
and the portfolio of which is restricted by such management company's investment
policy, changeable only if authorized by shareholder vote, solely to any
such investments as an association by law or regulation may, without limitation
as to percentage of assets, invest in, sell, redeem, hold, or otherwise
deal with;
(16)
stock obligations, or other securities of any small business investment
company formed pursuant to section 301(d) of the small business investment
act of 1958, for the purpose of aiding members of the federal home loan
bank system. Such investments shall not exceed an aggregate
investment of 1% of the assets of the association;
(17) in other
securities approved by the commissioner.
(l) Without restriction upon the general powers of the association
to invest in:
(1) Real estate whereon there is or may be erected a
building or buildings for the transaction of the business of the
association, from portions of which, not required for its own use, a
revenue may be derived by rentals or otherwise. An association may
invest in such real estate an amount representing the cost of land and
improvements not exceeding the sum of its net worth accounts. It may, however,
invest in such real estate, a larger sum with
the approval of the commissioner;
(2) real estate purchased at sheriff's
sale or at any other sale, public or private, judicial or otherwise,
upon which the association has a lien or claim, legal or equitable;
(3)
real estate accepted by the association in satisfaction of any debt;
(4)
real estate acquired by the association in exchange for real estate
owned by the association;
(5) real estate acquired by the association in
connection with salvaging the value of property owned by the
association;
(6) title to all real estate shall be taken and held in the
name of the association and such title shall immediately be recorded in
accordance with law.
(m) If and when an association is not a member of a federal home
loan bank, to borrow not more than an aggregate amount equal to 1/4
of its capital on the date of borrowing. If and when an
association is a member of a federal home loan bank, to secure advances
of not more than an aggregate amount equal to its capital. Within an
amount equal to its capital, the association may borrow from sources
other than such federal home loan bank an aggregate amount not in excess
of 25% of its capital. A subsequent reduction of capital
shall not affect in any way outstanding obligations for borrowed money.
All such loans and advances may be secured by property of the
association.
(n) To repurchase and redeem shares in accordance with the
provisions of this act.
(o) To pay a bonus to members in accordance with the provisions of
the bylaws.
(p) If and when an association is a member of a federal home loan
bank, to act as fiscal agent of the United States, and when designated
for that purpose by the secretary of the treasury, it shall perform
under such regulations as such secretary may prescribe, all such
reasonable duties as fiscal agent of the United States as such secretary
may require, and shall have power to act as agent for any other
instrumentality and as agent of the state in accordance with the laws of
this state.
(q) To dissolve, merge or reorganize in the manner provided in this
act.
(r) To sell and assign notes and mortgages without recourse, except
that notes and mortgages may be assigned with recourse to any federal
home loan bank of which the association is a member.
(s) Subject to such
prohibitions, limitations and conditions as the commissioner may prescribe,
the following loans or investments are permitted:
(1) An association may make commercial real estate loans on the security
of liens upon other improved real estate. The resulting aggregate
of such loans shall not exceed an amount equal to 40% of such association's assets;
(2) an association may make secured or unsecured loans for personal, family
or household purposes, including loans reasonably incident to the provision
of such credit, and may invest in, sell or hold commercial paper
and corporate debt securities, as defined and approved by the commissioner.
The resulting aggregate of such loans shall not exceed an amount equal
to 30% of such association's assets;
(3) an association may invest in tangible personal property, including,
without limitation, vehicles, manufactured homes, machinery, equipment or
furniture, for rental or sale. The resulting aggregate of such investments
shall not exceed an amount equal to 10% of such association's assets;
(4) an association may make secured or unsecured loans for commercial,
corporate, business or agriculture purposes. No association may make loans
to one borrower under the authority of this paragraph in excess of the amount
a national bank having identical total capital and surplus could lend such
borrower. The resulting aggregate of such loans made by an association
and by a corporation owned by the association under paragraph (2) of subsection
(z) of this section shall not exceed an amount equal to 5% of such association's
assets prior to January 1, 1984, or 10% of such association's assets thereafter.
(t) Any association may, upon adoption of such a loan plan by its
board of directors, make or purchase:
(1) Any unsecured loan at least
20% of which is
guaranteed under the provisions of the servicemen's readjustment act of
1944, as now or hereafter amended;
(2) simple interest, discount or gross charge loans for property
alteration, repair, equipping or improvement without the security of a
lien upon such property, subject to such prohibitions, limitations and
conditions as the commissioner may by regulation prescribe. The
resulting aggregate amount of all such loans shall not exceed an amount
equal to 20% of such association's assets. No
association may make any unsecured loan to a director, officer or
employee of the association, or to any person or firm regularly serving
the association in the capacity of attorney, except for the
alteration, repair, equipping or improvement of the home or combination
of home and business property owned and occupied by such borrowing
director, officer, employee, attorney or firm;
(3) line of credit real estate loans for home property, secured or
unsecured, subject to such prohibitions, limitations and conditions as
the commissioner may by regulation prescribe. The resulting aggregate
amount of all such loans shall not exceed an amount greater than 5%
of the association's assets or all of its net worth accounts.
(u) Subject to such prohibitions, limitations and conditions as the
commissioner may by regulation prescribe, any such association may sell
to, purchase from or participate with other lenders in loans of any type
that such an association may otherwise make if the other participants
are approved federal housing administration lenders, instrumentalities
or corporations owned wholly or in part by the United States or this
state, or are associations or corporations insured by the federal
savings and loan association corporation or the federal deposit
insurance corporation. Such loans may be outside the regular lending
area of such association.
(v) Subject to such prohibitions, limitations and conditions as the commissioner
may by regulation prescribe, the following loans or investments are permitted,
but the authority conferred in the following paragraphs is limited to an
amount not to exceed 5% of the assets of the association for each paragraph:
(1) Loans made for the payment of educational expenses;
(2) investments in real property and obligations secured by liens on real
property located within a geographic area or neighborhood receiving concentrated
development assistance by a local government under title I of the housing
and community development act of 1974, except that no investment under this
paragraph in such real property may exceed an aggregate investment of 2%
of the assets of the association;
(3) loans upon the security of or respecting real property or interests
therein used for primarily residential or farm purposes that do not otherwise
comply with the limitations of this section;
(4) investments not exceeding the greater of: (A) The sum of the association's
net worth accounts; or (B) five percent of the assets of the association,
in loans the principal purpose of which is to provide financing with respect
to what is or is expected to become primarily residential real estate where:
(i) The association relies substantially for repayment on the borrower's
general credit standing and forecast of income without other security; or
(ii) the association relies on other assurances for repayment, including
but not limited to a guaranty or similar obligation of a third party. Investments
under this subsection shall not be included in any percentage of assets
or other percentage referred to in this section.
(w) Subject to such prohibitions, limitations and conditions as the
commissioner may by regulation prescribe, any such association may make
any loan for the purpose of mobile home financing.
(x) Subject to such prohibitions, limitations and conditions as the
commissioner may by regulation prescribe, any such association may
maintain safety deposit boxes and rent the same for public use.
(y) Subject to such prohibitions, limitations and conditions as the commissioner
may by regulation prescribe, any such association may issue credit cards,
extend credit in connection therewith, and otherwise engage
in or participate in credit card operations.
(z) Subject to such prohibitions, limitations and conditions as the commissioner
may by regulation prescribe, any such association shall have the power and
authority to make the following additional loans and other investments to
the extent authorized as follows:
(1) An association whose net worth accounts in the aggregate exceed 5%
of its withdrawable capital is authorized to invest in, lend to or to commit
itself to lend to, any business development credit corporation incorporated
in the state of Kansas, but the aggregate amount of such investments,
loans and commitments of any such association shall not exceed 1/2%
of the total outstanding loans of the association or $250,000, whichever is less;
(2) investments in the capital stock, obligations or other securities
of any corporation organized under the laws of the state of Kansas, if the
entire capital stock of such corporation is available for purchase only
by savings and loan associations of Kansas and by federal associations having
their home offices in the state of Kansas. No association may make any
investment under this paragraph if its aggregate outstanding investment
under this paragraph would exceed 3% of the assets of the association.
Any investment permitted under this
paragraph which exceeds 2% of assets shall be used primarily
for community, inner-city or community development purposes;
(3) investments in: (A) Loans secured by mortgages for which the association
has the benefit of insurance under title X of the national housing act or
of a commitment or agreement for such insurance;
(B) investments in housing project loans having the benefit of any guaranty
under section 221 of the foreign assistance act of 1961 or loans having
the benefit of any guaranty under section 224 of such act, or any commitment
or agreement with respect to such loans made pursuant to either of such
sections and in the share capital and capital reserve of the inter-American
savings and loan bank. This authority extends to the acquisition, holding,
and disposition of loans having the benefit of any guaranty under section
221 or 222 of such act, or of any commitment or agreement for any such guaranty;
(C) investments under subparagraph (A) of this paragraph shall not be
included in any percentage of assets or other percentage referred to in
this subsection. Investments under subparagraph (B) of this paragraph shall
not exceed, in the case of any association, 1% of the assets of such association;
(4) an association whose net worth in aggregate exceeds that amount which
is determined by the national housing act is authorized to invest in obligations
which constitute prudent investments, as defined by the commissioner, of
Kansas and its political subdivisions thereof, including any agency, corporation
or instrumentality if the proceeds of such obligations are to be used for
rehabilitation, financing or the construction of residential real estate,
and the aggregate amount of all investments under this paragraph shall not
exceed the amount of the association's net worth accounts.
(aa) Subject to such prohibitions, limitations and conditions as the commissioner
may by regulation provide an association may engage in financial
futures transactions and financial options transactions.
(bb) Subject to such prohibitions, limitations and conditions as the commissioner
may by regulation provide an association may establish or maintain a data
processing office with functions limited to providing data processing services
for its own use or primarily for other depository institutions without observing
the application and approval procedures for branch offices as provided for
in K.S.A. 17-5225, and amendments thereto. An association may participate
with others in establishing or maintaining a data processing office, except
that the association may participate in establishing or maintaining
a data processing office controlled by an entity not subject to a federal
or state agency regulating financial institutions only if such entity has
agreed in writing with the commissioner that it will permit and pay for
such examination of the office as the commissioner deems necessary, and
that it will make available for such purposes any records in its possession
relating to the operation of the office.
(cc) Subject to such prohibitions, limitations and conditions as the commissioner
may by regulation provide an association may provide correspondent
services primarily to other depository institutions. An association may
receive noninterest-bearing deposits from correspondent institutions for
use as compensating balances, for settlement purposes or for other purposes
incidental to a correspondent relationship. Such deposits may be payable
on demand and subject to withdrawal by negotiable or transferable instrument,
order or authorization. Such deposits shall not give rise to voting rights
or other rights of membership in a mutual association. An association may
maintain a noninterest-bearing account at any institution whose accounts
are insured by the federal savings and loan insurance corporation or the
federal deposit insurance corporation, and an association may maintain such
an account at an institution whose accounts are insured pursuant to a state
deposit insurance program if such account is necessary or incidental to
a correspondent relationship.
(dd) (1) Subject to such prohibitions, limitations and conditions as
the commissioner may by regulation provide an association:
(A) May become
the legal or beneficial owner of tangible personal property or real property
for the purpose of leasing such property;
(B) may obtain an assignment of
a lessor's interest in a lease of such property; and
(C) may incur obligations
incidental to its position as the legal or beneficial owner and lessor of
the leased property if the lease is a net, full-payout lease representing
a noncancelable obligation of the lessee, notwithstanding the possible early
termination of the lease and at the expiration of the lease, the association's
interest in the property shall be liquidated or released on a net basis
as soon as practicable;
(2) a lease of tangible personal property made to a natural person for
personal, family or household purposes pursuant to this subsection shall
be subject to all limitations applicable to the amount of an association's
investment in consumer loans. A lease made for commercial, corporate, business
or agricultural purposes pursuant to this subsection shall be subject to
all limitations applicable to the amount of an association's investment
in commercial loans. A lease of residential or commercial real property
made pursuant to this subsection shall be subject to all limitations applicable
to the amount of an association's investment in residential or commercial
real property loans;
(3) for the purposes of this subsection:
(A) "Net lease" means a lease under which the association will not,
directly or indirectly, provide or be obligated to provide for:
(i) The servicing, repair or maintenance of the leased property during
the lease term;
(ii) the purchasing of parts and accessories for the leased property,
except that improvements and additions to the lease property may be leased
to the lessee upon its request in accordance with the full-payout requirements
of this section;
(iii) the loan of replacement or substitute property while the leased
property is being serviced;
(iv) the purchasing of insurance for the lessee, except where the lessee
has failed to discharge a contractual obligation to purchase or maintain insurance; or
(v) the renewal of any license, registration or filing for the property
unless such action by the association is necessary to protect its interest
as an owner or financer of the property;
(B) "full-payout lease" means a lease from which the lessor can reasonably
expect to realize a return of its full investment in the leased property,
plus the estimated cost of financing the property over the term of the lease,
from rentals, estimated tax benefits and the estimated residual value of
the property at the expiration of the initial term of the lease. The estimated
residual value of the property shall not exceed 25% for personal property
or 20% for real property, of the acquisition cost of the property to the
lessor unless the estimated residual value is guaranteed by a manufacturer,
the lessee or a third party not an affiliate of the association and the
association makes the determination that the guarantor has the resources
to meet the guarantee. In all cases, however, both the estimated residual
value of the property and that portion of the estimated residual value relied
upon by the lessor to satisfy the requirements of a full-payout lease must
be reasonable in light of the nature of the leased property and all relevant
circumstances so that realization of the lessor's full investment plus the
cost of financing the property depends primarily on the creditworthiness
of the lessee and of any guarantor of the residual value, and on the residual
market value of the leased property. The maximum term of a full-payout
lease shall be 40 years;
(4) if, in good faith, an association believes that there has been an
unanticipated change in conditions which threaten its financial position
by significantly increasing its exposure to loss, the provisions of this
subsection shall not prevent the association:
(A) As the owner and lessor under a net, full-payout lease, from taking
reasonable and appropriate action to salvage or protect the value of the
property of its interest arising under the lease;
(B) as the assignee of a lessor's interest in a lease, from becoming
the owner and lessor of the leased property pursuant to its contractual
right, or from taking any reasonable and appropriate action to salvage or
protect the value of the property or its interest arising under the lease; or
(C) from including any provisions in a lease, or from making any additional
agreements, to protect its financial position or investment in the circumstances
set forth in this paragraph.
History: L. 1943, ch. 133, § 79; L. 1947, ch. 188, § 1; L.
1949, ch. 193, § 1; L. 1955, ch. 140, § 3; L. 1961, ch. 125, § 2; L.
1963, ch. 145, § 1; L. 1965, ch. 156, § 3; L. 1969, ch. 131, § 3; L.
1971, ch. 82, § 1; L. 1972, ch. 68, § 1; L. 1973, ch. 97, § 1; L.
1975, ch. 141, § 1; L. 1975, ch. 142, § 3; L. 1978, ch. 83, § 1;
L. 1981, ch. 105, § 5; L. 1983, ch. 86, § 3; April 21.
17-5501.Powers of association generally.
Every association incorporated pursuant to or operating under the
provisions of this act shall have all the powers enumerated, authorized
and permitted by this act and such other rights, privileges and powers
as may be incidental to or necessary for the accomplishment of the
objects and purposes of the association. Among others, every association
shall have the following powers: (a) To sue and be sued, complain and
defend in any court of law or equity.
(b) To purchase, hold and convey real and personal estate consistent
with its objects and powers; and to mortgage, pledge or lease any real
or personal estate; and to take property by gifts, devise or bequest.
(c) To have a corporate seal, which may be affixed by imprint,
facsimile or otherwise.
(d) To appoint officers, agents and employees as its business shall
require, and allow them suitable compensation.
(e) To adopt and amend bylaws as provided in this act.
(f) To insure its shares or deposits with the federal savings and
loan insurance corporation or with an insurer approved by the state
commissioner of insurance under the provisions of this act for such
purpose, and qualify as a member of a federal home loan bank.
(g) To accept savings and investments as payments on shares or
deposits as provided in this act.
(h) Subject to such prohibitions,
limitations and conditions as the commissioner may by regulation provide,
an association may make loans to members on the security of savings accounts
and loans specifically related to transaction accounts.
(i) Subject to such prohibitions, limitations and conditions as the commissioner
may by regulation prescribe, any such association may make home loans on
the security of liens upon residential real property in an amount which,
when added to the amount unpaid upon prior mortgages, liens or encumbrances,
if any, upon such real estate does not exceed the appraised value thereof.
No such loan shall be made directly or indirectly to a director or officer
except a single loan on a home property.
(j) One
loan may be made to an officer, director or employee,
in addition to a home loan, but no such loan secured by real estate mortgage
shall be made to an officer, director or employee which at the time of
granting such advance shall exceed 5% of the net worth accounts of
such association or $90,000 whichever is the smaller. Any negotiable order
of withdrawal, share or deposit loan or real estate loan made to any
officer, director or employee must be approved by the board of
directors and such approval entered upon the minutes of the meeting
approving same. All such loan restrictions applicable to loans made to
an officer, director or employee of a savings and loan association shall
apply to any and all loans made to any general or limited partnership,
corporation, trust or association if an officer, director or employee of
the savings and loan association is a general or limited partner, or the
owner, member or stockholder of 10% or more of the stock
or other evidence of ownership of the entity shown as obligor on the
loan.
(k) Subject to such prohibitions, limitations and conditions as the commissioner
may by regulation prescribe, an association shall have authority to invest
in the following:
(1) Investments in obligations of or fully guaranteed
as to principal and interest by, the United States;
(2) investments in the
stocks and bonds of a federal home loan bank or in the stock of the federal
national mortgage association;
(3) investments in mortgages, obligations
or other securities which are or ever have been sold by the federal home
loan mortgage corporation pursuant to section 305 or 306 of the federal
home loan mortgage corporation act;
(4) investments in obligations, participations,
securities or other instruments of or issued by or fully guaranteed as to
principal and interest by the federal national mortgage association, the
student loan marketing association or the government national mortgage association,
or any other agency of the United States and an association may issue and
sell securities which are guaranteed pursuant to section 306(g) of the national
housing act;
(5) investments in the time deposits, certificates or
accounts of any bank the deposits of which are
insured by the federal deposit insurance corporation, or in the savings
accounts, certificates or other accounts of any institution the accounts
of which are insured by the federal savings and loan insurance
corporation;
(6) investments in obligations of, or issued by, any
state or any political
subdivision thereof including any agency, corporation or instrumentality
of a state or political subdivision, except that an association may not
invest more than 10% of its capital and surplus in obligations of any one
issuer, exclusive of investments in general obligations of any issuer;
(7) purchase of loans secured by liens on improved real estate which are
insured under provisions of the national housing act, or insured as provided
in the servicemen's readjustment act of 1944 or 38 U.S.C. chapter 37;
(8) loans
made for the repair, equipping, alteration or improvement of any residential
real property, and loans made for the purpose of manufactured home financing;
(9) loans as to which the association has the benefit of insurance under
section 240 of the national housing act, or of a commitment or agreement
therefor;
(10) loans to financial institutions with respect to which the
United States or an agency or instrumentality thereof has any function of
examination or supervision, or to any broker or dealer registered with the
securities and exchange commission, secured by loans, obligations or investments
in which the association has the statutory authority to invest directly;
(11) investments which at the time of making, are assets eligible for inclusion
toward the satisfaction of any liquidity requirement imposed by the federal
home loan bank board, but only to the extent the investment is permitted
to be so included under
regulations of the federal home loan bank board or is otherwise authorized;
(12) investments in shares of stock issued by a corporation authorized to
be created pursuant to title IX of the housing and urban development act
of 1968, and investments in any partnership, limited partnership, or joint
venture formed pursuant to section 907(a) or 907(c) of such act;
(13) loans
as to which the association has the benefit of any guarantee under title
IV of the housing and urban development act of 1968, under part B of the
urban growth and new community development act of 1970, or under section
802 of the housing and community development act of 1974 as in effect on
or after the date of enactment of the depository institutions deregulation
and monetary control act of 1980, or of a commitment of agreement therefor;
(14) investments in, commitments to invest in, loans to, or commitments
to lend to any state housing corporation, provided that such obligations
or loans are secured directly or indirectly through an agent or fiduciary,
by a first lien on improved real estate which is insured under the provisions
of the national housing act and that in
the event of default, the holder of such obligations or loans would have
the right directly or indirectly through an agent or fiduciary, to cause
to be subject to the satisfaction of such obligations or loans the real
estate described in the first lien or the insurance proceeds under the national
housing act;
(15) invest in, redeem or hold shares or certificates
in any open-end management investment company which is registered with the
securities and exchange commission under the investment company act of 1940
and the portfolio of which is restricted by such management company's investment
policy, changeable only if authorized by shareholder vote, solely to any
such investments as an association by law or regulation may, without limitation
as to percentage of assets, invest in, sell, redeem, hold, or otherwise
deal with;
(16)
stock obligations, or other securities of any small business investment
company formed pursuant to section 301(d) of the small business investment
act of 1958, for the purpose of aiding members of the federal home loan
bank system. Such investments shall not exceed an aggregate
investment of 1% of the assets of the association;
(17) in other
securities approved by the commissioner.
(l) Without restriction upon the general powers of the association
to invest in:
(1) Real estate whereon there is or may be erected a
building or buildings for the transaction of the business of the
association, from portions of which, not required for its own use, a
revenue may be derived by rentals or otherwise. An association may
invest in such real estate an amount representing the cost of land and
improvements not exceeding the sum of its net worth accounts. It may, however,
invest in such real estate, a larger sum with
the approval of the commissioner;
(2) real estate purchased at sheriff's
sale or at any other sale, public or private, judicial or otherwise,
upon which the association has a lien or claim, legal or equitable;
(3)
real estate accepted by the association in satisfaction of any debt;
(4)
real estate acquired by the association in exchange for real estate
owned by the association;
(5) real estate acquired by the association in
connection with salvaging the value of property owned by the
association;
(6) title to all real estate shall be taken and held in the
name of the association and such title shall immediately be recorded in
accordance with law.
(m) If and when an association is not a member of a federal home
loan bank, to borrow not more than an aggregate amount equal to 1/4
of its capital on the date of borrowing. If and when an
association is a member of a federal home loan bank, to secure advances
of not more than an aggregate amount equal to its capital. Within an
amount equal to its capital, the association may borrow from sources
other than such federal home loan bank an aggregate amount not in excess
of 25% of its capital. A subsequent reduction of capital
shall not affect in any way outstanding obligations for borrowed money.
All such loans and advances may be secured by property of the
association.
(n) To repurchase and redeem shares in accordance with the
provisions of this act.
(o) To pay a bonus to members in accordance with the provisions of
the bylaws.
(p) If and when an association is a member of a federal home loan
bank, to act as fiscal agent of the United States, and when designated
for that purpose by the secretary of the treasury, it shall perform
under such regulations as such secretary may prescribe, all such
reasonable duties as fiscal agent of the United States as such secretary
may require, and shall have power to act as agent for any other
instrumentality and as agent of the state in accordance with the laws of
this state.
(q) To dissolve, merge or reorganize in the manner provided in this
act.
(r) To sell and assign notes and mortgages without recourse, except
that notes and mortgages may be assigned with recourse to any federal
home loan bank of which the association is a member.
(s) Subject to such
prohibitions, limitations and conditions as the commissioner may prescribe,
the following loans or investments are permitted:
(1) An association may make commercial real estate loans on the security
of liens upon other improved real estate. The resulting aggregate
of such loans shall not exceed an amount equal to 40% of such association's assets;
(2) an association may make secured or unsecured loans for personal, family
or household purposes, including loans reasonably incident to the provision
of such credit, and may invest in, sell or hold commercial paper
and corporate debt securities, as defined and approved by the commissioner.
The resulting aggregate of such loans shall not exceed an amount equal
to 30% of such association's assets;
(3) an association may invest in tangible personal property, including,
without limitation, vehicles, manufactured homes, machinery, equipment or
furniture, for rental or sale. The resulting aggregate of such investments
shall not exceed an amount equal to 10% of such association's assets;
(4) an association may make secured or unsecured loans for commercial,
corporate, business or agriculture purposes. No association may make loans
to one borrower under the authority of this paragraph in excess of the amount
a national bank having identical total capital and surplus could lend such
borrower. The resulting aggregate of such loans made by an association
and by a corporation owned by the association under paragraph (2) of subsection
(z) of this section shall not exceed an amount equal to 5% of such association's
assets prior to January 1, 1984, or 10% of such association's assets thereafter.
(t) Any association may, upon adoption of such a loan plan by its
board of directors, make or purchase:
(1) Any unsecured loan at least
20% of which is
guaranteed under the provisions of the servicemen's readjustment act of
1944, as now or hereafter amended;
(2) simple interest, discount or gross charge loans for property
alteration, repair, equipping or improvement without the security of a
lien upon such property, subject to such prohibitions, limitations and
conditions as the commissioner may by regulation prescribe. The
resulting aggregate amount of all such loans shall not exceed an amount
equal to 20% of such association's assets. No
association may make any unsecured loan to a director, officer or
employee of the association, or to any person or firm regularly serving
the association in the capacity of attorney, except for the
alteration, repair, equipping or improvement of the home or combination
of home and business property owned and occupied by such borrowing
director, officer, employee, attorney or firm;
(3) line of credit real estate loans for home property, secured or
unsecured, subject to such prohibitions, limitations and conditions as
the commissioner may by regulation prescribe. The resulting aggregate
amount of all such loans shall not exceed an amount greater than 5%
of the association's assets or all of its net worth accounts.
(u) Subject to such prohibitions, limitations and conditions as the
commissioner may by regulation prescribe, any such association may sell
to, purchase from or participate with other lenders in loans of any type
that such an association may otherwise make if the other participants
are approved federal housing administration lenders, instrumentalities
or corporations owned wholly or in part by the United States or this
state, or are associations or corporations insured by the federal
savings and loan association corporation or the federal deposit
insurance corporation. Such loans may be outside the regular lending
area of such association.
(v) Subject to such prohibitions, limitations and conditions as the commissioner
may by regulation prescribe, the following loans or investments are permitted,
but the authority conferred in the following paragraphs is limited to an
amount not to exceed 5% of the assets of the association for each paragraph:
(1) Loans made for the payment of educational expenses;
(2) investments in real property and obligations secured by liens on real
property located within a geographic area or neighborhood receiving concentrated
development assistance by a local government under title I of the housing
and community development act of 1974, except that no investment under this
paragraph in such real property may exceed an aggregate investment of 2%
of the assets of the association;
(3) loans upon the security of or respecting real property or interests
therein used for primarily residential or farm purposes that do not otherwise
comply with the limitations of this section;
(4) investments not exceeding the greater of: (A) The sum of the association's
net worth accounts; or (B) five percent of the assets of the association,
in loans the principal purpose of which is to provide financing with respect
to what is or is expected to become primarily residential real estate where:
(i) The association relies substantially for repayment on the borrower's
general credit standing and forecast of income without other security; or
(ii) the association relies on other assurances for repayment, including
but not limited to a guaranty or similar obligation of a third party. Investments
under this subsection shall not be included in any percentage of assets
or other percentage referred to in this section.
(w) Subject to such prohibitions, limitations and conditions as the
commissioner may by regulation prescribe, any such association may make
any loan for the purpose of mobile home financing.
(x) Subject to such prohibitions, limitations and conditions as the
commissioner may by regulation prescribe, any such association may
maintain safety deposit boxes and rent the same for public use.
(y) Subject to such prohibitions, limitations and conditions as the commissioner
may by regulation prescribe, any such association may issue credit cards,
extend credit in connection therewith, and otherwise engage
in or participate in credit card operations.
(z) Subject to such prohibitions, limitations and conditions as the commissioner
may by regulation prescribe, any such association shall have the power and
authority to make the following additional loans and other investments to
the extent authorized as follows:
(1) An association whose net worth accounts in the aggregate exceed 5%
of its withdrawable capital is authorized to invest in, lend to or to commit
itself to lend to, any business development credit corporation incorporated
in the state of Kansas, but the aggregate amount of such investments,
loans and commitments of any such association shall not exceed 1/2%
of the total outstanding loans of the association or $250,000, whichever is less;
(2) investments in the capital stock, obligations or other securities
of any corporation organized under the laws of the state of Kansas, if the
entire capital stock of such corporation is available for purchase only
by savings and loan associations of Kansas and by federal associations having
their home offices in the state of Kansas. No association may make any
investment under this paragraph if its aggregate outstanding investment
under this paragraph would exceed 3% of the assets of the association.
Any investment permitted under this
paragraph which exceeds 2% of assets shall be used primarily
for community, inner-city or community development purposes;
(3) investments in: (A) Loans secured by mortgages for which the association
has the benefit of insurance under title X of the national housing act or
of a commitment or agreement for such insurance;
(B) investments in housing project loans having the benefit of any guaranty
under section 221 of the foreign assistance act of 1961 or loans having
the benefit of any guaranty under section 224 of such act, or any commitment
or agreement with respect to such loans made pursuant to either of such
sections and in the share capital and capital reserve of the inter-American
savings and loan bank. This authority extends to the acquisition, holding,
and disposition of loans having the benefit of any guaranty under section
221 or 222 of such act, or of any commitment or agreement for any such guaranty;
(C) investments under subparagraph (A) of this paragraph shall not be
included in any percentage of assets or other percentage referred to in
this subsection. Investments under subparagraph (B) of this paragraph shall
not exceed, in the case of any association, 1% of the assets of such association;
(4) an association whose net worth in aggregate exceeds that amount which
is determined by the national housing act is authorized to invest in obligations
which constitute prudent investments, as defined by the commissioner, of
Kansas and its political subdivisions thereof, including any agency, corporation
or instrumentality if the proceeds of such obligations are to be used for
rehabilitation, financing or the construction of residential real estate,
and the aggregate amount of all investments under this paragraph shall not
exceed the amount of the association's net worth accounts.
(aa) Subject to such prohibitions, limitations and conditions as the commissioner
may by regulation provide an association may engage in financial
futures transactions and financial options transactions.
(bb) Subject to such prohibitions, limitations and conditions as the commissioner
may by regulation provide an association may establish or maintain a data
processing office with functions limited to providing data processing services
for its own use or primarily for other depository institutions without observing
the application and approval procedures for branch offices as provided for
in K.S.A. 17-5225, and amendments thereto. An association may participate
with others in establishing or maintaining a data processing office, except
that the association may participate in establishing or maintaining
a data processing office controlled by an entity not subject to a federal
or state agency regulating financial institutions only if such entity has
agreed in writing with the commissioner that it will permit and pay for
such examination of the office as the commissioner deems necessary, and
that it will make available for such purposes any records in its possession
relating to the operation of the office.
(cc) Subject to such prohibitions, limitations and conditions as the commissioner
may by regulation provide an association may provide correspondent
services primarily to other depository institutions. An association may
receive noninterest-bearing deposits from correspondent institutions for
use as compensating balances, for settlement purposes or for other purposes
incidental to a correspondent relationship. Such deposits may be payable
on demand and subject to withdrawal by negotiable or transferable instrument,
order or authorization. Such deposits shall not give rise to voting rights
or other rights of membership in a mutual association. An association may
maintain a noninterest-bearing account at any institution whose accounts
are insured by the federal savings and loan insurance corporation or the
federal deposit insurance corporation, and an association may maintain such
an account at an institution whose accounts are insured pursuant to a state
deposit insurance program if such account is necessary or incidental to
a correspondent relationship.
(dd) (1) Subject to such prohibitions, limitations and conditions as
the commissioner may by regulation provide an association:
(A) May become
the legal or beneficial owner of tangible personal property or real property
for the purpose of leasing such property;
(B) may obtain an assignment of
a lessor's interest in a lease of such property; and
(C) may incur obligations
incidental to its position as the legal or beneficial owner and lessor of
the leased property if the lease is a net, full-payout lease representing
a noncancelable obligation of the lessee, notwithstanding the possible early
termination of the lease and at the expiration of the lease, the association's
interest in the property shall be liquidated or released on a net basis
as soon as practicable;
(2) a lease of tangible personal property made to a natural person for
personal, family or household purposes pursuant to this subsection shall
be subject to all limitations applicable to the amount of an association's
investment in consumer loans. A lease made for commercial, corporate, business
or agricultural purposes pursuant to this subsection shall be subject to
all limitations applicable to the amount of an association's investment
in commercial loans. A lease of residential or commercial real property
made pursuant to this subsection shall be subject to all limitations applicable
to the amount of an association's investment in residential or commercial
real property loans;
(3) for the purposes of this subsection:
(A) "Net lease" means a lease under which the association will not,
directly or indirectly, provide or be obligated to provide for:
(i) The servicing, repair or maintenance of the leased property during
the lease term;
(ii) the purchasing of parts and accessories for the leased property,
except that improvements and additions to the lease property may be leased
to the lessee upon its request in accordance with the full-payout requirements
of this section;
(iii) the loan of replacement or substitute property while the leased
property is being serviced;
(iv) the purchasing of insurance for the lessee, except where the lessee
has failed to discharge a contractual obligation to purchase or maintain insurance; or
(v) the renewal of any license, registration or filing for the property
unless such action by the association is necessary to protect its interest
as an owner or financer of the property;
(B) "full-payout lease" means a lease from which the lessor can reasonably
expect to realize a return of its full investment in the leased property,
plus the estimated cost of financing the property over the term of the lease,
from rentals, estimated tax benefits and the estimated residual value of
the property at the expiration of the initial term of the lease. The estimated
residual value of the property shall not exceed 25% for personal property
or 20% for real property, of the acquisition cost of the property to the
lessor unless the estimated residual value is guaranteed by a manufacturer,
the lessee or a third party not an affiliate of the association and the
association makes the determination that the guarantor has the resources
to meet the guarantee. In all cases, however, both the estimated residual
value of the property and that portion of the estimated residual value relied
upon by the lessor to satisfy the requirements of a full-payout lease must
be reasonable in light of the nature of the leased property and all relevant
circumstances so that realization of the lessor's full investment plus the
cost of financing the property depends primarily on the creditworthiness
of the lessee and of any guarantor of the residual value, and on the residual
market value of the leased property. The maximum term of a full-payout
lease shall be 40 years;
(4) if, in good faith, an association believes that there has been an
unanticipated change in conditions which threaten its financial position
by significantly increasing its exposure to loss, the provisions of this
subsection shall not prevent the association:
(A) As the owner and lessor under a net, full-payout lease, from taking
reasonable and appropriate action to salvage or protect the value of the
property of its interest arising under the lease;
(B) as the assignee of a lessor's interest in a lease, from becoming
the owner and lessor of the leased property pursuant to its contractual
right, or from taking any reasonable and appropriate action to salvage or
protect the value of the property or its interest arising under the lease; or
(C) from including any provisions in a lease, or from making any additional
agreements, to protect its financial position or investment in the circumstances
set forth in this paragraph.
History: L. 1943, ch. 133, § 79; L. 1947, ch. 188, § 1; L.
1949, ch. 193, § 1; L. 1955, ch. 140, § 3; L. 1961, ch. 125, § 2; L.
1963, ch. 145, § 1; L. 1965, ch. 156, § 3; L. 1969, ch. 131, § 3; L.
1971, ch. 82, § 1; L. 1972, ch. 68, § 1; L. 1973, ch. 97, § 1; L.
1975, ch. 141, § 1; L. 1975, ch. 142, § 3; L. 1978, ch. 83, § 1;
L. 1981, ch. 105, § 5; L. 1983, ch. 86, § 3; April 21.