12 U.S.C. § 1464 - Federal savings associations
|Cite as:||12 U.S.C. § 1464|
|Currency:||Current through P.L. 116-65 (10/09/2019)|
(a) In general
In order to provide thrift institutions for the deposit of funds and for the extension of credit for homes and other goods and services, the Comptroller of the Currency is authorized, under such regulations as the Comptroller of the Currency may prescribe-
(1) to provide for the organization, incorporation, examination, operation, and regulation of associations to be known as Federal savings associations (including Federal savings banks), and
(2) to issue charters therefor,
giving primary consideration of the best practices of thrift institutions in the United States. The lending and investment powers conferred by this section are intended to encourage such institutions to provide credit for housing safely and soundly.
(b) Deposits and related powers
(1) Deposit accounts
(A) Subject to the terms of its charter and regulations of the Comptroller of the Currency, a Federal savings association may-
(i) raise funds through such deposit, share, or other accounts, including demand deposit accounts (hereafter in this section referred to as "accounts"); and
(ii) issue passbooks, certificates, or other evidence of accounts.
(B) A Federal savings association may not permit any overdraft (including an intraday overdraft) on behalf of an affiliate, or incur any such overdraft in such savings association's account at a Federal reserve bank or Federal home loan bank on behalf of an affiliate.
All savings accounts and demand accounts shall have the same priority upon liquidation. Holders of accounts and obligors of a Federal savings association shall, to such extent as may be provided by its charter or by regulations of the Comptroller of the Currency, be members of the savings association, and shall have such voting rights and such other rights as are thereby provided.
(C) A Federal savings association may require not less than 14 days notice prior to payment of savings accounts if the charter of the savings association or the regulations of the Comptroller of the Currency so provide.
(D) If a Federal savings association does not pay all withdrawals in full (subject to the right of the association, where applicable, to require notice), the payment of withdrawals from accounts shall be subject to such rules and procedures as may be prescribed by the savings association's charter or by regulation of the Comptroller of the Currency. Except as authorized in writing by the Comptroller of the Currency, any Federal savings association that fails to make full payment of any withdrawal when due shall be deemed to be in an unsafe or unsound condition.
(E) Accounts may be subject to check or to withdrawal or transfer on negotiable or transferable or other order or authorization to the Federal savings association, as the Comptroller of the Currency may by regulation provide.
(F) A Federal savings association may establish remote service units for the purpose of crediting savings or demand accounts, debiting such accounts, crediting payments on loans, and the disposition of related financial transactions, as provided in regulations prescribed by the Comptroller of the Currency.
(2) Other liabilities
To such extent as the Comptroller of the Currency may authorize in writing, a Federal savings association may borrow, may give security, may be surety as defined by the Comptroller of the Currency and may issue such notes, bonds, debentures, or other obligations, or other securities, including capital stock.
(3) Loans from State housing finance agencies
(A) In general
Subject to regulation by the Comptroller of the Currency but without regard to any other provision of this subsection, any Federal savings association that is in compliance with the capital standards in effect under subsection (t) may borrow funds from a State mortgage finance agency of the State in which the head office of such savings association is situated to the same extent as State law authorizes a savings association organized under the laws of such State to borrow from the State mortgage finance agency.
(B) Interest rate
A Federal savings association may not make any loan of funds borrowed under subparagraph (A) at an interest rate which exceeds by more than 1ï¿½ percent per annum the interest rate paid to the State mortgage finance agency on the obligations issued to obtain the funds so borrowed.
(4) Mutual capital certificates
In accordance with regulations issued by the Comptroller of the Currency, mutual capital certificates may be issued and sold directly to subscribers or through underwriters. Such certificates may be included in calculating capital for the purpose of subsection (t) to the extent permitted by the Comptroller of the Currency. The issuance of certificates under this paragraph does not constitute a change of control or ownership under this chapter or any other law unless there is in fact a change in control or reorganization. Regulations relating to the issuance and sale of mutual capital certificates shall provide that such certificates-
(A) are subordinate to all savings accounts, savings certificates, and debt obligations;
(B) constitute a claim in liquidation on the general reserves, surplus, and undivided profits of the Federal savings association remaining after the payment in full of all savings accounts, savings certificates, and debt obligations;
(C) are entitled to the payment of dividends; and
(D) may have a fixed or variable dividend rate.
(c) Loans and investments
To the extent specified in regulations of the Comptroller, a Federal savings association may invest in, sell, or otherwise deal in the following loans and other investments:
(1) Loans or investments without percentage of assets limitation
Without limitation as a percentage of assets, the following are permitted:
(A) Account loans
Loans on the security of its savings accounts and loans specifically related to transaction accounts.
(B) Residential real property loans
Loans on the security of liens upon residential real property.
(C) United States Government securities
Investments in obligations of, or fully guaranteed as to principal and interest by, the United States.
(D) Federal home loan bank and Federal National Mortgage Association securities
Investments in the stock or bonds of a Federal home loan bank or in the stock of the Federal National Mortgage Association.
(E) Federal Home Loan Mortgage Corporation instruments
Investments in mortgages, obligations, or other securities which are or have been sold by the Federal Home Loan Mortgage Corporation pursuant to section 305 or 306 of the Federal Home Loan Mortgage Corporation Act [ 12 U.S.C. 1454 or 1455 ].
(F) Other Government securities
Investments in obligations, participations, securities, or other instruments issued by, or fully guaranteed as to principal and interest by, the Federal National Mortgage Association, the Student Loan Marketing Association, the Government National Mortgage Association, or any agency of the United States. A savings association may issue and sell securities which are guaranteed pursuant to section 306(g) of the National Housing Act [ 12 U.S.C. 1721(g) ].
Investments in accounts of any insured depository institution, as defined in section 3 of the Federal Deposit Insurance Act [ 12 U.S.C. 1813 ].
(H) State securities
Investments in obligations issued by any State or political subdivision thereof (including any agency, corporation, or instrumentality of a State or political subdivision). A Federal savings association may not invest more than 10 percent of its capital in obligations of any one issuer, exclusive of investments in general obligations of any issuer.
(I) Purchase of insured loans
Purchase of loans secured by liens on improved real estate which are insured or guaranteed under the National Housing Act [ 12 U.S.C. 1701 et seq.], the Servicemen's Readjustment Act of 1944, or chapter 37 of title 38.
(J) Home improvement and manufactured home loans
Loans made to repair, equip, alter, or improve any residential real property, and loans made for manufactured home financing.
(K) Insured loans to finance the purchase of fee simple
Loans insured under section 240 of the National Housing Act [ 12 U.S.C. 1715z-5 ].
(L) Loans to financial institutions, brokers, and dealers
(i) financial institutions with respect to which the United States or an agency or instrumentality thereof has any function of examination or supervision, or
(ii) any broker or dealer registered with the Securities and Exchange Commission,
which are secured by loans, obligations, or investments in which the Federal savings association has the statutory authority to invest directly.
(M) Liquidity investments
Investments (other than equity investments), identified by the Comptroller, for liquidity purposes, including cash, funds on deposit at a Federal reserve bank or a Federal home loan bank, or bankers' acceptances.
(N) Investment in the national housing partnership corporation, partnerships, and joint ventures
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 [ 42 U.S.C. 3931 et seq.], and investments in any partnership, limited partnership, or joint venture formed pursuant to section 907(a) or 907(c) of such Act [ 42 U.S.C. 3937(a) or (c) ].
(O) Certain HUD insured or guaranteed investments
Loans that are secured by mortgages-
(i) insured under title X of the National Housing Act [ 12 U.S.C. 1749aa et seq.],1 or
(ii) guaranteed under title IV of the Housing and Urban Development Act of 1968, under part B of the National Urban Policy and New Community Development Act of 1970 [ 42 U.S.C. 4511 et seq.], or under section 802 of the Housing and Community Development Act of 1974 [ 42 U.S.C. 1440 ].
(P) State housing corporation investments
Obligations of and loans to any State housing corporation, if-
(i) 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 [ 12 U.S.C. 1701 et seq.], and
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