Pursuant to section 5(c) of the Home Owners' Loan Act (``HOLA''), 12 U.S.C. 1464(c), a Federal savings association may make, invest in, purchase, sell, participate in, or otherwise deal in (including brokerage or warehousing) all loans and investments allowed under section 5(c) of the HOLA including, without limitation, the following loans, extensions of credit, and investments, subject to the limitations indicated and any such terms, conditions, or limitations as may be prescribed from time to time by the OCC by policy directive, order, or regulation:
Lending and Investment Powers Chart------------------------------------------------------------------------
Statutory investment
limitations
Statutory (Endnotes contain
Category authorization \1\ applicable
regulatory
limitations)------------------------------------------------------------------------Bankers' bank stock......... 5(c)(4)(E).......... Same terms as
applicable to
national banks.Business development credit 5(c)(4)(A).......... The lesser of .5% of
corporations. total outstanding
loans or $250,000.Commercial loans............ 5(c)(2)(A).......... 20% of total assets,
provided that
amounts in excess
of 10% of total
assets may be used
only for small
business loans.Commercial paper and 5(c)(2)(D).......... Up to 35% of total
corporate debt securities. assets. \2 3\Community development loans 5(c)(3)(A).......... 5% of total assets,
and equity investments. provided equity
investments do not
exceed 2% of total
assets. \4\Construction loans without 5(c)(3)(C).......... In the aggregate,
security. the greater of
total capital or 5%
of total assets.Consumer loans.............. 5(c)(2)(D).......... Up to 35% of total
assets. \2 5\Credit card loans or loans 5(c)(1)(T).......... None. \6\
made through credit card
accounts.Deposits in insured 5(c)(1)(G).......... None. \6\
depository institutions.Education loans............. 5(c)(1)(U).......... None. \6\Federal government and 5(c)(1)(C), None. \6\
government-sponsored 5(c)(1)(D),
enterprise securities and 5(c)(1)(E),
instruments. 5(c)(1)(F).Finance leasing............. 5(c)(1)(B), Based on purpose and
5(c)(2)(A), property financed.
5(c)(2)(B), \7\
5(c)(2)(D).Foreign assistance 5(c)(4)(C).......... 1% of total assets.
investments. \8\General leasing............. 5(c)(2)(C).......... 10% of assets. \7\Home improvement loans...... 5(c)(1)(J).......... None. \6\Home (residential) loans \9\ 5(c)(1)(B).......... None. \6 10\HUD-insured or guaranteed 5(c)(1)(O).......... None. \6\
investments.Insured loans............... 5(c)(1)(I), None. \6\
5(c)(1)(K).Liquidity investments....... 5(c)(1)(M).......... None. \6\Loans secured by deposit 5(c)(1)(A).......... None. \6 11\
accounts.Loans to financial 5(c)(1)(L).......... None. \6 12\
institutions, brokers, and
dealers.Manufactured home loans..... 5(c)(1)(J).......... None. \6 13\Mortgage-backed securities.. 5(c)(1)(R).......... None. \6\
National Housing Partnership 5(c)(1)(N).......... None. \6\
Corporation and related
partnerships and joint
ventures.New markets venture capital 5(c)(4)(F).......... 5% of total capital.
companies.Nonconforming loans......... 5(c)(3)(B).......... 5% of total assets.Nonresidential real property 5(c)(2)(B).......... 400% of total
loans. capital. \14\Open-end management 5(c)(1)(Q).......... None. \6\
investment companies \15\.Rural business investment 7 U.S.C. 2009cc-9... Five percent of
companies. total capital.Service corporations........ 5(c)(4)(B).......... 3% of total assets,
as long as any
amounts in excess
of 2% of total
assets further
community, inner
city, or community
development
purposes. \16\Small business investment 15 U.S.C. 682(b)(2). 5% of total capital.
companies.Small business-related 5(c)(1)(S).......... None. \6\
securities.State and local government 5(c)(1)(H).......... None for general
obligations. obligations. Per
issuer limitation
of 10% of capital
for other
obligations. \6 17\State housing corporations.. 5(c)(1)(P).......... None. \6 18\Transaction account loans, 5(c)(1)(A).......... None. \6 19\
including overdrafts.------------------------------------------------------------------------Endnotes\1\ All references are to section 5 of the Home Owners' Loan Act (12
U.S.C. 1464) unless otherwise indicated.\2\ For purposes of determining a Federal savings association's
percentage of assets limitation, investment in commercial paper and
corporate debt securities must be aggregated with the Federal savings
association's investment in consumer loans.\3\ A Federal savings association may invest in commercial paper and
corporate debt securities, which includes corporate debt securities
convertible into stock, subject to the provisions of Sec. 160.40 of
this part. Amounts in excess of 30% of assets, in the aggregate, may
be invested only in obligations purchased by the association directly
from the original obligor and for which no finder's or referral fees
have been paid.\4\ The 2% of assets limitation is a sublimit for investments within the
overall 5% of assets limitation on community development loans and
investments. The qualitative standards for such loans and investments
are set forth in HOLA section 5(c)(3)(A) (formerly 5(c)(3)(B)), as
explained in an opinion of the Office of Thrift Supervision Chief
Counsel dated May 10, 1995.\5\ Amounts in excess of 30% of assets, in the aggregate, may be
invested only in loans made by the association directly to the
original obligor and for which no finder's or referral fees have been
paid. A Federal savings association may include loans to dealers in
consumer goods to finance inventory and floor planning in the total
investment made under this section.\6\ While there is no statutory limit on certain categories of loans and
investments, including credit card loans, home improvement loans,
education loans, and deposit account loans, the OCC may establish an
individual limit on such loans or investments if the association's
concentration in such loans or investments presents a safety and
soundness concern.\7\ A Federal savings association may engage in leasing activities
subject to the provisions of Sec. 160.41 of this part.\8\ This 1% of assets limitation applies to the aggregate outstanding
investments made under the Foreign Assistance Act and in the capital
of the Inter-American Savings and Loan Bank. Such investments may be
made subject to the provisions of Sec. 160.43 of this part.\9\ A home (or residential) loan includes loans secured by one-to-four
family dwellings, multi-family residential property, and loans secured
by a unit or units of a condominium or housing cooperative.\10\ A Federal savings association may make home loans subject to the
provisions of Secs. 160.33, 160.34, and 160.35 of this part.\11\ Loans secured by savings accounts and other time deposits may be
made without limitation, provided the Federal savings association
obtains a lien on, or a pledge of, such accounts. Such loans may not
exceed the withdrawable amount of the account.\12\ A Federal savings association may only invest in these loans if
they are secured by obligations of, or by obligations fully guaranteed
as to principal and interest by, the United States or any of its
agencies or instrumentalities, the borrower is a financial institution
insured by the Federal Deposit Insurance Corporation or is a broker or
dealer registered with the Securities and Exchange Commission, and the
market value of the securities for each loan at least equals the
amount of the loan at the time it is made.\13\ If the wheels and axles of the manufactured home have been removed
and it is permanently affixed to a foundation, a loan secured by a
combination of a manufactured home and developed residential lot on
which it sits may be treated as a home loan.\14\ Without regard to any limitations of this part, a Federal savings
association may make or invest in the fully insured or guaranteed
portion of nonresidential real estate loans insured or guaranteed by
the Economic Development Administration, the Farmers Home
Administration, or the Small Business Administration. Unguaranteed
portions of guaranteed loans must be aggregated with uninsured loans
when determining an association's compliance with the 400% of capital
limitation for other real estate loans.\15\ This authority is limited to investments in open-end management
investment companies that are registered with the Securities and
Exchange Commission under the Investment Company Act of 1940. The
portfolio of the investment company must be restricted by the
company's investment policy (changeable only if authorized by
shareholder vote) solely to investments that a Federal savings
association may, without limitation as to percentage of assets, invest
in, sell, redeem, hold, or otherwise deal in. Separate and apart from
this authority, a Federal savings association may make pass-through
investments to the extent authorized by Sec. 160.32 of this part.\16\ A Federal savings association may invest in service corporations
subject to the provisions of part 159 of this chapter.\17\ This category includes obligations issued by any state, territory,
or possession of the United States or political subdivision thereof
(including any agency, corporation, or instrumentality of a state or
political subdivision), subject to Sec. 160.42 of this part.\18\ A Federal savings association may invest in state housing
corporations subject to the provisions of Sec. 160.121 of this part.\19\ Payments on accounts in excess of the account balance (overdrafts)
on commercial deposit or transaction accounts shall be considered
commercial loans for purposes of determining the association's
percentage of assets limitation.