§ 6:822 — Loans and investments
§822. Loans and investments An association may invest in, sell, participate, or otherwise deal in or with the following loans or other investments as hereinafter provided:
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§822. Loans and investments
An association may invest in, sell, participate, or otherwise deal in or with the
following loans or other investments as hereinafter provided:
(1) No association shall make a loan to one borrower if the sum of (a) the amount
of such loan, and (b) the total balances of all outstanding loans owed to such association by
such borrower exceeds an amount equal to the lesser of (i) ten percent of such association's
savings liability, or (ii) an amount equal to such association's paid-in capital, surplus,
reserves for losses, and undivided profits; except that any loan may be made if the sum of (a)
and (b) does not exceed five hundred thousand dollars. The requirements of (i) and (ii) of
this Paragraph shall be measured by the amounts reported at the end of the month
immediately preceding the month in which the loan or written commitment for a designated
loan amount is made. The limits relative to unsecured loans to one borrower shall be subject
to such limitations as the commissioner may impose. The limits contained in this Paragraph
shall not apply to loans made to a service organization of which an association directly or
indirectly owns or controls a majority of the voting shares or more than fifty percent of the
number of shares voted for the election of the directors of the service organization.
(2) 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 demand accounts.
(b) Real Estate Loans.
(i) Loans on the security of liens or mortgages upon residential or nonresidential real
estate, except that the loans and investments in loans of an association on nonresidential real
estate shall not exceed forty percent of its assets.
(ii) Sales of loans or participating interest therein on residential real estate may be
sold with right of substitution. Any other loan shall only be sold without recourse.
(c) United States Government securities. Investments in obligations of, or fully
guaranteed as to principal and interest by the United States. An association may act as agent
for the United States in the sale or other disposition of such obligations.
(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 sold by the Federal Home Loan Mortgage
Corporation pursuant to the Federal Home Loan Mortgage Corporation Act.
(f) Other government securities. Investments in obligations, participations,
securities, or other instruments of, or issued by, or fully guaranteed as to principal and
interest by, the Federal National Mortgage Association, the Student Loan Marketing
Association or the Government National Mortgage Association, Federal Home Loan
Mortgage Corporation, or any other agency of the United States or any other securities
guaranteed pursuant to the National Housing Act.
(g) Deposits. Investments in the time deposits, certificates, or accounts of any bank
the deposits of which are insured by the Federal Deposit Insurance Corporation, or in the
savings accounts, certificates, or other accounts of any institution the accounts of which are
insured by the Federal Deposit Insurance Corporation or the National Credit Union Share
Insurance Fund, or other insuring entity designated by the commissioner.
(h) State Securities. Investments in obligations of, or issued by, any state or political
subdivision thereof, including any agency, corporation, or instrumentality of a state or
political subdivision, except that an association may not invest more than ten percent of its
capital and surplus in obligations of any one issuer, exclusive of investments in general
obligations of any one issuer.
(i) Purchase of insured loans. Purchase of loans secured by liens on improved real
estate which are insured under provisions of the National Housing Act, or insured as
provided in the Servicemen's Readjustment Act of 1944 or Chapter 37 of Title 38 of the
United States Code.
(j) Home improvement and manufactured home loans. Loans made for the repair,
equipping, alteration, or improvement of any residential real property, and loans made for
the purpose of manufactured home financing.
(k) Insured loans to finance the purchase of immovable property. Loans as to which
the association has the benefit of insurance under the National Housing Act, or of a
commitment or agreement therefor.
(l) Loans to financial institutions, brokers, and dealers. Loans to financial
institutions with respect to which the United States or an agency or instrumentality thereof
has any function of examination or supervision, or to any broker or dealer registered with the
Securities and Exchange Commission, if such loans are secured by loans, obligations, or
investments in which the association has the statutory authority to invest directly.
(m) Liquidity investments. Investments which, at the time of making, are assets
eligible for inclusion toward satisfaction of any liquidity requirement imposed by the Federal
Home Loan Bank Board pursuant to the Federal Home Loan Bank Act.
(n) Investment in the National Housing Partnership Corporation, partnership, and
joint ventures. Investments in shares of stock issued by a corporation authorized to be
created pursuant to Title IX of the Federal Housing and Urban Development Act of 1968,
and investments in any partnership, limited partnership, or a joint venture formed pursuant
to Section 907(a) or 907(b) of that Act.
(o) Housing, land, and urban development; insured or guaranteed investments.
Loans secured by mortgages as to which the association has the benefit of insurance under
Title X of the National Housing Act or a commitment or agreement for such insurance, or
as to which the association has the benefit of any guarantee under Title IV of the Federal
Housing and Urban Development Act of 1969 or under Part B of the National Urban Policy
and New Community Development Act of 1970 or under Section 802 of the Federal Housing
and Community Development Act of 1974, or of a commitment or agreement therefor.
(p) State housing corporation investments. Investments in, commitments to invest
in, loans to, or commitments to lend to any state housing corporation, provided that 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, and that in the event of default, the holder of such obligations or loans would have the
right directly or indirectly to cause the real estate described in the first lien or the insurance
proceeds under the National Housing Act to be subject to the satisfaction of such obligation
or loans.
(q) Investment companies. An association may invest in, redeem, or hold shares or
certificates in any investment company which is registered with the securities and exchange
commissioner under the Investment Company Act of 1940 and the portfolio of which is
restricted by such company's investment policy solely to any such investments as an
association by law or regulation, without limitation as to percentage of assets, may invest in,
sell, redeem, hold, or otherwise deal with.
(r) Commercial and other loans. Secured or unsecured loans for commercial,
corporate, business, or agricultural purposes other than loans on nonresidential real estate.
The aggregate amount of loans under this Subparagraph shall not exceed ten percent of the
assets of the association.
(3) The following loans or investments are permitted, but are limited except as
provided in this Section to not in excess of the percentage of the assets of the association set
forth as follows:
(a) Investments in movable property. Investments in tangible movable property, or
leases thereon including, without limitation, vehicles, manufactured homes, machinery,
equipment, or furniture, for rental or sale, but such investment shall not exceed ten percent
of the assets of the association.
(b) Consumer loans and certain securities. An association may make secured or
unsecured loans for personal, family, or household purposes, including loans reasonably
incident to the provision of such credit and may invest in, sell, or hold commercial paper and
corporate debt securities, as defined and approved by the commissioner, except that loans of
an association under this Subparagraph shall not exceed thirty percent of the assets of the
association.
(c) Community development investments. Investments in immovable property and
obligations secured by liens on immovable property located within a geographic area or
neighborhood receiving concentrated development assistance by a local government under
Title I of the Housing and Community Development Act of 1974, as amended, but no
investment in immovable property made pursuant to this Subparagraph shall exceed an
aggregate investment of ten percent of the assets of the association.
(d) Real estate investments for other than association's offices. The provisions of
R.S. 6:243 and 246, and the rules and regulations promulgated thereunder shall be applicable
to associations in the same manner as they are applicable to banks.
(e) Real estate for an association's offices. Investments in immovable property for
an association's offices shall not exceed an aggregate investment as provided in rules and
regulations by the commissioner.
(f) Service organizations. Investments in the capital stock, obligations, or other
securities of any service organization shall not exceed ten percent of the assets of the
association.
(4) The following loans or investments are permitted, but are limited to not in excess
of five percent of assets of the association for each type of loan set forth in the following
Subparagraphs.
(a) Education loans. Loans made for the payment of educational expenses.
(b) Nonconforming loans. Loans secured by immovable property or interests therein,
used primarily for residential or farm purposes that are not otherwise authorized by this
Section.
(c) Home equity conversion loans and shared appreciation loans. Loans made
pursuant to participation in a shared appreciation loan or home equity conversion loan,
including but not limited to reverse mortgages and shared appreciation mortgages, wherein
the association has a right to receive a share of the appreciation in value of the security
property upon maturity of the loan. Such loans shall be authorized when any of the following
exist:
(i) The security property of the borrower is designed principally as a single-family
residence.
(ii) The borrower is the owner and occupant of the security property.
(iii) The loan is authorized pursuant to the Alternative Mortgage Transaction Parity
Act of 1982, 12 U.S.C. 3801 et seq., and regulations issued by the office of financial
institutions as provided in this Title.
(5) The following additional loans and other investments are permitted:
(a) Business development credit corporations. An association whose general
reserves, surplus, and undivided profits aggregate a sum in excess of five percent of its
withdrawable accounts is authorized to invest in, lend to, or to commit itself to lend to, any
business development credit corporation doing business in the state, but the aggregate
amount of such investments, loans, and commitments of any such association shall not
exceed one percent of the total assets of the association.
(b) Foreign assistance investments. Investments in housing project loans having the
benefit of any guaranty under Section 221 of the Foreign Assistance Act of 1961 or loans
having the benefit of any guaranty under Section 224 of that Act, or any commitment or
agreement with respect to such loans, made pursuant to either of such sections, in the share
capital and capital reserve of the Inter-American Savings and Loan Bank or of the African
Development Bank. This authority extends to the acquisition, holding, and disposition of
loans having the benefit of any guaranty under Sections 221 or 222 of that Act as hereafter
amended or extended, or of any commitment or agreement for any such guaranty.
Investments under this Subparagraph shall not exceed in the case of any association, one
percent of the assets of an association.
(c) Small business investment companies. An association may invest in stock,
obligations, or other securities of any small business investment company formed pursuant
to the Small Business Investment Act of 1958, but no association may make any investment
under this Subparagraph if its aggregate outstanding investment under this Subparagraph
would exceed one percent of the assets of such association.
(d) Loans secured by mortgages other than first mortgages. An association may
make loans secured by mortgages other than first mortgages.
(e) Loans secured by other loans or insurance policies. Associations shall have the
power to invest in loans and other investments which are secured by the pledge of loans or
other investments, the assignment of which need not be recorded, of a type in which the
association is authorized to invest, however, the loans and investments so pledged shall be
subject to all restrictions and requirements which would be applicable were the association
to invest directly in such loans or investments. Associations may also require the pledge of
life insurance policies, the assignment of which is properly acknowledged by the insurer, as
additional security for any loan which it is authorized to make.
(f) Notwithstanding other limitations contained in this Section, the sum of an
association's aggregate direct investments in service organizations, real estate, and equity
securities may be in an amount equal to or less than twice the association's paid-in capital,
surplus, reserves for losses, and undivided profits.
(6) An association may make such other investments or loans of whatever character
or description, including joint ventures for redevelopment, not to exceed ten percent of
assets.
(7) The commissioner may permit an association to exceed the limitations otherwise
provided in this Section for good cause shown by the association, where to permit an
association to exceed such limits would be in the best interest of the association, its
depositors, or members.
{{NOTE: SEE ACTS 1986, NO. 243, §3 FOR RETROACTIVE EFFECT
TO JUNE 1, 1986.}}
Louisiana § 6:822 (Loans and investments) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.