6.1-194.69 - (Repealed effective October 1, 2010) General investment authority.
§ 6.1-194.69. (Repealed effective October 1, 2010) General investmentauthority.
Subject to the powers and limitations set forth in § 6.1-194.62, the assetsof a state association may be invested only in the following ways:
1. In real and personal property necessary for the conduct of its businessand in real estate to be held for its future accommodation. Such associationmay invest in an office building or buildings and appurtenances for thetransaction of such association's business, or for the transaction of suchbusiness and for rental. No such investment may be made without the priorapproval of the Commissioner if the total amount of the investment exceeds 50percent of capital stock paid-in and unimpaired and 50 percent of unimpairedcombined surplus and undivided profits, or, in the case of a mutualassociation, 50 percent of general reserve and surplus.
2. In stock and other securities or obligations of a service corporation orcorporations. Such service corporation or corporations may charge and collectsuch finance charges, fees and interest rates as are authorized to stateassociations. Such service corporation or corporations, directly orindirectly, may engage in providing real estate brokerage services forproperty owned by an association owning capital stock in the servicecorporation, by the service corporation, or a joint venture in which theservice corporation is a participant, but no service corporation orcorporations, state association or holding company which has control, asdefined in § 6.1-381, over a state association may engage directly orindirectly in providing real estate brokerage services for property owned bythird parties; provided that any such holding company may consummate theacquisition of, and thereafter own, a corporation that engages in providingreal estate brokerage services for property owned by third parties if, on orbefore January 23, 1989, it filed an application with the State CorporationCommission with respect to such acquisition and if the Commissionsubsequently approves such acquisition. The Commission shall approve ordisapprove such an acquisition on its merits before or after July 1, 1989,without regard to the prohibition contained in this section and, for purposesof the preceding sentence, any application submitted to the Commission on orbefore January 23, 1989, shall be deemed filed as of the date of submission,without regard to any subsequent amendment, rescission or withdrawal of anyregulation of the Commission. Nothing herein shall prohibit a holding companythat has control over a state association from engaging in third party realestate brokerage in any state, other than the Commonwealth of Virginia, thatpermits such activities by its state chartered savings institutions, or theiraffiliates or holding companies.
3. In the purchase of real estate for the purpose of producing income or forinventory and sale or for improvement including the erection of buildingsthereon, for sale or rental purposes, and such an association may hold, sell,lease, operate or otherwise exercise the rights of an owner of any suchproperty.
4. Unless specifically authorized by the Commissioner, a state associationshall not invest more than 10 percent, in the aggregate, of its assets in theinvestments specified in subdivisions 2 and 3 of this section.
5. In obligations which are fully guaranteed as to principal and interest bythe United States or the Commonwealth; in stock or obligations of any FederalHome Loan Bank or Banks; in stock or obligations of Federal Reserve Banks; inobligations of, or issued by, any other state, territory or possession of theUnited States or political subdivision thereof, so long as such obligationscontinue to hold one of the four highest national investment grade ratings;in obligations of, or issued by, any city, town, county, district or othermunicipal corporation or political subdivision of the Commonwealth, or anypublic instrumentality or public authority created by act of the GeneralAssembly, so long as such obligations continue to hold one of the fourhighest national investment grade ratings; in deposits in banks for savingsand loan associations; in stock, obligations or other instruments of theFederal National Mortgage Association, Government National MortgageAssociation, Federal Home Loan Mortgage Corporation, or any successor orsuccessors thereto; in obligations of, or guaranteed as to principal andinterest by, Canada or any province thereof, provided that the principal andinterest of any such obligations are payable in United States funds; indemand, time, or savings deposits, shares or accounts, or other obligationsof any financial institution the accounts of which are insured by a federalagency or other insurer approved by the Commissioner; in bankers' acceptanceswhich are eligible for purchase by Federal Reserve Banks.
6. In loans to individuals for personal, family or household purposes andloans reasonably incident thereto, to include loans to dealers in consumergoods for purposes of financing inventory and floor planning. Such loans maybe evidenced by installment consumer paper which is transferred to anassociation by an endorser or guarantor, provided that such paper shall carrya full or limited endorsement or guarantee of the person, partnership,association or corporation transferring the same and the association shallhave a certificate of a responsible officer designated by its board for thatpurpose stating that the responsibility of the maker of such obligation hasbeen evaluated and the association is relying primarily upon such maker forthe payment of such obligation.
7. In loans secured by savings accounts of the association.
8. An association may issue credit cards, extend credit in connectiontherewith and otherwise engage in or participate in credit card operations.
9. In unsecured single payment personal loans to individuals with a term ofnot more than 12 months.
10. 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 association ofsuch item of personal property;
b. The association 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;
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.
11. 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, provided that such extensions of credit must be paidoff within 30 days after the extension of credit is made. The 30-daylimitation on repayment shall apply only to inadvertent overdrafts by theaccount owner, and shall not apply to extensions of credit, agreed upon inwriting, whereby the borrower is permitted to access the line of credit bycheck, draft or other fund transfer order.
12. In loans for commercial, corporate, business or agricultural purposes.Unless specifically authorized by the Commissioner, a state association shallnot invest more than 10 percent of its assets in loans for commercial,corporate, business or agricultural purposes. The percentage-of-assetslimitation in this subdivision shall not apply to overdraft loans, commercialreal estate loans, loans to a service corporation the stock of which is ownedby the association, or loans to dealers in consumer goods for inventory orfloor planning financing.
13. A state association may issue commercial and standby letters of credit inconformance with the Uniform Commercial Code (§ 8.1A-101 et seq.) or theUniform Customs and Practice for Documentary Credits and may pledgecollateral to secure its obligations thereunder, subject to the followingrequirements:
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.
14. 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; in corporate debtsecurities, including corporate debt securities convertible into stock, thatmay be sold with reasonable promptness at a price that corresponds reasonablyto their fair market value, and that are rated in at least the third highestcategory by a nationally recognized investment rating service in its mostrecently published ratings before the date of purchase of the security; andin shares in open-end management investment companies.
15. A state association may invest in any other obligations, instruments orinvestments which are specifically approved by the Commissioner.
16. The Commission may promulgate such rules and regulations as may berequired to prevent excessive aggregate amounts of lending by an associationto any one individual or entity.
(Code 1950, §§ 6-201.29, 6.1-157, 6.1-195.34; 1960, c. 402; 1962, c. 170;1964, c. 151; 1966, c. 584; 1968, c. 255; 1970, c. 237; 1972, c. 796; 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;1986, c. 509; 1988, c. 4; 1989, cc. 28, 396, 626; 1990, c. 3; 1992, c. 51;2003, c. 353.)