(a)Subject to the regulations of the Commissioner, a savings bank may loan funds as follows:
(1)On the security of deposit accounts, but no such loan shall exceed the withdrawal value of the pledged account.
(2)On the security of real estate:
(A)of a value, determined in accordance with this Act, sufficient to provide good and ample security for the loan;
(B)with a fee simple title or a leasehold title;
(C)with the title established by evidence of title as is consistent with sound lending practices in the locality;
(D)with the security interest in the real estate evidenced by an appropriate written instrument and the loan evidenced by a note, bond, or similar written instrument; a loan on the security of the whole of the beneficial interest in a land trust satisfies the requirements
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(a) Subject to the regulations of the Commissioner, a savings bank may loan funds as follows: (1) On the security of deposit accounts, but no such loan shall exceed the withdrawal value of the pledged account. (2) On the security of real estate: (A) of a value, determined in accordance with this Act, sufficient to provide good and ample security for the loan; (B) with a fee simple title or a leasehold title; (C) with the title established by evidence of title as is consistent with sound lending practices in the locality; (D) with the security interest in the real estate evidenced by an appropriate written instrument and the loan evidenced by a note, bond, or similar written instrument; a loan on the security of the whole of the beneficial interest in a land trust satisfies the requirements of this paragraph if the title to the land is held by a corporate trustee and if the real estate held in the land trust meets the other requirements of this subsection; (E) with a mortgage loan not to exceed 40 years. (3) For the purpose of repair, improvement, rehabilitation, furnishing, or equipment of real estate. (4) For the purpose of financing or refinancing an existing ownership interest in certificates of stock, certificates of beneficial interest, other evidence of an ownership interest in, or a proprietary lease from a corporation, trust, or partnership formed for the purpose of the cooperative ownership of real estate, secured by the assignment or transfer of certificates or other evidence of ownership of the borrower. (5) Through the purchase of loans that, at the time of purchase, the savings bank could make in accordance with this Section and the bylaws. (6) Through the purchase of installment contracts for the sale of real estate and title thereto that is subject to the contracts, but in each instance only if the savings bank, at the time of purchase, could make a mortgage loan of the same amount and for the same length of time on the security of the real estate. (7) Through loans guaranteed or insured, wholly or in part, by the United States or any of its instrumentalities. (8) Subject to regulations adopted by the Commissioner, through secured or unsecured loans for business, corporate, commercial, or agricultural purposes; provided that the total of all loans granted under this paragraph shall not exceed 15% of the savings bank's total assets unless a greater amount is authorized in writing by the Commissioner. (9) For the purpose of manufactured home financing subject, however, to the regulation of the Commissioner. As used in this Section, "manufactured home" means a manufactured home as defined in subdivision (53) of Section 9-102 of the Uniform Commercial Code. (10) Through loans secured by the cash surrender value of any life insurance policy or any collateral that would be a legal investment under the terms of this Act if made by the savings bank. (11) Any provision of this Act or any other law, except for paragraph (18) of Section 6003, to the contrary notwithstanding, but subject to the Financial Institutions Insurance Sales Law and subject to the Commissioner's regulations, any savings bank may make any loan or investment or engage in any activity that it could make or engage in if it were organized under State law as a savings and loan association or under federal law as a federal savings and loan association or federal savings bank. (12) A savings bank may issue letters of credit or other similar arrangements only as provided for by regulation of the Commissioner with regard to aggregate amounts permitted, take out commitments for stand-by letters of credit, underlying documentation and underwriting, legal limitations on loans of the savings bank, control and subsidiary records, and other procedures deemed necessary by the Commissioner. (13) For the purpose of automobile financing, subject to the regulation of the Commissioner. (14) For the purpose of financing primary, secondary, undergraduate, or postgraduate education. (15) Through revolving lines of credit on the security of a first or junior lien on the borrower's personal residence, based primarily on the borrower's equity, the proceeds of which may be used for any purpose; those loans being commonly referred to as home equity loans. (16) As secured or unsecured credit to cover the payment of checks, drafts, or other funds transfer orders in excess of the available balance of an account on which they are drawn, subject to the regulations of the Commissioner. (17) Through the purchase of fixed rate annuity contracts, if: (A) the savings bank's purchase of fixed rate annuities from any one issuer does not exceed 25% of the amount of the savings bank's unimpaired capital and unimpaired surplus; (B) consistent with safe and sound operation of the savings bank and applicable federal regulatory guidance, and prior to any purchase of fixed rate annuities, the saving bank establishes reasonable internal concentration limits for its combined holdings from all issuers, and the savings bank's purchase of annuities remains within those limits; (C) consistent with safe and sound operation of the savings bank and applicable federal regulatory guidance, and prior to purchasing each fixed rate annuity, the savings bank conducts an independent analysis to determine that the annuity will meet the savings bank's internal underwriting standards. At a minimum, the savings bank must: (i) perform a full financial statement analysis on the issuer (obligor); (ii) assess the issuer's industry position, pricing power, and management strength; (iii) assess and evaluate the issuer's source of repayment and collateral value, if any; (iv) gain appropriate credit approvals of the savings bank's management and board of directors, or a committee thereof; (v) assign a risk rating; and (vi) ensure their lending policy addresses the type of exposure the savings bank plans to acquire; (D) after purchase of the annuity, the savings bank reviews the credit exposure on an ongoing basis and updates the risk rating as appropriate; (E) the terms of the annuity contract include charges or penalties for early withdrawal (surrender), the savings bank conducts independent analysis of the reasonableness of and associated risks of the charges or penalties; (F) except for payment of charges or penalties that the savings bank determines reasonable under subparagraph (C), the savings bank is permitted to surrender (terminate) the annuity at any time before maturity and receive immediate access to the full value of the annuity, including principal and accrued interest; and (G) the savings bank does not exercise any option it may have to convert its fixed rate annuity to a variable return status or any other status other than a fixed rate annuity as described in this Section. (b) For purposes of this Section, "real estate" includes a manufactured home as defined in subdivision (53) of Section 9-102 of the Uniform Commercial Code which is real property as defined in Section 5-35 of the Conveyance and Encumbrance of Manufactured Homes as Real Property and Severance Act.