§ 6.2-1186. (Effective October 1, 2010) General investment authority of statesavings institutions.
A. Subject to the powers and limitations regarding real estate loans setforth in § 6.2-1179, and except as provided in § 6.2-1187 with respect tostate savings banks, the assets of a state savings institution may beinvested only:
1. In real and personal property necessary for the conduct of its businessand in real estate to be held for its future accommodation. A savingsinstitution may invest in an office building or buildings and appurtenancesfor the transaction of its business, or for the transaction of such businessand for rental. Except as provided in § 6.2-1187 with respect to savingsbanks, no such investment described in the preceding sentence may be madewithout the prior approval of the Commissioner if the total amount of theinvestment exceeds 50 percent of capital stock paid-in and unimpaired and 50percent of unimpaired combined surplus and undivided profits, or, in the caseof a mutual association, 50 percent of general reserve and surplus;
2. In stock and other securities or obligations of a service corporation.Unless specifically authorized by the Commissioner, a state savingsinstitution shall not invest more than 10 percent, in the aggregate, of itsassets in the investments specified in this subdivision. A servicecorporation may charge and collect such finance charges, fees and interestrates as state savings institutions are authorized to charge and collect. Aservice corporation, directly or indirectly, may engage in providing realestate brokerage services for property owned by a state savings institutionowning capital stock in the service corporation, by the service corporation,or a joint venture in which the service corporation is a participant, but noservice corporation, state savings institution or holding company that hascontrol, as defined in § 6.2-701, over a state savings institution may engagedirectly or indirectly in providing real estate brokerage services forproperty owned by third parties. Nothing in this subdivision shall prohibit(i) a state savings bank or its affiliates or (ii) a holding company that hascontrol over a state savings institution from engaging in third party realestate brokerage in any state, other than the Commonwealth, that permits suchactivities by its state chartered savings institutions, or their affiliatesor holding companies;
3. If the savings institution is a state association, in the purchase of realestate for the purpose of producing income or for inventory and sale or forimprovement including the erection of buildings thereon, for sale or rentalpurposes, and such an association may hold, sell, lease, operate or otherwiseexercise the rights of an owner of any such property. Unless specificallyauthorized by the Commissioner, a state association shall not invest morethan 10 percent, in the aggregate, of its assets in the investments specifiedin this subdivision;
4. In obligations that are fully guaranteed as to principal and interest bythe United States or the Commonwealth;
5. In stock or obligations of any Federal Home Loan Bank or Federal ReserveBank;
6. In obligations of, or issued by, any other state or political subdivisionthereof, so long as such obligations continue to hold one of the four highestnational investment grade ratings;
7. In obligations of, or issued by, any locality, district, or otherpolitical subdivision of the Commonwealth, or any public instrumentality orpublic authority created by act of the General Assembly, so long as suchobligations continue to hold one of the four highest national investmentgrade ratings;
8. If the savings institution is a state association, in deposits in banksfor savings and loan associations;
9. In stock, obligations or other instruments of the Federal NationalMortgage Association, Government National Mortgage Association, Federal HomeLoan Mortgage Corporation, or any successor thereto;
10. In obligations of, or guaranteed as to principal and interest by, Canadaor any province thereof, provided that the principal and interest of any suchobligations are payable in United States funds;
11. In demand, time, or savings deposits, shares or accounts, or otherobligations of any financial institution the accounts of which are insured bya federal agency or other insurer approved by the Commissioner;
12. In bankers' acceptances that are eligible for purchase by Federal ReserveBanks;
13. In loans to individuals for personal, family or household purposes andloans reasonably incident thereto, including loans to dealers in consumergoods for purposes of financing inventory and floor planning. Such loans maybe evidenced by installment consumer paper that is transferred to a savingsinstitution by an endorser or guarantor, provided that such paper shall carrya full or limited endorsement or guarantee of the person transferring thesame and the savings institution shall have a certificate of a responsibleofficer designated by its board for that purpose stating that theresponsibility of the maker of such obligation has been evaluated and thesavings institution is relying primarily upon such maker for the payment ofsuch obligation;
14. Loans secured by savings accounts of the association;
15. In unsecured single payment personal loans to individuals with a term ofnot more than 12 months;
16. In personal property, which term as used herein shall include fixtures,acquired upon the specific request of and for lease to a customer, subject tothe following limitations:
a. The rentals receivable by the association under the initial lease of anyitem of personal property shall at least equal the cost to the savingsinstitution of such item of personal property;
b. The savings institution shall have a certificate of a responsible officerdesignated by its board for that purpose stating that the responsibility ofthe lessee has been evaluated and approved by such officer; and
c. Upon the expiration of any lease, whether by virtue of the lease agreementor by virtue of the retaking of possession by the association, such personalproperty shall be relet, sold or otherwise disposed of, or charged off withinone year from the time of expiration of such lease;
17. In secured or unsecured credit to cover payment of checks, drafts orother fund transfer orders in excess of the available balance of an accounton which they are drawn. Such extensions of credit must be paid off within 30days after the extension of credit is made. The 30-day limitation onrepayment shall apply only to inadvertent overdrafts by the account owner,and shall not apply to extensions of credit, agreed upon in writing, wherebythe borrower is permitted to access the line of credit by check, draft orother fund transfer order;
18. In loans for commercial, corporate, business or agricultural purposes.Unless specifically authorized by the Commissioner, (i) a state associationshall not invest more than 10 percent of its assets, and (ii) a state savingsbank shall not invest more than 20 percent of its assets, in loans forcommercial, corporate, business or agricultural purposes. Thepercentage-of-assets limitations in the preceding sentence shall not apply tooverdraft loans, commercial real estate loans, loans to a service corporationthe stock of which is owned by the savings institution, or loans to dealersin consumer goods for inventory or floor planning financing;
19. In commercial paper rated in the highest or second highest categories asof the date of purchase, as shown by the most recently published rating by atleast two nationally recognized investment rating services;
20. In corporate debt securities, including corporate debt securitiesconvertible into stock, that may be sold with reasonable promptness at aprice that corresponds reasonably to their fair market value, and that arerated in at least the third highest category by a nationally recognizedinvestment rating service in its most recently published ratings before thedate of purchase of the security;
21. In shares in open-end management investment companies; and
22. Any other obligations, instruments or investments that are specificallyapproved by the Commissioner.
B. In addition to the items authorized by subsection A, a state savingsinstitution may:
1. Issue credit cards, extend credit in connection therewith, and otherwiseengage in or participate in credit card operations; and
2. Issue commercial and standby letters of credit in conformance with theUniform Commercial Code (§ 8.1A-101 et seq.) or the Uniform Customs andPractice for Documentary Credits published as International Chamber ofCommerce publication No. 600, and may pledge collateral to secure itsobligations thereunder, subject to the following requirements:
a. Each letter of credit shall conspicuously state that it is a letter ofcredit;
b. The issuer's undertaking shall contain a specified expiration date or befor a definite term, and shall be limited in amount;
c. The issuer's obligation to pay shall be solely dependent upon thepresentation of conforming documents as specified in the letter of credit,and not upon the factual performance or nonperformance by the parties to theunderlying transaction; and
d. The account party shall have an unqualified obligation to reimburse theissuer for payments made under the letter of credit.
C. The Commission may adopt such regulations as may be required to preventexcessive aggregate amounts of lending by an association to any oneindividual or entity.
(Code 1950, § 6-201.29; 1960, c. 402; 1962, c. 170; 1964, c. 151; 1966, c.584, § 6.1-157; 1968, c. 255; 1970, c. 237; 1972, c. 796, § 6.1-195.34; 1974,c. 284; 1975, c. 448; 1976, cc. 263, 487; 1977, c. 140; 1978, c. 351; 1979,c. 81; 1980, c. 706; 1981, c. 59; 1982, c. 209; 1983, c. 447; 1985, c. 425, §6.1-194.69; 1986, c. 509; 1988, c. 4; 1989, cc. 28, 396, 626; 1990, c. 3;1991, c. 230, § 6.1-194.136; 1992, c. 51; 1994, c. 330; 2003, c. 353; 2010,c. 794.)
§ 6.2-1186. (Effective October 1, 2010) General investment authority of statesavings institutions.
A. Subject to the powers and limitations regarding real estate loans setforth in § 6.2-1179, and except as provided in § 6.2-1187 with respect tostate savings banks, the assets of a state savings institution may beinvested only:
1. In real and personal property necessary for the conduct of its businessand in real estate to be held for its future accommodation. A savingsinstitution may invest in an office building or buildings and appurtenancesfor the transaction of its business, or for the transaction of such businessand for rental. Except as provided in § 6.2-1187 with respect to savingsbanks, no such investment described in the preceding sentence may be madewithout the prior approval of the Commissioner if the total amount of theinvestment exceeds 50 percent of capital stock paid-in and unimpaired and 50percent of unimpaired combined surplus and undivided profits, or, in the caseof a mutual association, 50 percent of general reserve and surplus;
2. In stock and other securities or obligations of a service corporation.Unless specifically authorized by the Commissioner, a state savingsinstitution shall not invest more than 10 percent, in the aggregate, of itsassets in the investments specified in this subdivision. A servicecorporation may charge and collect such finance charges, fees and interestrates as state savings institutions are authorized to charge and collect. Aservice corporation, directly or indirectly, may engage in providing realestate brokerage services for property owned by a state savings institutionowning capital stock in the service corporation, by the service corporation,or a joint venture in which the service corporation is a participant, but noservice corporation, state savings institution or holding company that hascontrol, as defined in § 6.2-701, over a state savings institution may engagedirectly or indirectly in providing real estate brokerage services forproperty owned by third parties. Nothing in this subdivision shall prohibit(i) a state savings bank or its affiliates or (ii) a holding company that hascontrol over a state savings institution from engaging in third party realestate brokerage in any state, other than the Commonwealth, that permits suchactivities by its state chartered savings institutions, or their affiliatesor holding companies;
3. If the savings institution is a state association, in the purchase of realestate for the purpose of producing income or for inventory and sale or forimprovement including the erection of buildings thereon, for sale or rentalpurposes, and such an association may hold, sell, lease, operate or otherwiseexercise the rights of an owner of any such property. Unless specificallyauthorized by the Commissioner, a state association shall not invest morethan 10 percent, in the aggregate, of its assets in the investments specifiedin this subdivision;
4. In obligations that are fully guaranteed as to principal and interest bythe United States or the Commonwealth;
5. In stock or obligations of any Federal Home Loan Bank or Federal ReserveBank;
6. In obligations of, or issued by, any other state or political subdivisionthereof, so long as such obligations continue to hold one of the four highestnational investment grade ratings;
7. In obligations of, or issued by, any locality, district, or otherpolitical subdivision of the Commonwealth, or any public instrumentality orpublic authority created by act of the General Assembly, so long as suchobligations continue to hold one of the four highest national investmentgrade ratings;
8. If the savings institution is a state association, in deposits in banksfor savings and loan associations;
9. In stock, obligations or other instruments of the Federal NationalMortgage Association, Government National Mortgage Association, Federal HomeLoan Mortgage Corporation, or any successor thereto;
10. In obligations of, or guaranteed as to principal and interest by, Canadaor any province thereof, provided that the principal and interest of any suchobligations are payable in United States funds;
11. In demand, time, or savings deposits, shares or accounts, or otherobligations of any financial institution the accounts of which are insured bya federal agency or other insurer approved by the Commissioner;
12. In bankers' acceptances that are eligible for purchase by Federal ReserveBanks;
13. In loans to individuals for personal, family or household purposes andloans reasonably incident thereto, including loans to dealers in consumergoods for purposes of financing inventory and floor planning. Such loans maybe evidenced by installment consumer paper that is transferred to a savingsinstitution by an endorser or guarantor, provided that such paper shall carrya full or limited endorsement or guarantee of the person transferring thesame and the savings institution shall have a certificate of a responsibleofficer designated by its board for that purpose stating that theresponsibility of the maker of such obligation has been evaluated and thesavings institution is relying primarily upon such maker for the payment ofsuch obligation;
14. Loans secured by savings accounts of the association;
15. In unsecured single payment personal loans to individuals with a term ofnot more than 12 months;
16. In personal property, which term as used herein shall include fixtures,acquired upon the specific request of and for lease to a customer, subject tothe following limitations:
a. The rentals receivable by the association under the initial lease of anyitem of personal property shall at least equal the cost to the savingsinstitution of such item of personal property;
b. The savings institution shall have a certificate of a responsible officerdesignated by its board for that purpose stating that the responsibility ofthe lessee has been evaluated and approved by such officer; and
c. Upon the expiration of any lease, whether by virtue of the lease agreementor by virtue of the retaking of possession by the association, such personalproperty shall be relet, sold or otherwise disposed of, or charged off withinone year from the time of expiration of such lease;
17. In secured or unsecured credit to cover payment of checks, drafts orother fund transfer orders in excess of the available balance of an accounton which they are drawn. Such extensions of credit must be paid off within 30days after the extension of credit is made. The 30-day limitation onrepayment shall apply only to inadvertent overdrafts by the account owner,and shall not apply to extensions of credit, agreed upon in writing, wherebythe borrower is permitted to access the line of credit by check, draft orother fund transfer order;
18. In loans for commercial, corporate, business or agricultural purposes.Unless specifically authorized by the Commissioner, (i) a state associationshall not invest more than 10 percent of its assets, and (ii) a state savingsbank shall not invest more than 20 percent of its assets, in loans forcommercial, corporate, business or agricultural purposes. Thepercentage-of-assets limitations in the preceding sentence shall not apply tooverdraft loans, commercial real estate loans, loans to a service corporationthe stock of which is owned by the savings institution, or loans to dealersin consumer goods for inventory or floor planning financing;
19. In commercial paper rated in the highest or second highest categories asof the date of purchase, as shown by the most recently published rating by atleast two nationally recognized investment rating services;
20. In corporate debt securities, including corporate debt securitiesconvertible into stock, that may be sold with reasonable promptness at aprice that corresponds reasonably to their fair market value, and that arerated in at least the third highest category by a nationally recognizedinvestment rating service in its most recently published ratings before thedate of purchase of the security;
21. In shares in open-end management investment companies; and
22. Any other obligations, instruments or investments that are specificallyapproved by the Commissioner.
B. In addition to the items authorized by subsection A, a state savingsinstitution may:
1. Issue credit cards, extend credit in connection therewith, and otherwiseengage in or participate in credit card operations; and
2. Issue commercial and standby letters of credit in conformance with theUniform Commercial Code (§ 8.1A-101 et seq.) or the Uniform Customs andPractice for Documentary Credits published as International Chamber ofCommerce publication No. 600, and may pledge collateral to secure itsobligations thereunder, subject to the following requirements:
a. Each letter of credit shall conspicuously state that it is a letter ofcredit;
b. The issuer's undertaking shall contain a specified expiration date or befor a definite term, and shall be limited in amount;
c. The issuer's obligation to pay shall be solely dependent upon thepresentation of conforming documents as specified in the letter of credit,and not upon the factual performance or nonperformance by the parties to theunderlying transaction; and
d. The account party shall have an unqualified obligation to reimburse theissuer for payments made under the letter of credit.
C. The Commission may adopt such regulations as may be required to preventexcessive aggregate amounts of lending by an association to any oneindividual or entity.
(Code 1950, § 6-201.29; 1960, c. 402; 1962, c. 170; 1964, c. 151; 1966, c.584, § 6.1-157; 1968, c. 255; 1970, c. 237; 1972, c. 796, § 6.1-195.34; 1974,c. 284; 1975, c. 448; 1976, cc. 263, 487; 1977, c. 140; 1978, c. 351; 1979,c. 81; 1980, c. 706; 1981, c. 59; 1982, c. 209; 1983, c. 447; 1985, c. 425, §6.1-194.69; 1986, c. 509; 1988, c. 4; 1989, cc. 28, 396, 626; 1990, c. 3;1991, c. 230, § 6.1-194.136; 1992, c. 51; 1994, c. 330; 2003, c. 353; 2010,c. 794.)
§ 6.2-1186. (Effective October 1, 2010) General investment authority of statesavings institutions.
A. Subject to the powers and limitations regarding real estate loans setforth in § 6.2-1179, and except as provided in § 6.2-1187 with respect tostate savings banks, the assets of a state savings institution may beinvested only:
1. In real and personal property necessary for the conduct of its businessand in real estate to be held for its future accommodation. A savingsinstitution may invest in an office building or buildings and appurtenancesfor the transaction of its business, or for the transaction of such businessand for rental. Except as provided in § 6.2-1187 with respect to savingsbanks, no such investment described in the preceding sentence may be madewithout the prior approval of the Commissioner if the total amount of theinvestment exceeds 50 percent of capital stock paid-in and unimpaired and 50percent of unimpaired combined surplus and undivided profits, or, in the caseof a mutual association, 50 percent of general reserve and surplus;
2. In stock and other securities or obligations of a service corporation.Unless specifically authorized by the Commissioner, a state savingsinstitution shall not invest more than 10 percent, in the aggregate, of itsassets in the investments specified in this subdivision. A servicecorporation may charge and collect such finance charges, fees and interestrates as state savings institutions are authorized to charge and collect. Aservice corporation, directly or indirectly, may engage in providing realestate brokerage services for property owned by a state savings institutionowning capital stock in the service corporation, by the service corporation,or a joint venture in which the service corporation is a participant, but noservice corporation, state savings institution or holding company that hascontrol, as defined in § 6.2-701, over a state savings institution may engagedirectly or indirectly in providing real estate brokerage services forproperty owned by third parties. Nothing in this subdivision shall prohibit(i) a state savings bank or its affiliates or (ii) a holding company that hascontrol over a state savings institution from engaging in third party realestate brokerage in any state, other than the Commonwealth, that permits suchactivities by its state chartered savings institutions, or their affiliatesor holding companies;
3. If the savings institution is a state association, in the purchase of realestate for the purpose of producing income or for inventory and sale or forimprovement including the erection of buildings thereon, for sale or rentalpurposes, and such an association may hold, sell, lease, operate or otherwiseexercise the rights of an owner of any such property. Unless specificallyauthorized by the Commissioner, a state association shall not invest morethan 10 percent, in the aggregate, of its assets in the investments specifiedin this subdivision;
4. In obligations that are fully guaranteed as to principal and interest bythe United States or the Commonwealth;
5. In stock or obligations of any Federal Home Loan Bank or Federal ReserveBank;
6. In obligations of, or issued by, any other state or political subdivisionthereof, so long as such obligations continue to hold one of the four highestnational investment grade ratings;
7. In obligations of, or issued by, any locality, district, or otherpolitical subdivision of the Commonwealth, or any public instrumentality orpublic authority created by act of the General Assembly, so long as suchobligations continue to hold one of the four highest national investmentgrade ratings;
8. If the savings institution is a state association, in deposits in banksfor savings and loan associations;
9. In stock, obligations or other instruments of the Federal NationalMortgage Association, Government National Mortgage Association, Federal HomeLoan Mortgage Corporation, or any successor thereto;
10. In obligations of, or guaranteed as to principal and interest by, Canadaor any province thereof, provided that the principal and interest of any suchobligations are payable in United States funds;
11. In demand, time, or savings deposits, shares or accounts, or otherobligations of any financial institution the accounts of which are insured bya federal agency or other insurer approved by the Commissioner;
12. In bankers' acceptances that are eligible for purchase by Federal ReserveBanks;
13. In loans to individuals for personal, family or household purposes andloans reasonably incident thereto, including loans to dealers in consumergoods for purposes of financing inventory and floor planning. Such loans maybe evidenced by installment consumer paper that is transferred to a savingsinstitution by an endorser or guarantor, provided that such paper shall carrya full or limited endorsement or guarantee of the person transferring thesame and the savings institution shall have a certificate of a responsibleofficer designated by its board for that purpose stating that theresponsibility of the maker of such obligation has been evaluated and thesavings institution is relying primarily upon such maker for the payment ofsuch obligation;
14. Loans secured by savings accounts of the association;
15. In unsecured single payment personal loans to individuals with a term ofnot more than 12 months;
16. In personal property, which term as used herein shall include fixtures,acquired upon the specific request of and for lease to a customer, subject tothe following limitations:
a. The rentals receivable by the association under the initial lease of anyitem of personal property shall at least equal the cost to the savingsinstitution of such item of personal property;
b. The savings institution shall have a certificate of a responsible officerdesignated by its board for that purpose stating that the responsibility ofthe lessee has been evaluated and approved by such officer; and
c. Upon the expiration of any lease, whether by virtue of the lease agreementor by virtue of the retaking of possession by the association, such personalproperty shall be relet, sold or otherwise disposed of, or charged off withinone year from the time of expiration of such lease;
17. In secured or unsecured credit to cover payment of checks, drafts orother fund transfer orders in excess of the available balance of an accounton which they are drawn. Such extensions of credit must be paid off within 30days after the extension of credit is made. The 30-day limitation onrepayment shall apply only to inadvertent overdrafts by the account owner,and shall not apply to extensions of credit, agreed upon in writing, wherebythe borrower is permitted to access the line of credit by check, draft orother fund transfer order;
18. In loans for commercial, corporate, business or agricultural purposes.Unless specifically authorized by the Commissioner, (i) a state associationshall not invest more than 10 percent of its assets, and (ii) a state savingsbank shall not invest more than 20 percent of its assets, in loans forcommercial, corporate, business or agricultural purposes. Thepercentage-of-assets limitations in the preceding sentence shall not apply tooverdraft loans, commercial real estate loans, loans to a service corporationthe stock of which is owned by the savings institution, or loans to dealersin consumer goods for inventory or floor planning financing;
19. In commercial paper rated in the highest or second highest categories asof the date of purchase, as shown by the most recently published rating by atleast two nationally recognized investment rating services;
20. In corporate debt securities, including corporate debt securitiesconvertible into stock, that may be sold with reasonable promptness at aprice that corresponds reasonably to their fair market value, and that arerated in at least the third highest category by a nationally recognizedinvestment rating service in its most recently published ratings before thedate of purchase of the security;
21. In shares in open-end management investment companies; and
22. Any other obligations, instruments or investments that are specificallyapproved by the Commissioner.
B. In addition to the items authorized by subsection A, a state savingsinstitution may:
1. Issue credit cards, extend credit in connection therewith, and otherwiseengage in or participate in credit card operations; and
2. Issue commercial and standby letters of credit in conformance with theUniform Commercial Code (§ 8.1A-101 et seq.) or the Uniform Customs andPractice for Documentary Credits published as International Chamber ofCommerce publication No. 600, and may pledge collateral to secure itsobligations thereunder, subject to the following requirements:
a. Each letter of credit shall conspicuously state that it is a letter ofcredit;
b. The issuer's undertaking shall contain a specified expiration date or befor a definite term, and shall be limited in amount;
c. The issuer's obligation to pay shall be solely dependent upon thepresentation of conforming documents as specified in the letter of credit,and not upon the factual performance or nonperformance by the parties to theunderlying transaction; and
d. The account party shall have an unqualified obligation to reimburse theissuer for payments made under the letter of credit.
C. The Commission may adopt such regulations as may be required to preventexcessive aggregate amounts of lending by an association to any oneindividual or entity.
(Code 1950, § 6-201.29; 1960, c. 402; 1962, c. 170; 1964, c. 151; 1966, c.584, § 6.1-157; 1968, c. 255; 1970, c. 237; 1972, c. 796, § 6.1-195.34; 1974,c. 284; 1975, c. 448; 1976, cc. 263, 487; 1977, c. 140; 1978, c. 351; 1979,c. 81; 1980, c. 706; 1981, c. 59; 1982, c. 209; 1983, c. 447; 1985, c. 425, §6.1-194.69; 1986, c. 509; 1988, c. 4; 1989, cc. 28, 396, 626; 1990, c. 3;1991, c. 230, § 6.1-194.136; 1992, c. 51; 1994, c. 330; 2003, c. 353; 2010,c. 794.)
