Loans and investments

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) ].

(G) Deposits 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 Loans to— (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 1 See References in Text note below. 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 (ii) in the event of default, the holder of the obligations or loans has the right directly, or indirectly through an agent or fiduciary, to cause to be subject to the satisfaction of such obligations or loans the real estate described in the first lien or the insurance proceeds under the National Housing Act.

(Q) Investment companies A Federal savings association may invest in, redeem, or hold shares or certificates issued by any open-end management investment company which— (i) is registered with the Securities and Exchange Commission under the Investment Company Act of 1940 [ 15 U.S.C. 80a–1 et seq.], and (ii) the portfolio of which is restricted by such management company’s investment policy (changeable only if authorized by shareholder vote) solely to investments that a Federal savings association by law or regulation may, without limitation as to percentage of assets, invest in, sell, redeem, hold, or otherwise deal in.

(R) Mortgage-backed securities Investments in securities that— (i) are offered and sold pursuant to section 4(5) of the Securities Act of 1933; 1 or (ii) are mortgage related securities (as defined in section 3(a)(41) of the Securities Exchange Act of 1934) [ 15 U.S.C. 78c(a)(41) ], subject to such regulations as the Comptroller may prescribe, including regulations prescribing minimum size of the issue (at the time of initial distribution) or minimum aggregate sales price, or both.

(S) Small business related securities Investments in small business related securities (as defined in section 78c(a)(53) of title 15 ), subject to such regulations as the Comptroller may prescribe, including regulations concerning the minimum size of the issue (at the time of the initial distribution), the minimum aggregate sales price, or both.

(T) Credit card loans Loans made through credit cards or credit card accounts.

(U) Educational loans Loans made for the payment of educational expenses.

The following loans or investments are permitted, but only to the extent specified:

(A) Commercial and other loans Secured or unsecured loans for commercial, corporate, business, or agricultural purposes. The aggregate amount of loans made under this subparagraph may not exceed 20 percent of the total assets of the Federal savings association, and amounts in excess of 10 percent of such total assets may be used under this subparagraph only for small business loans, as that term is defined by the Comptroller.

(B) Nonresidential real property loans (i) In general Loans on the security of liens upon nonresidential real property. Except as provided in clause (ii), the aggregate amount of such loans shall not exceed 400 percent of the Federal savings association’s capital, as determined under subsection (t). (ii) Exception The Comptroller may permit a savings association to exceed the limitation set forth in clause (i) if the Comptroller determines that the increased authority— (I) poses no significant risk to the safe and sound operation of the association, and (II) is consistent with prudent operating practices. (iii) Monitoring If the Comptroller permits any increased authority pursuant to clause (ii), the Comptroller shall closely monitor the Federal savings association’s condition and lending activities to ensure that the savings association carries out all authority under this paragraph in a safe and sound manner and complies with this subparagraph and all relevant laws and regulations.

(C) Investments in personal property Investments in tangible personal property, including vehicles, manufactured homes, machinery, equipment, or furniture, for rental or sale. Investments under this subparagraph may not exceed 10 percent of the assets of the Federal savings association.

(D) Consumer loans and certain securities A Federal savings association may make loans for personal, family, or household purposes, including loans reasonably incident to providing such credit, and may invest in, sell, or hold commercial paper and corporate debt securities, as defined and approved by the Comptroller. Loans and other investments under this subparagraph may not exceed 35 percent of the assets of the Federal savings association, except that amounts in excess of 30 percent of the assets may be invested only in loans which are made by the association directly to the original obligor and with respect to which the association does not pay any finder, referral, or other fee, directly or indirectly, to any third party.

The following loans or investments are permitted, but not to exceed 5 percent of assets of a Federal savings association for each subparagraph:

(A) Community development investments Investments in real property and obligations secured by liens on real 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 [ 42 U.S.C. 5301 et seq.]. No investment under this subparagraph in such real property may exceed an aggregate of 2 percent of the assets of the Federal savings association.

(B) Nonconforming loans Loans upon the security of or respecting real property or interests therein used for primarily residential or farm purposes that do not comply with the limitations of this subsection.

(C) Construction loans without security Loans— (i) the principal purpose of which is to provide financing with respect to what is or is expected to become primarily residential real estate; and (ii) with respect to which the association— (I) relies substantially on the borrower’s general credit standing and projected future income for repayment, without other security; or (II) relies on other assurances for repayment, including a guarantee or similar obligation of a third party. The aggregate amount of such investments shall not exceed the greater of the Federal savings association’s capital or 5 percent of its assets.

The following additional loans and other investments to the extent authorized below:

(A) Business development credit corporations A Federal savings association that is in compliance with the capital standards prescribed under subsection (t) may invest in, lend to, or to 2 2 So in original. commit itself to lend to, any business development credit corporation incorporated in the State in which the home office of the association is located in the same manner and to the same extent as savings associations chartered by such State are authorized. The aggregate amount of such investments, loans, and commitments of any such Federal savings association shall not exceed one-half of 1 percent of the association’s total outstanding loans or $250,000, whichever is less.

(B) Service corporations Investments in the capital stock, obligations, or other securities of any corporation organized under the laws of the State in which the Federal savings association’s home office is located, if such corporation’s entire capital stock is available for purchase only by savings associations of such State and by Federal associations having their home offices in such State. No Federal savings association may make any investment under this subparagraph if the association’s aggregate outstanding investment under this subparagraph would exceed 3 percent of the association’s assets. Not less than one-half of the investment permitted under this subparagraph which exceeds 1 percent of the association’s assets shall be used primarily for community, inner-city, and community development purposes.

(C) Foreign assistance investments Investments in housing project loans having the benefit of any guaranty under section 221 of the Foreign Assistance Act of 1961 [ 22 U.S.C. 2181 ] or loans having the benefit of any guarantee under section 224 of such Act [ 22 U.S.C. 2184 ], 1 or any commitment or agreement with respect to such loans made pursuant to either of such sections and in the share capital and capital reserve of the Inter-American Savings and Loan Bank. This authority extends to the acquisition, holding, and disposition of loans guaranteed under section 221 or 222 of such Act [ 22 U.S.C. 2181 or 2182]. Investments under this subparagraph shall not exceed 1 percent of the Federal savings association’s assets.

(D) Small business investment companies A Federal savings association may invest in stock, obligations, or other securities of any small business investment company formed pursuant to section 301(d) of the Small Business Investment Act of 1958 [ 15 U.S.C. 681(d) ] 1 for the purpose of aiding members of a Federal home loan bank. A Federal savings association may not make any investment under this subparagraph if its aggregate outstanding investment under this subparagraph would exceed 1 percent of the assets of such savings association.

(E) Bankers’ banks A Federal savings association may purchase for its own account shares of stock of a bankers’ bank, described in Paragraph Seventh of section 24 of this title or in section 27(b) of this title , on the same terms and conditions as a national bank may purchase such shares.

(F) New Markets Venture Capital companies A Federal savings association may invest in stock, obligations, or other securities of any New Markets Venture Capital company as defined in section 689 of title 15 , except that a Federal savings association may not make any investment under this subparagraph if its aggregate outstanding investment under this subparagraph would exceed 5 percent of the capital and surplus of such savings association.

(A) In general If, under section 5(d)(3) of the Federal Deposit Insurance Act [ 12 U.S.C. 1815(d)(3) ], 1 a savings association acquires all or substantially all of the assets of a bank, the appropriate Federal banking agency may permit the savings association to retain any such asset during the 2-year period beginning on the date of the acquisition.

(B) Extension The appropriate Federal banking agency may extend the 2-year period described in subparagraph (A) for not more than 1 year at a time and not more than 2 years in the aggregate, if the appropriate Federal banking agency determines that the extension is consistent with the purposes of this chapter.

For purposes of this subsection, the following definitions shall apply:

(A) Residential property The terms “residential real property” or “residential real estate” mean leaseholds, homes (including condominiums and cooperatives, except that in connection with loans on individual cooperative units, such loans shall be adequately secured as defined by the Comptroller) and, combinations of homes or dwelling units and business property, involving only minor or incidental business use, or property to be improved by construction of such structures.

(B) Loans The term “loans” includes obligations and extensions or advances of credit; and any reference to a loan or investment includes an interest in such a loan or investment.