Gordon, 112532 PAAGO, AGO 76

Case DateNovember 25, 1932
CourtPennsylvania
Honorable William D. Gordon, Secretary of Banking, Harrisbnrg, Pennsylvania.
AGO 76
Opinion No. 76
Pennsylvania Attorney General Opinions
Opinion of the Attorney General
November 25, 1932
         Building and Loan Associations—Reconstruction Finance Corporation—Loans— Collateral—Act No. 4, Extraordinary Session of 1932.          Any building and loan association under the supervision of the Department of Banking, may, within the limits prescribed by the Act of July 28, 1932, Act No. 4, pledge with the Reconstruction Finance Corporation, or any other agency established under the authority of the United States Government, except national banks, any bonds and mortgages owned by it, or shares of its stock pledged to it, whether the contracts with the member-borrowers giving it title to such assets were entered into prior or after July 28, 1932, without the necessity of consent by the member-borrowers concerned.          Honorable William D. Gordon,          Secretary of Banking,          Harrisbnrg, Pennsylvania.          Sir: You have asked to be advised whether, under the provisions of Act No. 4 of the Extraordinary Session of 1932, approved July 28, 1932, a building and loan association under your supervision may pledge as collateral for Loans made to it by the Reconstruction Finance Corporation, or oth6r Federal agency, bonds, mortgages, and shares of stock delivered to it by member-borrowers.          Section 2 of the Act of 1932 provides that any building and loan association of the Commonwealth
" * * * shall have power and authority to borrow money from the Federal Home Loan Bank, the Reconstruction Finance Corporation, or any other corporation or agency established under the authority of the United States Government, except National banks, upon such terms and rates of interest, not exceeding the legal rate of interest in this Commonwealth, as may be agreed upon, and to assign its bonds and mortgages or other property, including the right to repledge the shares of stock pledged as collateral security without securing the consent of the owner thereto, as security for the repayment of its indebtedness as evidenced by its bond, obligation, or note given for such borrowed money, and such bond, obligation, note or notes may be in such form as is prescribed by the corporation or agency established under the authority of the United States Government, as aforesaid: Provided, however. That no building and loan association shall at any time borrow money from any such corporation or agency or in any manner now authorized by law in an amount exceeding thirty-five per centum of the withdrawal value of the stock issued by such association.''
         Nothing could be clearer than the provisions recited. Without question, this act, in terms complete in themselves, and independently of other legislative authority, gives to a building and loan association the right to...

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