Oregon Chapter 722
TITLE 54Download Full 2005 Oregon Revised Statutes (coming soon!)
Download Full 2007 Oregon Revised Statutes (coming soon!)
View 2005 version of these codes
Code Resources
Oregon Resources
Oregon Website
Oregon Governor
Oregon Legislature
Oregon Courts
Search this Code
in Google Scholar
on the Web
Google Web Search
MSN Web Search
Yahoo! Web Search
in the News
Google News Search
Google News Archive Search
Yahoo! News Search
in the Blogs
BlawgSearch.com Search
Google Blog Search
Technorati Blog Search
in other Databases
Google Book Search
TITLE 54
LOAN
ASSOCIATIONS AND LENDING INSTITUTIONS
Chapter 722. Savings Associations
723. Credit Unions
725. Consumer Finance; Title and Payday Loans
726. Pawnbrokers
_______________
Chapter 722 —
Savings Associations
2007 EDITION
SAVINGS ASSOCIATIONS
LOAN ASSOCIATIONS AND LENDING INSTITUTIONS
GENERAL PROVISIONS
722.004 Definitions
722.008 Purposes;
standards for exercise of regulatory powers
FORMATION, ORGANIZATION, VOLUNTARY CORPORATE
CHANGES
(Formation and Organization of Association)
722.012 Authorization
to transact business required; exceptions
722.014 Name
of savings association
722.016 Incorporation;
application of Oregon Business Corporation Act
722.018 Articles
of incorporation
722.022 Application
for incorporation
722.024 Investigation
of application; notice of application filing; hearing; authority to require
additional information; fingerprinting
722.026 Grounds
for approval or denial of application for certificate of incorporation;
organization
722.028 Denial
of application; right to hearing on denial
722.032 Function
of initial board; surety bond or letter of credit; subscriptions to capital;
savings account pledges; completed organization report; time to organize
limited
722.034 Surety
bond or letter of credit conditions; designation of escrow agent
722.036 Issuance
or denial of certificate of authority; conditions of certificate
722.038 Amending
articles or bylaws; copies to be furnished to association members
722.042 Minimum
capital or expense fund and pledged savings accounts
722.044 Restrictions
on use of capital surplus or expense fund; repayment of expense fund;
nonwithdrawable savings accounts of new associations
722.046 Time
allowed to secure insurance of accounts and commence business
722.048 Insurers
of accounts; representations as to insurance
722.052 Revocation
of certificate of authority; dissolution
(Voluntary Corporate Changes)
722.056 Conversion
from domestic association to federal or foreign association or
722.058 Conversion
of federal or foreign mutual association or savings bank to domestic mutual
association; conversion of stock association or Oregon stock savings bank to
domestic stock association
722.062 Conversion
of federal or foreign mutual association or savings bank to domestic stock
association; conversion of stock association to domestic mutual association;
conditions
722.064 Rules
and supervision standards in conversions
722.066 Approval
of conversion by members
722.068 Effect
of conversion
722.072 Merger;
consolidation; exchange; sale of assets
722.074 Voluntary
dissolution
CORPORATE ADMINISTRATION
(Directors; Officers; Members; Borrowers)
722.102 Directors’
responsibility; designation, duties of managing officer and representative;
service of process on nonresident director; fee
722.104 Operating
and employment contracts
722.106 Bonds
and insurance coverage; notice of cancellation; exception
722.107 Fund
in lieu of bonds and insurance coverage; rules
722.108 Fiduciary
relationship of directors, officers and employees; conflict of interest;
liability for violation
722.112 Indemnification
or reimbursement of director, officer, employee or agent
722.113 Indemnification
fund for officers and directors; rules
722.114 Membership
in association; voting; membership records
722.116 Member’s
right to examine books and records; enforcement; attorney fees
722.118 Account
holder’s and borrower’s right to inspect accounts; member’s right to
communicate with members; enforcement; attorney fees
722.122 Applicability
of ORS 722.116 and 722.118 to federal associations
722.124 Notice
of cease and desist orders in annual meeting notice
(Stock; Dividends and Earnings; General
Reserve and Net Worth Accounts)
722.132 Payment
for stock issued by a stock association
722.134
722.136 Ascertainment
of earnings; payment of expenses
722.138 Conditions
for payment of dividends, distribution of earned surplus; holding earned
surplus
722.142 General
reserve account for losses and net worth requirements; rules
(Miscellaneous)
722.152 Membership
fees prohibited
722.154 Publication
of financial statements
722.156 Records
722.162 Conduct
of business on holidays; emergency closing
722.164 Sharing
of information on customers by savings associations and related companies
GENERAL POWERS
722.202 General
powers of associations
722.204 Associations
may be granted powers of federal associations; rules
722.206 Power
of association to borrow; limitations, exceptions and preferences
722.208 Capital
notes and debentures
722.212 Trust
business powers
722.214 Acting
as trustee or custodian under Employee Retirement Income Security Act of 1974
SAVINGS OPERATIONS
722.252 Account
holders as creditors of association
722.254 Savings
accounts
722.256 Withdrawal
from savings accounts; rules
722.257 Time
period for drawing on item deposited in savings or federal association;
disclosure
722.258 Payment
of accounts of minors and persons under disability
722.262 Payment
of savings account or demand deposit account on death of holder; affidavit
requirements
722.264 Savings
accounts as legal investments and as security
722.266 Savings
accounts as security for loans
722.268 Service
charge on dormant accounts
INVESTMENT OPERATIONS
(Investment Powers)
722.302 Minimum
liquid assets; rules
722.304 Permitted
investments; limitations
722.306 “Prudent
person” investment rule
722.308 Investment
in service corporations; services performed for association to be subject to
regulation and examination by director; rules
722.309 Service
corporations undertaking public projects; authority to invest and organize;
conditions; corporate form; functions
722.311 Proposal
to invest in or organize service corporation for public projects; approval by
director
722.312 Real
property investments; limit on property, improvements and furnishings for
association’s business offices
722.314 Real
property acquired by foreclosure; valuation
(Loans)
722.322 Real
estate loans
722.324 Appraisal
of property prior to loan
722.326 Real
estate loans in excess of 95 percent of appraised value; reserve for payment of
loss
722.328 Loans
to account holders
722.332 Loans
secured by life insurance policies; education loans
722.334 Secured
and unsecured loans related to real property; advance of credit for
manufactured dwelling financing or home construction; loans to certain
subsidiaries
722.336 Personal
loans
722.338 Loans
to officer or employee to purchase association stock
722.342 Loans
to directors, officers and persons related to them; conditions; exemptions;
rules
(General Provisions)
722.352 Participation,
insured or guaranteed loans
722.354 Maximum
loans to one person or on one property; interest
722.356 Types
of investments and loans limited; effect of unauthorized loan or investment;
liability of officers
SUPERVISION AND ENFORCEMENT
(Supervision)
722.408 Rules
722.416 Publication
of statutes, rules and opinions
722.419 Public
inspection of records of department pertaining to this chapter; exemptions
722.432 Communications
from director; notices generally
722.434 Financial
statements and audits
722.436 Examinations
by director; report; examination program with federal regulators; acceptance of
federal or other state examinations
722.438 Extended
audit, examination or revaluation; payment of costs
722.442 Right
of access to books and records of association; authority to issue subpoenas,
administer oaths and examine witnesses
722.444 Appraisal
of association property by director
722.446 Authority
to establish branch facility; approval of director required to change location
of branch or principal office; applicability of ORS 722.448 and 722.452
722.448 Application
for approval to establish branch or change location of branch; notice and
hearing
722.452 Approval
of branch application; right to hearing if approval denied; list of branch
facilities
722.454 Discontinuance
of branch; revocation of approval by director
722.456 Director
to be notified of certain illegal acts
722.457 Giving
false document, statement or report prohibited
722.458 Records
of extensions of credit by domestic associations; rules
722.459 Investigation
of new director, president and managing officer; fingerprinting; disapproval of
election or appointment
(Enforcement)
722.462 Enforcement
generally; authority to require specific reserves
722.464 Cease
and desist orders
722.468 Removal
of association officer or employee
(Conservatorship)
722.474 Appointment
of conservator; duties; compensation
722.476 Powers
of conservator
722.478 Acquiring
possession of contents of safety deposit vaults, safes and boxes
722.482 Contest
of conservatorship appointment by association officers
722.484 Correction
of alleged wrongdoings by unimpaired association
FOREIGN ASSOCIATIONS
722.502 Certificate
of authority required to transact business in
722.504 Application
for certificate of authority; payment of filing fee
722.506 Issuance
of certificate to foreign association
722.508 Law
applicable to contracts
722.512 Applicability
of Business Corporation Act
722.514 Prohibition
against operation of certain foreign associations; exception; prohibition
against savings and loan business by entity based in foreign country
722.516 Revocation
of certificate of authority
FEES AND CHARGES
722.602 Filing
fees; charges for examinations
722.606 Annual
fees paid by savings associations
MISCELLANEOUS
722.652 Effect
of laws on existing associations
722.654 Reserve
fund associations redesignated stock associations
722.656 Certain
outstanding shares, share accounts and investment certificates considered
savings accounts
722.658 Limitation
on personal liability for good faith acts or omissions
722.660 Procedures
for opening safe deposit box after death of person who was sole lessee or last
surviving lessee of box
PENALTIES
722.991 Civil
penalties
GENERAL PROVISIONS
722.002 [1975 c.582 §2; repealed by 2007 c.71 §233]
722.004
Definitions. As used in this
chapter, unless the context otherwise requires:
(1) “Account holder” means a person who
owns a savings account.
(2) “Borrower” means a person who is an
obligor under a loan agreement entered into by a savings association as
obligee.
(3) “Branch facility” or “branch” means an
established place of business or a mobile or other facility of an association,
other than the principal office, at which any savings and loan business
activity is carried on.
(4) “Community” means a centralized area
or locality in which a body of inhabitants is gathered in one group having
common residential, social or business interests. The term does not necessarily
mean a city, county or other political subdivision and need not but may be
limited by lines and boundaries, and a large, populous area under one or more
forms of government may be composed of several communities.
(5) “Demand deposit” means a deposit in an
account that is payable on demand upon the presentation of a negotiable check
or draft.
(6) “Department” means the Department of
Consumer and Business Services.
(7) “Depositor” means a person who
deposits money in a savings account in an association.
(8) “Director” means the Director of the
Department of Consumer and Business Services.
(9) “Domestic association” means a
corporation that transacts savings and loan business under articles of
incorporation issued by this state.
(10) “Federal association” means a
corporation that transacts savings and loan business in this state under
authority to do so issued under federal law.
(11) “Foreign association” means a
corporation, other than a federal association, organized to transact savings
and loan business under the laws of any other state or territory of the United
States.
(12) “Independent auditor” means a public
accountant or a certified public accountant authorized to practice as a public
accountant or as a certified public accountant under the laws of this state, or
a firm of such accountants.
(13) “Managing officer” means an officer
of a savings association designated by the board of directors of the
association as provided by ORS 722.102.
(14)(a) “Member,” in a mutual association,
means an account holder and any other person who is a member of a class of
persons granted membership rights by the articles of incorporation or the
bylaws.
(b) “Member,” in a stock association,
means a stockholder and any other person who is a member of a class of persons
granted membership rights by the articles of incorporation or the bylaws.
(15) “Mutual association” means a savings
association formed without authority to issue stock.
(16) “Principal office” means the office
of the headquarters of a savings association in this state.
(17) “Savings account” means the interest
of an account holder in the savings liability of a savings association.
(18) “Savings association” or “association”
means a domestic association or a foreign association and includes a stock or a
mutual association.
(19) “Savings Association Act” means this
chapter.
(20) “Savings bank” has the meaning given
that term by ORS 706.008, except as otherwise provided in ORS 722.014 relating
to name.
(21) “Savings liability” means the total
amount on deposit in all savings accounts of a savings association plus
interest earned on such accounts.
(22) “Service corporation” means a
corporation:
(a) That is engaged, or proposes to
engage, in a business activity related to savings and loan business; and
(b) In which at least 80 percent of the
shares of stock having voting rights are owned by one or more saving
associations or federal associations.
(23) “Stock association” means a savings
association formed with authority to issue stock.
(24) “Stockholder” means a person who
appears on the records of a savings association as the owner of one or more
shares of stock of the association.
(25) “To transact savings and loan business”
means to engage in business activities to promote savings and home building and
ownership, to acquire funds of the public to invest in loans and to make
repayments to savers as provided in savings plans.
(26) “Withdrawal value” means the amount
of a savings account, less lawful deductions. [1975 c.582 §§3 to 31; 1981 c.472
§1; 1985 c.374 §1; 1985 c.762 §53; 1985 c.798 §3; 1987 c.373 §56; 1993 c.744 §24;
1997 c.631 §528; 2007 c.71 §234]
722.005 [Amended by 1961 c.398 §1; 1967 c.234 §1;
1971 c.757 §3; repealed by 1975 c.582 §152]
722.008
Purposes; standards for exercise of regulatory powers. (1) The Legislative Assembly adopts the
Savings Association Act:
(a) To provide for the safe and sound
conduct of the business of savings associations, the conservation of their
assets and the maintenance of public confidence in savings associations;
(b) To provide for the protection of the
interests of account holders and the public interest in the soundness of the
savings and loan system;
(c) To provide the opportunity for savings
associations subject to the Act:
(A) To remain competitive with each other
and with savings and financial institutions existing under other laws of this
and other states, the United States and foreign countries; and
(B) To serve effectively the convenience
and advantage of customers and to improve and expand their services and
facilities for such purposes;
(d) To provide the opportunity for
managements of associations to exercise business judgment in conducting the
affairs of associations to the extent compatible with the purposes recited in
this subsection; and
(e) To provide adequate rulemaking power
and administrative discretion so that the regulation and supervision of
associations is readily responsive to changes in economic conditions and in
savings and loan practices.
(2) The purposes of the Savings
Association Act stated in subsection (1) of this section constitute standards
to be observed by the Director of the Department of Consumer and Business
Services in the exercise of discretionary powers under the Act, in the adoption
of rules, in the examination and supervision of associations subject to the Act
and in all matters of construction and application of the Act required for any
determination or action by the director. [1975 c.582 §32; 1985 c.762 §54]
722.010 [Amended by 1961 c.398 §2; 1963 c.288 §1;
repealed by 1975 c.582 §152]
FORMATION,
ORGANIZATION, VOLUNTARY CORPORATE CHANGES
(Formation
and Organization of Association)
722.012
Authorization to transact business required; exceptions. (1) A person shall not transact savings and
loan business in this state unless the person has been issued a certificate of
authority as provided by this chapter or is authorized to do so by articles of
incorporation granted prior to June 6, 1931. Unless a person is so authorized
and actually engaged in savings and loan business in this state, a person
transacting business in this state shall not:
(a) Transact business under a name or
title that contains the term “savings and loan,” “building and loan,” “thrift
and loan” or words of similar import; or
(b) Use any sign, or circulate or use any
letterhead, billhead, circular or paper whatsoever, or advertise in any manner
that is calculated to lead the public to believe that it is transacting savings
and loan business.
(2) Subsection (1) of this section does
not apply to a federal association. [1975 c.582 §33]
722.014
Name of savings association.
(1) The name of a domestic association, or the name authorized and used by a
foreign association doing business in this state, shall terminate with the
words “Savings Association,” “Savings and Loan Association” or “Savings Bank.”
The name “Savings Bank” may be so used notwithstanding any other provision of
(2) In addition to the requirements of ORS
57.045 (4)(a) (1985 Replacement Part), the name of a savings association shall
not so resemble the name of another savings association or an existing federal
association doing business in this state or a bank as defined in ORS 706.008 as
to be likely to cause confusion or mistake, or to deceive. This subsection
applies only to:
(a) A domestic association formed after
January 1, 1976.
(b) A foreign association issued a
certificate of authority after January 1, 1976. [1975 c.582 §34; 1985 c.374 §2;
1985 c.728 §106; 1987 c.197 §11; 1997 c.631 §529]
722.015 [Amended by 1971 c.743 §414; repealed by
1975 c.582 §152]
722.016
Incorporation; application of Oregon Business Corporation Act. (1) A domestic association shall be
incorporated, either as a stock or a mutual association.
(2) ORS chapter 57 (1985 Replacement Part)
applies to domestic associations and to foreign associations except where
inconsistent with the express provisions of this chapter and, where
inconsistent, this chapter applies.
(3) The following provisions of ORS
chapter 57 (1985 Replacement Part) do not apply to savings associations, as
follows:
(a) ORS 57.025, 57.045 (1), 57.080,
57.085, 57.106, 57.221, 57.226, 57.231 (1)(d), 57.246 (2) to (4), 57.255,
57.260, 57.590, 57.595 (1)(a) and (b), 57.735 and 57.755 to 57.772 do not apply
to savings associations.
(b) In addition to the sections referred
to in paragraph (a) of this subsection, ORS 57.080 to 57.111, 57.121 to 57.137,
57.216, 57.390 to 57.411 and 57.870 to 57.890 do not apply to mutual associations.
(4) In applying ORS chapter 57 (1985
Replacement Part) and provisions of ORS chapter 60, as provided by this
section, unless the context requires otherwise:
(a) “Corporation Division,” “division” or “office
of Secretary of State” means the Department of Consumer and Business Services.
(b) “Corporation Commissioner,” “commissioner”
or “Secretary of State” means the Director of the Department of Consumer and
Business Services.
(c) “Corporation” or “domestic corporation”
means a domestic association.
(d) “Shareholder” means an account holder
of a mutual association, a stockholder of a stock association and includes
account holders and borrowers of a stock association if designated as members
of the association in the articles and bylaws of the association.
(e) Any reference in ORS chapter 57 (1985
Replacement Part) to filing fees, annual license fees and other money payable
by corporations to the commissioner shall be considered a reference to the
provisions of this chapter governing filing fees, annual fees and other money
payable by associations to the director.
(f) Written notice of meetings to
stockholders of a stock association shall be delivered and the books of the
association may be closed not less than 10 nor more than 60 days before the
date of the meeting in the manner prescribed in ORS 57.150 and 57.155 (1985
Replacement Part).
(5) ORS 60.131 and 60.134 apply to stock
savings associations.
(6) ORS 60.047 (2)(d) and 60.387 to 60.414
apply to savings associations.
(7) Notwithstanding ORS 57.355, articles
of incorporation of a savings association may be amended to set forth and apply
the provisions of ORS 60.047 (2)(d). [1975 c.582 §35; 1979 c.863 §1; 1981 c.472
§2; 1981 c.633 §78; 1983 c.717 §40; 1983 c.740 §252; 1985 c.728 §107; 1985
c.762 §55; 1987 c.197 §12; 1987 c.414 §166b; 1987 c.528 §4; 1991 c.883 §13]
722.018
Articles of incorporation.
Any individuals desiring to transact savings and loan business may, by
complying with this chapter, become a body corporate for that purpose. The articles
of incorporation for a savings association shall state:
(1) That the association is organized for
the purpose of transacting savings and loan business.
(2) Whether the association is organized
as a stock association or a mutual association and, if as a mutual association,
state who has membership rights and the relative rights of different classes of
members of the association. [1975 c.582 §36]
722.020 [Amended by 1953 c.401 §11; 1961 c.398 §3;
1971 c.743 §415; 1971 c.757 §4; repealed by 1975 c.582 §152]
722.022
Application for incorporation.
When incorporators of a domestic association deliver articles of incorporation
to the Director of the Department of Consumer and Business Services, they shall
submit an application for a certificate of incorporation, signed and verified
by a majority of the incorporators, together with the proper filing fee. The
application shall set forth:
(1) The names and addresses of the
incorporators and proposed directors and officers of the association.
(2) A statement of the character,
financial responsibility, experience and fitness of the directors and officers
to engage in the savings and loan business.
(3) Statements of estimated receipts,
expenditures, earnings and financial condition of the association for the first
two years or such longer period as the director may require.
(4) A showing that the association will
have a reasonable chance to succeed in the community in which it proposes to
operate.
(5) A showing that the public convenience
and advantage will be promoted by the formation of the proposed association.
(6) Proposed bylaws.
(7) Any other matters the director may
require. [1975 c.582 §37]
722.024
Investigation of application; notice of application filing; hearing; authority
to require additional information; fingerprinting. (1) Upon receipt of an application and the
documents described by ORS 722.022, the Director of the Department of Consumer
and Business Services shall promptly examine and investigate whether the
formation of the association should be allowed and the application granted.
(2) Not less than 20 days prior to taking
action on an application for a certificate of incorporation, the director shall
give notice of the filing of the application as provided by subsection (3) of
this section. The notice shall state:
(a) That the application has been filed
and name the community where the principal office is to be located; and
(b) That either a hearing will be held on
the application at a time, date and place given in the notice, or that a
hearing will be held if any person objects on relevant grounds to the granting
of the application and files a request for a hearing with the director prior to
a date given in the notice.
(3) Notice shall be given:
(a) By publishing the notice one time in a
newspaper, designated by the director, of general circulation in the community
in which the principal office of the proposed association is to be located;
(b) By mailing copies to all domestic,
foreign and federal associations transacting business in this state; and
(c) By mailing copies of the notice to
persons who have requested notice pursuant to ORS 183.335 (8).
(4) If a hearing is held because of a
request, notice of the hearing shall be given as provided by subsection (3) of
this section and shall name the time, date and place of the hearing. At any
hearing any person may appear in person or by agent or attorney and orally or
in writing show cause upon any relevant ground why the application should or
should not be granted.
(5) In the course of investigating any
person named as incorporators and proposed directors and officers in the
articles of incorporation under ORS 722.022, the director may require the
person to provide additional information for the director’s further inquiry.
For the purpose of such further inquiry, the director may require the person to
submit to fingerprinting.
(6) Fingerprints acquired under subsection
(5) of this section may be submitted to appropriate law enforcement agencies,
including the Federal Bureau of Investigation, for the purpose of discovering
any unlawful activities of the person. [1975 c.582 §38; 1977 c.161 §5; 1979
c.593 §33; 1979 c.863 §1a; subsections (5) and (6) enacted as 1985 c.786 §56;
2001 c.220 §6]
722.025 [Amended by 1971 c.743 §416; repealed by
1975 c.582 §152]
722.026
Grounds for approval or denial of application for certificate of incorporation;
organization. (1) The
Director of the Department of Consumer and Business Services shall approve an
application for a certificate of incorporation if the director affirmatively
finds from the data furnished with the application, from the evidence adduced
at the public hearing, if any, and from the investigation and records of the
director, including a review of criminal records, that:
(a) The articles of incorporation and
proposed bylaws comply with the law and the other provisions of this chapter
have been complied with;
(b) The character, financial
responsibility, experience and fitness of each incorporator, each member of the
proposed board of directors and any person or persons directly or indirectly
controlling the proposed association commands confidence and warrants belief
that the business of the proposed association will be honestly and efficiently
conducted in accordance with the intent and purpose of this chapter and that
the proposed association will have qualified full-time management;
(c) The community stated in the
application as the location of the principal office of the proposed association
affords a reasonable promise of adequate support for the association;
(d) The operation of the proposed
association will not unduly harm any existing association that has been
transacting business in the community for less than two years; and
(e) The public convenience and advantage
will be promoted.
(2) Upon approval of an application, the
director shall issue a certificate of incorporation with such conditions and
restrictions as are required by this chapter. After issuance of the certificate
of incorporation, however, the association shall not do any business, except
such business as is incident to its organization, until the director has issued
to it a certificate of authority as provided by ORS 722.036. [1975 c.582 §39;
1977 c.166 §1]
722.028
Denial of application; right to hearing on denial. If the Director of the Department of
Consumer and Business Services denies an application for a certificate of
incorporation the director shall enter an order to that effect, setting out the
facts that are the basis of the denial, and mail the order, with a copy of the
proposed articles of incorporation, to the incorporators or their
representatives. The order shall also notify the incorporators of their right
to a hearing on the order. [1975 c.582 §40]
722.030 [Amended by 1959 c.227 §1; 1961 c.398 §4;
1967 c.234 §10; repealed by 1975 c.582 §152]
722.032
Function of initial board; surety bond or letter of credit; subscriptions to
capital; savings account pledges; completed organization report; time to
organize limited. (1) After
the organizational meeting, the initial board of directors of an association
shall:
(a) File with the Director of the
Department of Consumer and Business Services a corporate surety bond or letter
of credit, in the form and amount required by ORS 722.034;
(b) Collect subscriptions to capital or
the expense fund in the amounts required under ORS 722.042, but only after the
surety bond required by paragraph (a) of this subsection has been filed with
the director;
(c) Obtain subscriptions to savings
accounts pledged, in the amount required under ORS 722.042, to be paid in to
the association upon issuance to it of a certificate of authority;
(d) Take such other action as may be
necessary to complete the organization of the association; and
(e) Report the completion of the organization
to the director.
(2) The report shall be filed with the
director within six months after the date the certificate of incorporation is
issued. However, the director, upon good cause shown prior to the expiration of
the six-month period, may extend the time for filing the report for an
additional period not to exceed six months. [1975 c.582 §41; 1991 c.331 §121]
722.034
Surety bond or letter of credit conditions; designation of escrow agent. (1) Any corporate surety bond or letter of
credit filed with the Director of the Department of Consumer and Business
Services as provided by ORS 722.032 shall be executed to the State of
(2) Actual organizational expenses of the
kind described by ORS 57.116 (1985 Replacement Part) may be paid as incurred
from the funds collected under ORS 722.042. However, such payments in the
aggregate shall not exceed an amount authorized by the director as reasonable
for organizational expenses.
(3) The initial board of directors of an
association shall, subject to the approval of the director, designate an escrow
agent for the safekeeping and delivery of funds in accordance with this
section. [1975 c.582 §42; 1981 c.472 §3; 1987 c.197 §13; 1991 c.331 §122; 1997
c.631 §530]
722.035 [Amended by 1959 c.227 §3; 1961 c.398 §67;
repealed by 1975 c.582 §152]
722.036
Issuance or denial of certificate of authority; conditions of certificate. (1) When the report of the board of
directors is filed with the Director of the Department of Consumer and Business
Services as provided by ORS 722.032, the director shall examine the affairs of
the association. The director shall issue a certificate of authority to the
association authorizing it to commence business if:
(a) The director finds the association has
complied with all the provisions of law required to entitle it to transact
business;
(b) The director finds no intervening
circumstance has occurred to change the findings of the director made under ORS
722.026;
(c) The director approves the bylaws
adopted by the initial board of directors; and
(d) The association pays the proper annual
fee for the remainder of the fiscal year.
(2) A certificate when issued continues in
effect unless revoked by the director. A certificate of authority shall be
issued conditional upon the association securing insurance of its savings
accounts and commencing business within the time allowed by ORS 722.046.
(3) If the director does not issue a
certificate of authority to an association, the director shall enter an order
denying the certificate, stating the reasons for the denial, and mail the order
to the board of directors. The order shall also notify the board of its right
to a hearing on the order. [1975 c.582 §43]
722.038
Amending articles or bylaws; copies to be furnished to association members. (1) A domestic association may, after
securing the approval of the Director of the Department of Consumer and
Business Services, amend its articles of incorporation or its bylaws.
(2) When a domestic or foreign savings
association amends its articles or bylaws, it shall file a verified copy of the
resolution authorizing such amendment in the office of the director.
(3) Copies of the articles of
incorporation and bylaws of a savings association shall be furnished by the
association to the members of the association upon request. [1975 c.582 §44;
1977 c.166 §2]
722.040 [Amended by 1959 c.227 §4; 1961 c.398 §5;
1967 c.234 §11; repealed by 1975 c.582 §152]
722.042
Minimum capital or expense fund and pledged savings accounts. (1) When the Director of the Department of
Consumer and Business Services issues a certificate of incorporation for a new
association, the director shall include in the certificate, as conditions that
must be met prior to the issuance of a certificate of authority to do business,
requirements that in the opinion of the director will justify the initial
successful operation of the association. Requirements in the certificate of a
new association shall include, but need not be limited to:
(a) The minimum amount of stated capital
and capital surplus that must be subscribed and paid in to a new stock
association; or
(b) The minimum expense fund that must be
paid in to a new mutual association; and
(c) The minimum number and value of
savings accounts that must be subscribed and pledged to a mutual or stock
association upon issuance to it of a certificate of authority.
(2) All payments required by this section
shall be in lawful money of the
722.044
Restrictions on use of capital surplus or expense fund; repayment of expense
fund; nonwithdrawable savings accounts of new associations. (1) Until a new stock association is on a
profitable operating basis as determined by the Director of the Department of
Consumer and Business Services, capital surplus collected by the association
under ORS 722.042 shall be restricted and may be used only for payment of the
expenses and charges of organization, as described by ORS 57.116 (1985
Replacement Part), and for payment of any net operating losses of the
association, as determined after transfers to general reserves for losses.
(2) Until a new mutual association is on a
profitable operating basis as determined by the director, the expense fund
collected by the association under ORS 722.042 shall be used only for payment
of the expenses and charges of organization, similar to those described by ORS
57.116 (1985 Replacement Part), and for payment of any net operating losses of
the association as determined after transfers to general reserves for losses.
When the director determines that the association is on a profitable operating
basis, contributions made to the expense fund may be repaid pro rata to the
contributors, first from the balance, if any, remaining in the expense fund and
then from earned surplus.
(3) In case of the liquidation of a mutual
association before contributions to the expense fund have been repaid, any
balance in the expense fund remaining unexpended after the payment of expenses
of liquidation, all creditors and the withdrawal value of all savings accounts
shall be repaid to the contributors pro rata.
(4) Amounts paid in on savings accounts
pledged to a new mutual association pursuant to ORS 722.042 shall not be
withdrawable until the director, pursuant to subsection (2) of this section,
determines that the association is on a profitable operating basis. [1975 c.582
§46; 1987 c.197 §14]
722.045 [Amended by 1959 c.227 §5; 1961 c.398 §6;
1967 c.234 §12; repealed by 1975 c.582 §152]
722.046
Time allowed to secure insurance of accounts and commence business. (1) A new association shall secure insurance
of its savings accounts as provided by ORS 722.048 and commence business within
six months after the date the certificate of authority to do business is
issued.
(2) If the association does not secure
insurance and commence business within the time allowed, on application of the
association prior to the expiration of the time and upon good cause shown, the
Director of the Department of Consumer and Business Services may extend the
time for an additional period not to exceed six months. [1975 c.582 §47]
722.048
Insurers of accounts; representations as to insurance. (1) A savings association shall obtain and
maintain insurance of its savings accounts from the Federal Deposit Insurance
Corporation or other federal or state agency, or from another insurer approved
by the Director of the Department of Consumer and Business Services.
(2) Upon receiving an application from an
association for approval of an insurer, the director shall give reasonable
notice to the insurer and the applicant and conduct a public hearing on the
application. The director may issue a certificate approving an insurer if the
director determines that the contract of insurance contemplated:
(a) Is written upon substantially the same
basis as to form, amount, coverage, maturity, voluntary and involuntary
termination and other provisions as the insurance contract provided by the
Federal Deposit Insurance Corporation;
(b) Complies with any further requirements
for protection of account holders that the director considers reasonably
necessary; and
(c) Is underwritten by an insurer who has
a net worth reasonably commensurate with the risks underwritten and is
authorized to transact insurance in this state.
(3) Subsection (2) of this section applies
to all revisions or modifications of such contracts of insurance.
(4) Insured associations may make
representations as to insurance of savings accounts but all representations
shall set forth the name of the insurer. An association or other person shall
not advertise, represent, accept or offer to accept any savings accounts in
this state, unless the accounts are insured as provided by this section. [1975
c.582 §48; 1999 c.107 §13]
722.050 [Repealed by 1975 c.582 §152]
722.052
Revocation of certificate of authority; dissolution. (1) The Director of the Department of
Consumer and Business Services may revoke the certificate of authority of a
domestic or a foreign association for violation of the provisions of this
chapter.
(2) The director may revoke the
certificate of authority of a new domestic association and may dissolve the association
when the association fails to obtain insurance of accounts and commence
business within the time allowed by ORS 722.046.
(3) The director may dissolve a domestic
association:
(a) When the report of the initial board
of directors is not filed within the time allowed by ORS 722.032.
(b) After the effective date of an order
issued under ORS 722.036 denying a certificate of authority.
(4) The director shall dissolve an
association as provided by ORS 57.585 (1985 Replacement Part). The director,
prior to the dissolution, may appoint a conservator as provided by ORS 722.474
if the director finds that liquidation of the affairs of the association should
precede the dissolution of the association. [1975 c.582 §49; 1981 c.633 §79;
1983 c.717 §34; 1985 c.728 §105; 1987 c.197 §15]
722.055 [Amended by 1961 c.398 §7; 1971 c.757 §5;
repealed by 1975 c.582 §152]
(Voluntary
Corporate Changes)
722.056
Conversion from domestic association to federal or foreign association or
(a) The prior approval of the conversion
by the Director of the Department of Consumer and Business Services;
(b) The approval of the state or federal
supervisory authority having jurisdiction of the proposed resulting association
or bank; and
(c) The approval of the members of the
converting association at a meeting properly called to consider such action.
(2) When conversion to an
(3) Upon receipt of the approval of a
proposed conversion from the director and other appropriate supervisory
authority, a converting association, under the supervision of the authority,
may carry out the plan of conversion. A record of all acts or proceedings taken
in carrying out the proposed conversion shall be filed with the director.
(4) The effective date of a conversion
under this section is governed by the law, if any, governing the resulting
association or bank. If there is no law governing the effective date,
conversion proposed under this section is effective upon the date that all
provisions of this chapter and the rules adopted pursuant thereto have been
complied with and a new charter or certificate of incorporation has been issued
to the resulting association or savings bank. A certified copy of the new
charter or certificate of incorporation shall be filed with the director. [1975
c.582 §50; 1985 c.762 §56; 1987 c.373 §57; 1987 c.445 §11; 1997 c.631 §531]
722.058
Conversion of federal or foreign mutual association or savings bank to domestic
mutual association; conversion of stock association or Oregon stock savings
bank to domestic stock association. (1) A federal mutual association whose principal office is in this
state, a foreign mutual association or a savings bank may convert to a domestic
mutual association and a federal stock association whose principal office is in
this state, a foreign stock association or an Oregon stock savings bank, as
defined in ORS 706.008, may convert to a domestic stock association upon an
equitable basis subject to:
(a) The laws and regulations governing the
converting association or bank;
(b) The approval of the Director of the
Department of Consumer and Business Services;
(c) The approval of the members of the
converting association or bank; and
(d) The rules adopted by the director to
carry out the provisions of ORS 722.056 to 722.068.
(2) Upon receipt of the approval of a
proposed conversion from the director, a converting association or bank may,
under the supervision of the director, carry out the plan of conversion. A
record of all acts or proceedings taken by the board of directors of the
converting association or bank in carrying out the proposed conversion shall be
filed with the director.
(3) Notice of a meeting of the members to
approve a conversion under this section shall be given as provided by ORS
722.066 (2) and (3), unless otherwise provided by the law applicable to the
converting association or bank. At a meeting at which a conversion under this
section is voted upon, the members shall also vote upon the directors who shall
be the directors of the domestic association after conversion takes effect. The
director shall, in the certificate of incorporation issued to the resulting
association, include a statement that the association is incorporated by
conversion from a federal or foreign association or
(4) A conversion carried out under this
section is effective on the date that all provisions of this chapter and the
regulations adopted pursuant thereto have been complied with and a new
certificate of incorporation has been issued by the director.
(5) All provisions regarding property and
other rights contained in ORS 722.068 apply, in reverse order, to the
conversion into a domestic association under this section, so that the
resulting domestic association shall be a continuation of the converting
association or bank and continue to have all of its rights, liabilities,
obligations and relations. [1975 c.582 §51; 1987 c.445 §12; 1997 c.631 §532]
722.060 [Amended by 1973 c.368 §1; repealed by 1975
c.582 §152]
722.062
Conversion of federal or foreign mutual association or savings bank to domestic
stock association; conversion of stock association to domestic mutual
association; conditions. (1)
A federal mutual association whose principal office is in this state or a
foreign or domestic mutual association or savings bank may convert to a
domestic stock association and a federal stock association whose principal
office is in this state or a foreign or domestic stock association may convert
to a domestic mutual association upon an equitable basis subject to:
(a) The laws and regulations governing the
converting association or savings bank;
(b) The approval of the Director of the
Department of Consumer and Business Services;
(c) The approval of the members of the
converting association or bank; and
(d) The rules adopted pursuant to ORS
722.064.
(2) ORS 722.058 (2) to (5) apply to a
conversion under this section. [1975 c.582 §52]
722.064
Rules and supervision standards in conversions. In adopting rules or issuing orders to carry
out ORS 722.056 to 722.068, and especially when adopting rules or supervising conversions
proposed under ORS 722.062, the Director of the Department of Consumer and
Business Services shall assure that:
(1) Accurate and adequate disclosure of
the terms and effects of plans of conversion are provided to purchasers of
capital stock in resulting associations, including account holders of
converting mutual associations and savings banks;
(2) Adjustments are made in plans of
conversion to be effected by way of merger or holding company acquisition
necessary or appropriate to accomplish the purpose of this section;
(3) Plans of conversion and proxy
statements, offering circulars and related instruments and actions implementing
such plans are subject to review and approval by the appropriate supervisory
authorities;
(4) The capital stock issued as a part of
conversion is fairly and independently valued and priced;
(5) Such capital stock is allocated and
distributed fairly and without manipulative or deceptive devices being
employed;
(6) Appropriate provision is made
regarding fractional share interests and minimum capital stock purchase
requirements; and
(7) Plans of conversion are adopted and
implemented in a form and manner so that stability and continuity of management
are encouraged and so that the stability, safety and soundness of savings
associations and other financial institutions are not impaired. [1975 c.582 §53]
722.065 [Amended by 1971 c.743 §417; 1971 c.757 §6;
repealed by 1975 c.582 §152]
722.066
Approval of conversion by members. (1) A conversion proposed under ORS 722.056 to 722.068 by a domestic
association or
(2) Notice shall be given of any meeting
at which a conversion is to be considered. The notice shall:
(a) Expressly state that a proposed
conversion will be submitted for approval or disapproval;
(b) Include a full and accurate
description of the plan of conversion and all other matters to be brought
before the meeting;
(c) State that a proxy for the meeting
given previously is revocable; and
(d) State the time, date and place of the
meeting.
(3) The notice shall be given at least 20
days prior to the date of the meeting to each voting member of the converting association
or
(4) A foreign or federal association or an
722.068
Effect of conversion. (1)
Upon the effective date of the conversion of a domestic association to a
federal or foreign association or an
(2) All pending actions and other judicial
proceedings to which the converting domestic association is a party shall not
abate or discontinue by reason of such conversion, but may be prosecuted to
order or judgment in the same manner as if such conversion had not been made
and such resulting association or bank may continue such action in its
corporate name. Any order or judgment may be rendered for or against it which
might have been rendered for or against the converting domestic association
theretofore involved in such judicial proceedings. [1975 c.582 §55; 1987 c.445 §14;
1997 c.631 §534; 2003 c.576 §552]
722.070 [Amended by 1959 c.227 §6; 1961 c.398 §8;
1963 c.288 §18; repealed by 1975 c.582 §152]
722.072
Merger; consolidation; exchange; sale of assets. (1) A domestic association may merge or
consolidate with, participate in an exchange with or sell its assets, including
one or more of its branch facilities, to:
(a) One or more domestic associations;
(b) One or more foreign associations;
(c) One or more federal associations; or
(d) One or more
(2) A merger, consolidation, exchange or
sale under this section shall be carried out pursuant to a plan adopted by the
board of directors and approved by the Director of the Department of Consumer
and Business Services as:
(a) Equitable to the members of the
association;
(b) Not impairing the usefulness and
success of other properly conducted associations; and
(c) Promoting the public convenience and
advantage.
(3) The provisions of ORS 57.455 to 57.500,
57.506 and 57.511, (1985 Replacement Part), applicable to a merger,
consolidation or exchange of shares with, or sale of assets to, a foreign
corporation also apply to a merger, consolidation or exchange with, or a sale
to, a federal association.
(4) Notwithstanding ORS chapter 57 (1985
Replacement Part), stockholders of the surviving corporation in a merger
acquisition need not authorize and approve the plan if:
(a) The association’s charter is not
changed; and
(b) Any stock issued or delivered under
the plan, plus those initially issuable upon conversion of any securities to be
issued or delivered under the plan, does not exceed 15 percent of the total
shares of voting stock of the association outstanding immediately prior to the
effective date of the merger or acquisition. [1975 c.582 §56; 1979 c.863 §2;
1981 c.472 §4; 1983 c.717 §35; 1985 c.798 §4; 1987 c.197 §17; 1987 c.445 §15;
1997 c.631 §535]
722.074
Voluntary dissolution. (1) A
consent to dissolve or a resolution to dissolve shall not be effective as
provided by ORS 57.546 (1985 Replacement Part) unless the plan for distribution
of the assets of the association is approved by the Director of the Department
of Consumer and Business Services as equitable to the members.
(2) An association during liquidation
shall continue to be subject to the supervision of the director. The board of
directors of the association shall report the progress of the liquidation to
the director from time to time as the director may require.
(3) The director may take over and conduct
the liquidation as provided by this section and ORS 722.474 and 722.476 when
the director considers it to be in the interest of the account holders,
creditors, stockholders and other members of the association.
(4) Upon completion of a liquidation by
the board of directors, the board shall file a final report and accounting of
the liquidation with the director. [1975 c.582 §57; 1987 c.197 §18]
CORPORATE
ADMINISTRATION
(Directors;
Officers; Members; Borrowers)
722.102
Directors’ responsibility; designation, duties of managing officer and
representative; service of process on nonresident director; fee. (1) The board of directors of a savings
association shall be responsible for the business policies of the association
and for the enforcement of such policies by the managing officer.
(2) The board of each savings association
shall designate a person to serve as the managing officer. The managing officer
shall be the person responsible to the board of directors for the operation of
the association. The board shall also designate a representative for the
managing officer who may act for the managing officer during the temporary
absence or inability of such officer to act. For the purposes of this section,
the managing officer of a foreign association shall be a person in this state
who is responsible to the board of directors of the association for the
operations of the association in this state.
(3) The board of directors of each
association shall inform the Director of the Department of Consumer and
Business Services of the name of the managing officer and the managing officer’s
representative upon the designation, or any change in the designation, of such
a person. A board may comply with this subsection by mailing the director a
verified copy of the minutes of the board meeting at which the managing officer
or the managing officer’s representative is designated.
(4) Each director of a domestic
association who is not a resident of this state shall, by service as a
director, appoint the director as agent for service of process in any
proceeding connected with the director’s election or service as a director.
Subsections (5) to (7) of this section apply to service of process as
authorized by this subsection.
(5) Service shall be made on the director
by:
(a) Service on the director or on a clerk
on duty in the Department of Consumer and Business Services, of a copy of the
process, notice or demand, with any papers required by law to be delivered in
connection with the service, and a $2 fee;
(b) Transmittal by the person instituting
the proceedings of notice of the service on the director and a copy of the
process, notice or demand and accompanying papers to the savings association
being served by certified or registered mail:
(A) At the last-registered office of the
savings association as shown by the records of the director; and
(B) At such address, the use of which the
person initiating the proceedings knows or, on the basis of reasonable inquiry,
has reason to believe is most likely to result in actual notice; and
(c) Filing with the appropriate court or
other body, as part of the return of service, of the return receipt of mailing
and an affidavit of the person initiating the proceedings that this section has
been complied with.
(6) The director shall keep a record of
all processes, notices and demands served under this section.
(7) Nothing contained in this section
shall limit or affect the right to serve any process, notice or demand required
or permitted by law to be served upon a savings association in any other manner
now or hereafter permitted by law, or enlarge the purposes for which service on
the director is permitted where such purposes are limited by other provisions
of law. [1975 c.582 §58; 1983 c.717 §36; 1985 c.762 §57]
722.104
Operating and employment contracts. A savings association may make, transfer, extend or renew operating
and employment contracts. A contract under this section shall be subject to
rules, if any, of the Director of the Department of Consumer and Business
Services adopted to carry out the purposes of this chapter. An employment
contract with an officer or employee of an association shall provide that upon
discharge of the officer or employee pursuant to ORS 722.468, the contract and
all obligations of the association under the contract terminate; but discharge
shall not affect any vested rights of the parties to such a contract. [1975
c.582 §59; 1981 c.472 §5]
722.105 [Amended by 1959 c.227 §7; 1961 c.398 §9;
1971 c.757 §7; repealed by 1975 c.582 §152]
722.106
Bonds and insurance coverage; notice of cancellation; exception. (1) Except as provided in ORS 722.107, every
savings association shall obtain and maintain fidelity and other bonds and
insurance coverage, with one or more insurers authorized to do business in this
state, of the kinds and in the form and amounts required by the rules of the
Director of the Department of Consumer and Business Services to protect the
association, its account holders and other customers, and the public.
(2) Every required bond and insurance
policy shall provide that a cancellation thereof, either by the insurer or the
insured, shall not become effective until at least 30 days after notice that it
is to be canceled is mailed to the director. [1975 c.582 §60; 1987 c.285 §3]
722.107
Fund in lieu of bonds and insurance coverage; rules. Notwithstanding ORS 722.106, the Director of
the Department of Consumer and Business Services may establish by rule a
program under which a savings association may create a fund to provide payment,
protection and indemnification to the association, its officers, directors and
employees, its customers and the public for losses incurred or damages
sustained. The establishment of such a fund shall be in lieu of some or all of
the bonding and insurance requirements of ORS 722.106, and shall only be
allowed if the director finds that adequate third-party insurance or bonding
protection is not available, or is only available at excessive rates. Among the
provisions of the program shall be:
(1) Provisions for creating and
administering the fund. The provisions must require the pledging of collateral
by the association with the Federal Home Loan Bank of
(2) A limitation on the amount of
collateral that an association may pledge to the fund.
(3) Provisions for maintaining the fund
and replacing expenditures from the fund.
(4) A requirement that an association give
notice to its pledge holder before making any pledge, and authorization to the
pledge holder to refuse a pledge when it determines the pledge to be
inappropriate.
(5) Provisions for claim payments and
reimbursement from the fund. [1987 c.285 §2; 1987 c.414 §70a]
722.108
Fiduciary relationship of directors, officers and employees; conflict of
interest; liability for violation. (1) The directors, officers and employees of a savings association
occupy a fiduciary relationship to the association. A director, officer or
employee of an association shall not engage or participate, directly or
indirectly, in any business or transaction involving the association when such
person possesses any personal interest, direct or indirect in the business or
transaction unless:
(a) Prior thereto, the person fully
discloses to the board of directors such personal interest;
(b) The business or transaction is fair to
the association and reasonable; and
(c) The business or transaction has the
prior approval of not less than two-thirds of the authorized members of the
board of directors, the approval is entered in the minutes of the meeting at
which the business or transaction is authorized and a director with any
interest in the business or transaction abstains from voting on the question of
approval. However, any business or transaction in which more than one-third of
the authorized members of the board of directors have an interest may be
consummated if the Director of the Department of Consumer and Business Services
approves the business or transaction before its consummation.
(2) The director may require that a
director, officer or employee disclose any personal interest, direct or
indirect, in any business or transaction on behalf of or involving the
association and of the director’s, officer’s or employee’s control of or active
participation in an enterprise having activities related to the business of the
association.
(3) In addition to any other penalty
provided by law, an officer, director or employee who violates this section is
liable to the association for any profits inuring to the officer, director or
employee and any loss or excess expense incurred by the association as a result
of such violation. [1975 c.582 §61; 1981 c.472 §6]
722.110 [Repealed by 1975 c.582 §152]
722.112
Indemnification or reimbursement of director, officer, employee or agent. In addition to the authority granted an
association by ORS 57.255 (1985 Replacement Part), a director, officer,
employee or agent may be indemnified by an association, or reimbursed, for
reasonable expenses necessarily incurred, even though the person was negligent
or committed an act or failed to perform a duty for which there is a common law
or a statutory liability if:
(1) The board of directors finds that the
person acted in good faith, in what the person believed to be the best interest
of the association and without knowledge or reasonable cause to believe that
any such action or inaction was a violation of any law, and the board approves
the indemnification or reimbursement;
(2) The Director of the Department of
Consumer and Business Services concurs in the findings of the board adopted
under subsection (1) of this section and approves the indemnification or
reimbursement; and
(3) The indemnification or reimbursement
is approved at an annual or special meeting of the members by a majority of the
votes eligible to be cast. [1975 c.582 §62; 1987 c.197 §19]
722.113
Indemnification fund for officers and directors; rules. The Director of the Department of Consumer
and Business Services may establish by rule a program under which a savings
association may create a fund for indemnifying its directors and officers.
Among the provisions of the program shall be the following:
(1) Provisions for creating and
administering the fund which shall require the pledging of collateral by the
association with the Federal Home Loan Bank of
(2) A limitation on the amount of
collateral that an association may pledge to the fund.
(3) Provisions for maintaining the fund
and replacing expenditures from the fund.
(4) A requirement that an association give
notice to its pledge holder before making any pledge, and authorization to the
pledge holder to refuse a pledge when it determines the pledge to be
inappropriate.
(5) A requirement that, notwithstanding
ORS 60.047 (2)(d), 60.387 to 60.414 and 722.112, an association that creates a
fund shall indemnify a director or officer to the full extent that there are
resources in the fund in all cases except for fraud or bad faith by the
director or officer. [1987 c.224 §2; 1987 c.373 §90a; 1987 c.414 §166c; 1987
c.528 §5; 1991 c.883 §14]
722.114
Membership in association; voting; membership records. (1) Memberships may be granted by the
articles of incorporation or bylaws of an association to borrowers or account
holders of the association, with such rights and liabilities as are allowed by
the articles or bylaws. Unless otherwise provided in the articles or bylaws, a
member may vote in person or by proxy on any matter subject to a vote, at any
regular or special meeting of the members. However, the members of a mutual
association shall include its account holders and members of a stock
association shall include its stockholders. The articles of incorporation may
limit or deny voting rights of any class of members to the extent not
inconsistent with this chapter.
(2) Membership of an account holder in a
mutual or stock association continues until the savings account is transferred
on the books of the association or the account is withdrawn. When a savings account
is issued by an association in the name of two or more persons, a proxy is
valid if executed by any one or more of such persons.
(3) Each association shall maintain
records of the members of the association showing the name and address of each
member and the status of each member as a stockholder, account holder or
borrower. [1975 c.582 §63; 1981 c.472 §7]
722.115 [Amended by 1953 c.401 §11; 1959 c.227 §8;
1963 c.288 §2; repealed by 1975 c.582 §152]
722.116
Member’s right to examine books and records; enforcement; attorney fees. (1) Subject to ORS 722.118 (1), a member
with voting rights has the right to examine in person, or by an agent or an
attorney, at reasonable times, for any proper purpose, the relevant books and
records of the association and to make extracts therefrom. If an association
refuses to allow such a member, or the agent or attorney of such a member, to
so examine and make extracts from such books and records for a proper purpose,
the member may petition any court of competent jurisdiction for an order
compelling the production for examination by such member of the relevant books
and records. The order may be granted if:
(a) The member is acting in good faith and
for a proper purpose in making the demand; and
(b) The confidentiality of the accounts
and records pertaining to savings accounts and personal information in loan
records of other persons is preserved during such production and examination.
(2) The court may award reasonable
attorney fees to the prevailing party in an action under this section. [1975
c.582 §64; 1981 c.897 §101; 1995 c.618 §125]
722.118
Account holder’s and borrower’s right to inspect accounts; member’s right to
communicate with members; enforcement; attorney fees. (1) Every account holder and borrower has
the right to inspect the books and records of a savings association that
pertain to the accounts of the account holder or borrower. Otherwise, the right
of inspection and examination of the accounts of account holders or personal
information in loan records is limited to:
(a) The Director of the Department of
Consumer and Business Services or an authorized representative of the director.
(b) Persons authorized to act for the
association.
(c) Any federal or state instrumentality
or agency authorized to inspect or examine the books and records of an insured
association.
(d) Any person acting under authority of a
court of competent jurisdiction.
(2) A member has the right to communicate
with other members of the association with reference to any question pending or
to be presented for consideration at a meeting of the members. An association
may not defeat such right by a redemption of the member’s accounts in the
association. A member who wishes to communicate with other members shall submit
to the association a request, subscribed by the member, which includes:
(a) The member’s full name and address.
(b) The nature and extent of the member’s
interest in the association at the time the member’s application for
communication is made.
(c) A statement of the reasons for and
purposes of the communication and that the communication is not for any reason
other than the business welfare of the association.
(d) A copy of the communication.
(e) If the communication concerns a
question to be raised at a meeting of the members of the association, the date
of the meeting at which the matter will be presented.
(3) Upon receipt of the request referred
to in subsection (2) of this section, the association shall, within 10 days,
notify the requesting member of:
(a) The approximate number of the members
and the estimated amount of the reasonable costs and expenses of mailing the
communication; or
(b) Its determination to refuse the
request and the specific reasons for its refusal, including its determination
whether or not the request has been made for a proper purpose.
(4) Within seven days after receipt of the
sum specified pursuant to subsection (3)(a) of this section and sufficient
copies of the communication, the association shall mail the communication to
all its members.
(5) If a request referred to by subsection
(2) of this section is refused by the association, the requesting member may
submit the request and the refusal thereof to the director for review. The
director may issue an order denying the request or, if the director finds the
request is not for any reason other than the business welfare of the
association, granting the request and directing the association to comply with
subsection (4) of this section.
(6) In any action arising out of a request
that is refused under this section, the court may award reasonable attorney
fees to the prevailing party. [Formerly 722.303; 1985 c.762 §58; 1995 c.618 §126]
722.120 [Repealed by 1975 c.582 §152]
722.122
Applicability of ORS 722.116 and 722.118 to federal associations. Insofar as ORS 722.116 and 722.118 are not
inconsistent with federal law, they apply to a federal association whose
principal office is located in this state and to the members thereof, except
that the request permitted by ORS 722.118 (5) shall be submitted to the Federal
Housing Finance Board, Washington, D.C., in the case of a federal association
and forwarded to members only upon the order and direction of that board. [1975
c.582 §66; 1999 c.107 §6]
722.124
Notice of cease and desist orders in annual meeting notice. If a domestic association or a director,
officer, employee or agent of a domestic association was issued one or more
orders by the Director of the Department of Consumer and Business Services
under ORS 722.464 within the 12 months immediately preceding the date of the
annual shareholders’ meeting, the domestic association shall include in every
notice required for the annual meeting under ORS 57.150 (1985 Replacement
Part):
(1) A copy of ORS 722.464; and
(2) A statement that the domestic
association or a director, officer, employee or agent of the domestic
association received such an order or orders. [1985 c.786 §62; 1987 c.197 §20;
1987 c.215 §4]
722.125 [Amended by 1959 c.227 §9; 1961 c.398 §10;
repealed by 1975 c.582 §152]
722.130 [Amended by 1953 c.401 §11; 1959 c.227 §10;
1961 c.398 §11; 1971 c.757 §8; 1973 c.368 §2; 1975 c.582 §79; renumbered
722.206]
(Stock;
Dividends and Earnings; General Reserve and Net Worth Accounts)
722.132
Payment for stock issued by a stock association. The consideration for the issuance of stock
of a stock association shall be paid in money or payment in tangible assets at
fair market value. When payment of the consideration for which shares of stock
are to be issued has been received by the association, such stock shall be
considered fully paid and nonassessable. This section shall not be considered
to limit or prohibit an association from establishing stock option, performance
share or other benefit plans involving stock, or issuing stock under such a
plan, if the association has received a certificate of authority and has
satisfied all conditions the Director of the Department of Consumer and
Business Services has attached to the certificate. [1975 c.582 §67; 1981 c.472 §8]
722.134
(a) Sell or transfer to any person stock
of the association that equals or exceeds 10 percent of the total number of
outstanding shares; or
(b) Sell or transfer to any person through
one or more transactions any number of shares of stock adequate to give such
person ownership or control of 10 percent or more of the outstanding shares of
the association.
(2) No person shall acquire, through one
or more transactions, shares of stock sufficient to give such person ownership
or control, directly or indirectly, of record or beneficially, of 10 percent or
more of the outstanding shares of the association, without prior approval of
the director.
(3) Subsections (1) and (2) of this
section also apply:
(a) When a sale or transfer of stock to a
person increases the stock over which the person has ownership or control from
less than 25 percent to 25 percent or more of the outstanding shares; or
(b) When a sale or transfer of stock to a
person increases the stock over which the person has ownership or control from
less than 50 percent to 50 percent or more of the outstanding shares.
(4) As used in this section, “control”
means having the power, whether directly or indirectly and whether individually
or in concert with one or more other persons, to cause action to be taken
regarding voting or other incidents of ownership of the stock.
(5) The director shall disapprove a sale,
transfer or acquisition if the director finds that the character, financial
responsibility, experience and fitness of the person who would acquire control
indicates that approval would not be in the interest of the account holders,
borrowers or stockholders of the association or in the public interest.
(6) If a sale, transfer or acquisition
described by subsection (1), (2) or (3) of this section is made without the
prior approval of the director, the director may order the association to set
aside or revoke the sale, transfer or acquisition, or may order the person to
dispose of the shares or take such other action as is deemed appropriate. [1975
c.582 §68; 1979 c.863 §3; 1981 c.472 §9]
722.135 [Amended by 1955 c.181 §1; repealed by 1959
c.227 §32]
722.136
Ascertainment of earnings; payment of expenses. The gross earnings of a savings association
shall be ascertained at least annually on an accrual basis according to
generally accepted accounting principles. The expenses of an association shall
be paid first from its gross earnings, then from earned surplus and finally
from capital surplus. With the prior approval of the Director of the Department
of Consumer and Business Services, expenses may be paid from stated capital or
from any expense fund of a mutual association. [Formerly 722.145]
722.138
Conditions for payment of dividends, distribution of earned surplus; holding
earned surplus. (1) Before
payment of dividends to stockholders of a stock association or distribution of
earned surplus to account holders of a mutual association, an association shall
provide for:
(a) Its expenses, which shall include
interest paid on savings accounts;
(b) Its definite fixed obligations; and
(c) The general reserve required by ORS
722.142.
(2) Nothing contained in this section
prohibits an association from paying different rates of dividends or interest
upon different classes of stock or savings accounts.
(3) Accrued unpaid interest delinquent for
a period of more than three months shall not be considered earnings of an
association.
(4) A savings association may, in addition
to the general reserve, hold as earned surplus such sum as the board of
directors may, from time to time, consider necessary or desirable. [Formerly
722.155]
722.140 [Amended by 1953 c.401 §11; repealed by 1959
c.227 §32]
722.142
General reserve account for losses and net worth requirements; rules. (1) A savings association shall establish
and maintain a general reserve account for losses and other net worth accounts
adequate to assure solvency of the association.
(2)(a) Each savings association shall
accumulate and maintain as a net worth account a general reserve for the sole
purpose of absorbing losses. At the annual closing date following the
anniversary of its certificate of authority and each annual closing date
thereafter, the general reserve shall have a minimum balance not less than an
amount fixed by rule.
(b) The Director of the Department of
Consumer and Business Services by rule shall fix the required minimum amount of
general reserve accounts of associations. The rule shall provide a uniform
schedule of minimum levels to be reached during the first 20 or more years of
an association’s operation for the purpose of achieving an orderly accumulation
of the general reserve account.
(3) The director may permit an association
to cure a deficiency in its general reserve account by requiring the board of
directors of the association to earmark earned surplus, voluntarily pledged
savings accounts of a mutual association, capital certificates of a mutual
association, or capital surplus or stated capital, including preferred stocks,
of a stock association, and capital notes and debentures subordinated to saving
accounts, as part of its general reserve account in the amounts needed to cure
the deficiency. Amounts so earmarked shall be held for the same purpose as the
general reserve to the extent the earmarked amounts are needed to maintain the
required reserve account level. An association shall not pay dividends or
interest from the reserve account or other funds earmarked for the purpose of
meeting the reserve account requirement.
(4) Every savings association shall build
up and maintain its net worth so that at the close of business on any annual
closing date its net worth accounts shall equal not less than the dollar amount
determined in accordance with the rules to be adequate to assure solvency of
the association. The rules shall provide for an adjustment of the net worth
requirement during the first years of an association’s operation in accordance
with subsection (2)(b) of this section. Notwithstanding other provisions of
this section, the director may consider an association to be in compliance with
this section if applicable federal net worth and reserve requirements for
federally insured associations are satisfied. If an association fails to
establish or maintain the general reserve or the net worth requirements of this
section, the director may in accordance with ORS 722.464 require the
association to take appropriate corrective action.
(5) An association may establish reserve
accounts, in addition to the general reserve, as its board of directors may
authorize, and make transfers to and charge such reserve accounts.
(6) Losses as they are determined, not
charged to other reserve accounts, shall be charged to the general reserve
until the general reserve account is exhausted. After exhaustion of the general
reserve, any remaining losses not charged to other reserve accounts shall be charged
as determined:
(a) In the case of a stock association, to
earned surplus, then capital surplus and then stated capital; or
(b) In the case of a mutual association,
to earned surplus and then the expense fund, if any.
(7) Any insurance reserve required by an
insurer of the savings accounts of an association shall be considered part of
the general reserve for the purpose of subsection (2) of this section. [1975
c.582 §71; 1981 c.472 §10]
722.145 [Amended by 1959 c.227 §11; 1975 c.582 §69;
renumbered 722.136]
722.147 [1959 c.227 §2; repealed by 1975 c.582 §152]
722.148 [1963 c.288 §4; 1967 c.234 §5; 1971 c.757 §9;
1973 c.368 §3; repealed by 1975 c.582 §152]
722.150 [Amended by 1953 c.401 §11; 1959 c.227 §12;
1961 c.398 §12; 1965 c.306 §3; 1967 c.234 §4; repealed by 1975 c.582 §152]
(Miscellaneous)
722.152
Membership fees prohibited.
A savings association shall not charge or collect a membership fee for issuing
a savings account or other obligation of the association. [1975 c.582 §72]
722.154
Publication of financial statements. Every association annually shall prepare a printed statement of the
financial condition of the association and make it available to the public. The
statement shall be in a form and published at the time prescribed by the
Director of the Department of Consumer and Business Services. [1975 c.582 §73]
722.155 [Amended by 1953 c.401 §11; 1959 c.227 §13;
1961 c.398 §13; 1965 c.306 §9; 1967 c.234 §2; 1975 c.582 §70; renumbered
722.138]
722.156
Records. (1) A savings association
shall keep correct and complete records, books of account and minutes of the
proceedings of members, directors and the executive committee. Associations
shall use such forms and observe such accounting principles and practices as
the Director of the Department of Consumer and Business Services by rule
requires from time to time.
(2) An association may cause any or all
records kept by the association to be copied or reproduced by any photostatic,
photographic or microfilming process that correctly and permanently copies,
reproduces or forms a medium for copying or reproducing the original records on
a film or other durable material, and the association may thereafter dispose of
the original record. Such copy or reproduction shall be considered an original
record for all purposes and shall be treated as an original record in all
courts or administrative agencies for the purpose of its admissibility in
evidence. A facsimile, exemplification or certified copy of any such copy or
reproduction reproduced from a film record shall, for all purposes, be
considered a facsimile, exemplification or certified copy of the original
record. [1975 c.582 §74]
722.158 [1975 c.582 §75; repealed by 1987 c.650 §21]
722.160 [Amended by 1959 c.227 §14; repealed by 1975
c.582 §152]
722.162
Conduct of business on holidays; emergency closing. (1) This section applies to domestic
associations and to foreign or federal associations doing business in this
state.
(2) As used in this section:
(a) “Emergency” means any condition or
occurrence which may interfere with the conduct of normal business operations
at the principal office or one or more of the branches of an association, or
which poses an imminent or existing threat to the safety or security of persons
or property.
(b) “Open for the general conduct of
association business” means the office or offices of the association are open
for carrying on substantially all business functions of the association.
(3) The following days are optional
holidays for purposes of this section:
(a) Each Saturday and Sunday.
(b) New Year’s Day on January 1.
(c) Martin Luther King, Jr.’s birthday on
the third Monday in January.
(d) Presidents Day, on the third Monday in
February.
(e) Memorial Day on the last Monday in
May.
(f) Independence Day on July 4.
(g) Labor Day on the first Monday in
September.
(h) Columbus Day on the second Monday in
October.
(i) Veterans Day on November 11.
(j) Thanksgiving Day on the fourth
Thursday in November.
(k) Christmas Day on December 25.
(4) When an optional holiday, other than a
Saturday, falls on Saturday, the association may observe the holiday either on
that day or on the preceding Friday. When an optional holiday, other than a
Sunday, falls on a Sunday, the association may observe the holiday either on
that day or on the succeeding Monday.
(5) Except as otherwise provided in this
section, associations shall be open for the general conduct of association
business on each day that is not an optional holiday.
(6) Any savings association may remain
closed on any holiday with respect to all or any of its functions.
(7) Subject to any applicable federal law
or regulation, an office of a savings association may be closed for any part or
all of any day other than a holiday if the times or days which the office is
open are posted on the premises of the office.
(8) When the Director of the Department of
Consumer and Business Services determines that an emergency exists, the
director may authorize the closing of the principal office or any branch of an
association that may be affected by the emergency. The office or branch so
closed may remain closed until the director determines that the emergency has
ended and for such further time thereafter as may reasonably be required to
prepare the office or branch to reopen.
(9) When the officers of an association
determine that an emergency exists which affects the principal office or a
branch of the association, they may close the office or branch without the
approval of the director for a period not to exceed 48 hours, excluding
holidays, during the continuation of the emergency. An association closing an
office or branch under this subsection shall give prompt notice of its action
to the director or, in the case of a foreign or federal association, to its supervisory
authority.
(10) The principal officers of a savings
association may close any office of the association on any day designated, by
proclamation of the President of the
(11) When any obligation payable at, by or
through an association, principal office or branch falls due on a day on which
it remains closed under this section, it shall be due and payable on the next
day on which the association, office or branch is reopened. Any act authorized,
required or permitted to be performed at, by or with respect to any savings
association, office or branch on a day on which it remains so closed may be
performed on the next succeeding day on which the association, office or branch
is reopened; and no liability or loss of rights of any kind shall result from
such closing. [Formerly 722.185; 1981 c.472 §11; 1985 c.627 §2; 1989 c.582 §2;
1989 c.596 §2; 1995 c.373 §2; 1997 c.188 §2; 2001 c.104 §285]
722.164
Sharing of information on customers by savings associations and related
companies. (1) A savings
association may share financial and credit information concerning its
customers:
(a) With any company of which it directly
or indirectly controls 50 percent or more of the voting shares; and
(b) With any parent company that directly
or indirectly controls 50 percent or more of the voting shares of the savings
association.
(2) Any company controlled by a savings
association in the manner described in subsection (1) of this section and any
parent company of the same savings association, as described in subsection (1)
of this section, may share information concerning their customers with each
other, with the savings association and with any other company so controlled by
the same savings association.
(3) This section shall not be construed as
otherwise permitting or limiting the sharing or disclosure of information.
(4) For purposes of this section, “customers”
includes but is not limited to depositors, borrowers, credit card holders,
lessees, purchasers under contracts and applicants for credit. [1985 c.798 §2]
722.165 [Amended by 1953 c.401 §11; 1961 c.280 §9;
1971 c.757 §10; 1975 c.582 §117; renumbered 722.434]
722.167 [1985 c.804 §4; repealed by 1987 c.491 §9]
722.170 [Amended by 1971 c.757 §11; 1973 c.368 §4;
repealed by 1975 c.582 §152]
722.175 [Amended by 1971 c.743 §418; repealed by
1975 c.582 §152]
722.180 [Amended by 1961 c.398 §14; repealed by 1975
c.582 §152]
722.185 [Amended by 1975 c.582 §76; renumbered
722.162]
722.190 [Amended by 1959 c.169 §2; repealed by 1975
c.582 §152]
722.195 [1963 c.288 §17; 1969 c.138 §4; repealed by
1975 c.582 §152]
722.200 [1965 c.306 §7; repealed by 1975 c.582 §152]
GENERAL
POWERS
722.202
General powers of associations.
A savings association has all the powers conferred by this chapter, or its
charter or certificate of incorporation, both express and implied, and such
other rights, privileges and powers as are incidental thereto or reasonably
necessary or appropriate to the accomplishment of the purpose of the
association. Among other rights, privileges and powers, and except as otherwise
limited by the provisions of this chapter, a savings association may:
(1) Procure insurance of its real estate
and other loans and of its savings accounts from any federal, state or private
agency or corporation authorized to write such insurance and, in the exercise
of such powers, may comply with any requirements of law or rule or order
promulgated and execute any contracts and pay any premiums required in
connection therewith.
(2) Be a member of a Federal Home Loan
Bank, the Federal Deposit Insurance Corporation or any similar federal or state
agency, and do all things required by federal or state law to obtain and
continue such membership.
(3) Acquire savings and pay earnings
thereon, and lend and invest its funds.
(4) Subject to compliance with the reserve
requirements for demand deposits, receive demand deposits any time after the
earliest of one of the following dates:
(a) When federal regulatory authorities
eliminate the interest rate differentials between bank time accounts and
federal association time accounts.
(b) When federal legislation is enacted
permitting charters for federal associations to include demand deposit
authority.
(c) When federal regulatory authorities
permit demand deposits for federal associations.
(5) Subject to regulations of the United
States Treasury Department, serve as depositories for federal taxes or as
treasury tax and loan depositories, and satisfy any requirements in connection
therewith including establishing tax and loan accounts and note accounts (which
are not classified as savings accounts or savings deposits), which are subject
to the right of immediate withdrawal or call, and may require pledging
collateral.
(6) Participate in future and option
transactions through regulated or recognized markets, subject to rules
prescribed by the Director of the Department of Consumer and Business Services.
[1975 c.582 §77; 1979 c.863 §4; 1997 c.631 §536; 1999 c.107 §14]
722.204
Associations may be granted powers of federal associations; rules. Notwithstanding any limitation, condition or
prohibition in this chapter and to carry out the purposes of this chapter, the
Director of the Department of Consumer and Business Services may adopt rules
permitting associations to exercise any right, power or privilege conferred by
federal law or regulation on federal associations doing business in this state.
The director may adopt such a rule if the director finds that the exercise of
any such right, power or privilege serves the public convenience and advantage.
[1975 c.582 §78]
722.205 [Amended by 1963 c.288 §5; 1965 c.306 §4;
1971 c.757 §12; 1973 c.368 §5; repealed by 1975 c.582 §152]
722.206
Power of association to borrow; limitations, exceptions and preferences. (1) A savings association may borrow money
for any of its corporate purposes, when authorized by proper resolution of its
board of directors. However, the aggregate indebtedness of an association
outstanding at any one time shall not exceed 35 percent of its assets.
(2) Notwithstanding the limitation in
subsection (1) of this section, an association may:
(a) Accept savings accounts as provided by
ORS 722.252 to 722.268.
(b) Borrow or obtain advances from the
Federal Home Loan Bank or other similar federal or state agency in such amounts
and upon such terms as may be prescribed by such bank or agency.
(c) Issue capital notes or debentures as
provided by ORS 722.208.
(3) An association may borrow from and
lend to other savings associations or federal associations.
(4) When the Director of the Department of
Consumer and Business Services considers an indebtedness of an association
incurred under this section to be detrimental to the interests of its account
holders or other creditors, the director shall require the association to
change or reduce its indebtedness to an extent the director considers
reasonable, giving the association a reasonable time in which to effect such
change or reduction of indebtedness.
(5) A savings association may assign or
pledge any property of the association, or repledge any shares of the stock
pledged to the association, as collateral security for loans obtained for any
of its corporate purposes.
(6) Any pledgee or other lawful holder of
any note or other evidence of indebtedness due to an association, has the right
to enforce, in the pledgee’s or holder’s own name or in the name of the
association, all appropriate remedies to enforce collection, whether or not the
stock described in connection with the note is held by such pledgee or holder.
(7) Obligations of an association are,
upon liquidation, payable out of the assets of the association in the following
order of preferences to:
(a) Secured creditors.
(b) Financial institutions, as defined in
ORS 706.008.
(c) Other creditors, including savings
account holders, unless the bylaws of the association provide a different order
of preference between account holders and other creditors.
(d) Stockholders. [Formerly 722.130; 1981
c.472 §14; 1997 c.631 §537]
722.208
Capital notes and debentures.
(1) A savings association may issue and sell its capital notes or debentures
with the prior approval of the Director of the Department of Consumer and
Business Services and subject to any sinking fund or other conditions the
director may impose. An association shall also have the prior approval of a
majority of the stockholders owning a majority of the issued and outstanding
shares of stock of the association to issue convertible capital notes or
debentures.
(2) Capital notes or debentures issued by
a stock association may be converted into stock in accordance with provisions
approved by the director and contained in the capital notes or debentures.
Convertible capital notes or debentures may be issued without offer thereof to
existing stockholders if so authorized by the director provided that the right
of preemption does not otherwise exist.
(3) Capital notes and debentures shall be
an unsecured indebtedness of the association and shall be subordinate to the
claims of account holders and all other creditors of the association,
regardless of whether the claims of account holders or other creditors arose
before or after the issuance of such debentures or capital notes. In the event
of liquidation, all account holders and other creditors of the association
shall be entitled to be paid in full before any payment shall be made on
account of principal or interest on capital notes or debentures. Capital notes
and debentures shall contain a statement of the rights and priorities of the
lenders.
(4) The amounts of outstanding capital
notes or debentures legally issued by an association shall be treated as
capital for the purpose of computing general reserve requirements. [1975 c.582 §80;
1979 c.863 §5]
722.210 [Repealed by 1967 c.234 §6 (722.211 enacted
in lieu of 722.210)]
722.211 [1967 c.234 §7 (enacted in lieu of 722.210);
repealed by 1975 c.582 §152]
722.212
Trust business powers. A
domestic association may, in addition to other powers granted by this chapter,
conduct a trust business. In the conduct of a trust business an association may
exercise all the powers of a trust company, as defined by ORS 709.150, upon
compliance with the laws of this state relating to the regulation of a trust
business. [1975 c.582 §81]
722.214
Acting as trustee or custodian under Employee Retirement Income Security Act of
1974. A savings association
may act as trustee or custodian within the contemplation of subsections (d) and
(f) of section 401 and subsection (a) of section 408 of the Internal Revenue
Code of 1954, as amended; however, an association shall not have the power to
invest assets received as such a trustee or custodian other than in savings
accounts of the association unless it complies with ORS 722.212. [1975 c.582 §82]
722.215 [Repealed by 1975 c.582 §152]
722.220 [Repealed by 1975 c.582 §152]
722.225 [Amended by 1975 c.582 §129; renumbered
722.468]
722.230 [Amended by 1959 c.227 §15; 1961 c.398 §15;
repealed by 1969 c.138 §15]
722.235 [Repealed by 1971 c.743 §432]
722.240 [Amended by 1959 c.227 §16; 1963 c.288 §6;
1971 c.743 §419; repealed by 1975 c.582 §152]
722.245 [Repealed by 1975 c.582 §152]
722.250 [Repealed by 1975 c.582 §152]
SAVINGS
OPERATIONS
722.252
Account holders as creditors of association. The relationship between an association and its account holders is
that of debtor and creditor. [1975 c.582 §83]
722.254
Savings accounts. (1) A
savings account may be opened and owned by any one or more persons, by a public
officer, or a political subdivision or other governmental unit. Deposits to
savings accounts may be made only in cash or its equivalent. Except as limited
by the board of directors from time to time, an account holder may make additions
to a savings account in such amounts and at such times as the account holder
may elect. An association may refuse to issue, renew or continue a savings
account.
(2) A savings association may issue any
type of savings account contract not prohibited by this chapter or other
applicable law, or by the rules adopted pursuant thereto. Any special terms and
provisions applicable to a savings account, the ownership thereof and the
conditions upon which withdrawals may be made shall be clearly and truthfully
set forth in writing.
(3) A savings association shall not offer
or issue any savings account contract unless the terms of the contract and the
forms used to evidence ownership of the account have been approved by the
Director of the Department of Consumer and Business Services. The evidence of
ownership of a savings account is not subject to ORS chapter 78.
(4) Transfer of a savings account or any
interest therein is not binding upon the association until the transfer has
been made on the books of the association. The association may treat the holder
of record of a savings account as the owner thereof for all purposes until a
transfer has been made on the books of the association. This subsection does
not apply to negotiable certificates of deposit or other negotiable instruments
issued or caused to be issued by an association. [1975 c.582 §84; 1981 c.472 §15;
1985 c.676 §60]
722.256
Withdrawal from savings accounts; rules. (1) An account holder may withdraw part or all of the funds of the
account holder subject to the terms applicable to the savings account of the
account holder.
(2) The Director of the Department of
Consumer and Business Services shall prescribe by rule:
(a) The maximum penalty that may be
applied by an association for premature withdrawal from a savings account; and
(b) The conditions under which the penalty
may be applied.
(3) An account holder may withdraw all or
part of the account pledged as security for any purpose only in accordance with
the terms of the pledge. [1975 c.582 §85]
722.257
Time period for drawing on item deposited in savings or federal association;
disclosure. (1) A savings
association or federal association shall allow an account holder who deposits
an item in the account holder’s account to draw against the item within the
time period applicable to that item under a schedule adopted by the Director of
the Department of Consumer and Business Services.
(2) Except as provided in subsection (3)
of this section, in any agreement between a savings association or federal
association and its customer, the savings association or federal association
may not specify a period of time for purposes of drawing on an item that is
longer than any applicable period specified in the schedule adopted by the
director.
(3) This section does not prohibit a
savings association or federal association and its customer from agreeing to a
longer period than that specified in the schedule adopted by the director for
drawing against items because of special circumstances, if the agreement is not
contained in a preprinted form and is entered into by the savings association
or federal association only in special circumstances.
(4) The provisions of this section do not
alter or impair any right or obligation under ORS chapter 74.
(5) Savings associations and federal
associations shall disclose in writing the schedule adopted by the director and
in effect on the date of the disclosure. For persons who became account holders
prior to the date on which the director adopts a schedule and who remain
account holders thereafter, the disclosure shall be made within 30 days after
the director adopts the schedule. For persons who become account holders after
the date on which the director adopts the schedule, the disclosure shall be
made prior to the opening of the account holder’s account.
(6) Every savings association and federal
association shall post or provide in a conspicuous location in its principal
place of business and at each branch a notice stating the schedule adopted by
the director.
(7) As used in this section, “item” has
the meaning given that term in ORS 74.1040 and includes, without limitation,
checks, negotiable orders of withdrawal and share drafts. [1987 c.491 §6; 1997
c.631 §538]
722.258
Payment of accounts of minors and persons under disability. Unless the written savings account contract
provides otherwise, when a minor or other person under legal disability holds a
savings account, the association or federal association may pay out the funds
to such person or the assigns of such person with like effect as if such person
were of full age and legal capacity. Such payment shall be in all respects
valid and a complete discharge of the obligation of the association or federal
association as to the amount so paid. [1975 c.582 §86; 1987 c.658 §2]
722.260 [1967 c.257 §3; repealed by 1975 c.582 §152]
722.262
Payment of savings account or demand deposit account on death of holder;
affidavit requirements. (1)
On the death of an account holder or a holder of a demand deposit account, if
the savings liability of an association or federal association on all savings
accounts of the deceased, and the amounts held in all demand deposit accounts
of the deceased, is $25,000 or less, the association or federal association
may, upon receipt of an affidavit from the person claiming the account as
provided in subsection (2) of this section, pay the withdrawal value of the
accounts of the deceased holder:
(a) To the surviving spouse on demand of
the surviving spouse at any time after the death of the holder;
(b) If there is no surviving spouse, to
the Department of Human Services, on demand of the department no less than 46
days and no more than 75 days from the death of the holder if the holder
received public assistance under ORS 411.708, 411.795 or 414.105;
(c) If there is no surviving spouse and no
department claim, to the holder’s surviving children 18 years of age or older;
(d) If there is no surviving spouse,
department claim or surviving child 18 years of age or older, to the holder’s
surviving parent; or
(e) If there is no surviving spouse,
department claim, surviving child 18 years of age or older or surviving parent,
to the holder’s surviving brothers and sisters 18 years of age or older.
(2) The affidavit shall:
(a) State where and when the account
holder or holder of a demand deposit account died;
(b) State that the total withdrawal value
of all savings and demand deposit accounts of the deceased holder in all
associations in Oregon, including federal associations, does not exceed $25,000;
(c) Show the relationship of the affiant
to the deceased holder; and
(d) Embody a promise to pay the expenses
of last sickness, funeral expenses and just debts of the deceased holder out of
the account to the full extent of the account if necessary, in the order of
priority prescribed by ORS 115.125, and to distribute any remaining moneys to
the persons who are entitled to those moneys by law.
(3) In the event the holder died intestate
without known heirs, an estate administrator of the Department of State Lands
appointed under ORS 113.235 shall be the affiant and shall receive the
withdrawal value of the accounts as escheat property.
(4) A savings association or federal
association is under no obligation to determine the relationship of the affiant
to the deceased holder. Payment made in good faith to the person or the
Department of Human Services or an estate administrator of the Department of
State Lands making the affidavit is a full acquittance and release of the
association or federal association for the amount so paid.
(5) A probate proceeding is not necessary
to establish the right of the surviving spouse, department, surviving children,
surviving parent or surviving brothers and sisters to withdraw an account as
provided by this section. However, if a personal representative is appointed in
an estate of a deceased holder whose account has been withdrawn under this
section, the person withdrawing the account shall account for it to the
personal representative. [1975 c.582 §87; 1981 c.298 §4; 1981 c.472 §16; 1987
c.658 §3; 1999 c.594 §1; 2003 c.395 §22; 2005 c.381 §27; 2007 c.369 §2]
722.264
Savings accounts as legal investments and as security. (1) Personal representatives, trustees and
other fiduciaries; banks, trust companies, credit unions and similar financial
organizations; charitable, educational and eleemosynary corporations, funds and
organizations; and municipal and other public corporations and public officials
may invest funds held by them, without any order of any court, in savings
accounts of savings associations and federal associations. Such investments
shall be considered legal investments.
(2) A savings association may pledge its
assets to secure public funds as provided under ORS chapter 295. For the
purposes of this section, “public funds” has the meaning given that term by ORS
295.001.
(3) When a deposit of securities or a bond
with security is required for any purpose under the laws of this state or
otherwise, a savings account of an association or federal association is
acceptable for such a deposit or security.
(4) This section is supplemental to other
laws relating to legal investments and to the deposit of securities and the
filing of bonds for any purpose.
(5) Notwithstanding any other provision of
law, when a savings association or federal association pledges securities or
any other assets to secure public funds, the custodian of such public funds
shall be a lien creditor, as defined in ORS 79.0102, with respect to the
securities or assets which have been pledged to secure such funds. [1975 c.582 §88;
1989 c.232 §1; 1991 c.67 §191; 2001 c.445 §181]
722.266
Savings accounts as security for loans. An association may take the pledge of a savings account of the
association held by a person other than a borrower as security or additional
security for any loan made or purchased by the association. [1975 c.582 §89]
722.268
Service charge on dormant accounts. (1) A savings association may make a service charge against a savings
account if the liability of the association on the account is $25 or less and,
at the time the charge is made, the account holder has not within the last two
years:
(a) Increased or decreased the amount of
the account or presented an appropriate record for the crediting of interest or
earnings;
(b) Corresponded with the association
concerning the account; or
(c) Otherwise indicated an interest in the
account as evidenced by a memorandum on file with the association.
(2) Service charges shall not be made
unless 30 days prior to making the first charge the association mails to the
account holder a notice that service charges will be made under the conditions
described by subsection (1) of this section. The notice shall be sent by
registered or certified mail to the account holder at the last-known address of
the account holder as shown on the records of the association. A service charge
made under this section shall not exceed 50 cents for any calendar month. [1975
c.582 §90]
INVESTMENT
OPERATIONS
(Investment
Powers)
722.302
Minimum liquid assets; rules.
(1) Every savings association shall have on hand at all times cash and other
assets readily convertible into cash having a value of not less than a
percentage of its savings liability fixed by rule as necessary for the prudent
conduct of the affairs of the association. The Director of the Department of
Consumer and Business Services shall from time to time by rule define assets
readily convertible to cash and fix the minimum percentage of the savings
liability of any association that shall be used to determine the value of cash
and other assets necessary to comply with this subsection. The director may
consider an association to be in compliance with this section if the
association satisfies applicable federal liquidity requirements for federally
insured associations.
(2) Cash and assets readily convertible to
cash, within the limits required by subsection (1) of this section, shall not
be pledged or otherwise held as security for the payment of any obligation of
the association.
(3) Unless an association is in compliance
with subsection (1) of this section, it shall not make any loan or investment
without the prior approval of the director, except:
(a) To invest in cash or other assets
readily convertible to cash;
(b) To invest in a loan secured wholly by
pledge of a savings account issued by the association; or
(c) To honor a loan commitment made prior
to the association’s failure to meet the requirement of subsection (1) of this
section. [1975 c.582 §91; 1981 c.472 §17]
722.303 [1967 c.234 §9; 1975 c.582 §65; renumbered
722.118]
722.304
Permitted investments; limitations. (1) A savings association may invest its assets without limit in:
(a) Assets readily convertible to cash, as
defined under ORS 722.302, and deposits and accounts in and obligations of
banks;
(b) Bonds and other obligations of the
(c) Bonds and other obligations that are
guaranteed as to principal and interest by the
(2) A savings association may invest, and
may have invested at any time, not to exceed 30 percent of its assets in:
(a) Bonds, other obligations and stock
approved by the Director of the Department of Consumer and Business Services
and issued by an agency of the United States or a federally sponsored
instrumentality; and bonds and other obligations approved by the director and
issued by a state, or by a city, county, municipal corporation, political
subdivision or special district of any state; the preferred stock, bonds and obligations
of a corporation domiciled in the United States, which are approved by the
director and are rated at the time of purchase in one of the four highest
grades by a recognized service organization that has been regularly engaged for
a period of 10 years or more in rating or grading bonds; or loans secured by
such obligations;
(b) Real and personal property interests
as authorized by ORS 722.312 and 722.314;
(c) Stock and obligations of service
corporations, as authorized by ORS 722.308;
(d) Other prudent investments as
authorized by ORS 722.306;
(e) Loans as authorized by ORS 722.332 to
722.342; and
(f) Commercial paper, certificates of
deposit, banker’s acceptances and similar commercial items commonly used in
trade or business and issued or guaranteed by an insured institution, as
defined in ORS 706.008.
(3) An association shall not invest any
assets as described by subsection (2)(c) to (f) of this section unless the
association on its last monthly closing date satisfied or could have satisfied
its minimum general reserve and net worth requirements as determined under ORS
722.142.
(4) If the director finds that
notwithstanding subsection (3) of this section, it is an unsafe or unsound
practice for an association to exercise the powers granted by subsection (2)(c)
to (f) of this section, the director may issue a cease and desist order
directing the association to cease exercising such powers. An order issued
under this subsection may be based on, but need not be limited to, a finding
that the financial condition or management capability of the association is not
adequate to exercise such powers and assume the risks involved in the exercise
of such powers.
(5) A savings association may invest its
assets in a service corporation as provided in ORS 722.309. [1975 c.582 §92;
1977 c.166 §3; 1979 c.863 §6; 1981 c.472 §18; 1983 c.321 §5; 1985 c.762 §59;
1987 c.911 §17; 1997 c.631 §539; 2005 c.80 §6]
722.305 [Amended by 1961 c.398 §16; 1965 c.306 §5;
1967 c.257 §4; repealed by 1975 c.582 §152]
722.306
“Prudent person” investment rule. (1) A savings association may invest its assets in a manner not
expressly prohibited by law if such investments are made in the exercise of the
judgment and care under the circumstances then prevailing which persons of prudence,
discretion and intelligence exercise in the management of their own affairs not
in regard to speculation but in regard to the permanent disposition of their
funds, considering the probable income as well as the probable safety of their
capital. An association shall not invest in the voting common stock of a
corporation unless the association acquires a majority of the shares of the
voting stock of the corporation.
(2) Investments held at any one time under
this section shall not exceed in the aggregate an amount equal to 50 percent of
the net worth accounts of the association on its last monthly closing date. An
association is not required to divest itself of any investments made under this
section if the investments met the requirements of this section at the time
they were made.
(3) If the Director of the Department of
Consumer and Business Services has reason to believe that loans or other
investments made pursuant to this section are not prudent, proper or sound
investments or are not, directly or indirectly, yielding an income or benefit,
the director may direct the association to report to the director under oath
the amount and nature of such loans or investments and any security therefor,
their market value and other pertinent information. If the director thereafter
determines that any such investment is not prudent, proper or sound, the
director may issue an order directing the association to dispose of such
investment within a reasonable time as designated by the director. [Formerly
722.497; 1979 c.863 §7]
722.308
Investment in service corporations; services performed for association to be
subject to regulation and examination by director; rules. (1) An association may invest in the stock
and obligations of one or more service corporations. However, an association
shall not make such an investment, without the prior approval of the Director
of the Department of Consumer and Business Services, when any of the voting
stock of the service corporation is available for purchase by or owned by persons
other than savings associations or federal associations.
(2) The director shall, by rules adopted
to carry out this section, prescribe a maximum percentage of assets not to
exceed five percent that an association may invest in service corporations.
(3) An association may not cause to be
performed, by contract or otherwise, any of the services for itself, whether on
or off its premises, unless assurances satisfactory to the director are
furnished to the director by both the association and the person or organization
performing the services that the performance of the services will be subject to
regulation and examination by the director to the same extent as if the
services were performed by the association itself on its own premises.
(4) This section does not apply to a
service corporation described in ORS 722.309. [1975 c.582 §94; 1983 c.37 §36;
1983 c.321 §6; 1997 c.631 §540]
722.309
Service corporations undertaking public projects; authority to invest and
organize; conditions; corporate form; functions. (1) As provided in this section:
(a) A savings association may invest its
assets in a service corporation described in this section.
(b) A savings association may organize a
service corporation described in this section as a wholly owned subsidiary of
the savings association and invest the savings association’s assets in the
corporation.
(2) A savings association may invest in or
organize and invest in a service corporation under subsection (1) of this
section if the following conditions are satisfied:
(a) The projects undertaken by the service
corporation must be predominantly of a civic, community or public nature, and
not merely of a private or entrepreneurial nature.
(b) The savings association’s investments
in the service corporation must comply with the prudent investment rule under
ORS 722.306.
(c) The savings association’s aggregate
investment in service corporations and their projects must not exceed one
percent of the assets of the savings association.
(d) The savings association must submit to
the Director of the Department of Consumer and Business Services its proposal
for investing in or organizing and investing in a service corporation and the
proposal must receive the director’s approval.
(e) The membership of the board of
directors of the community development corporation must be representative of
the community in which the corporation is to operate.
(f) If the corporation is organized under
the Oregon Nonprofit Corporation Law, the stock of the corporation purchased by
the savings association, or the savings association’s membership in the
corporation if it does not issue stock, shall be carried on the books of the
savings association at a value not exceeding $1.
(3) A service corporation may be organized
under this section as a for-profit corporation under ORS chapter 60 or as a
nonprofit corporation under the Oregon Nonprofit Corporation Law.
(4) A service corporation to which this
section applies is a corporation that is authorized under its articles of
incorporation to:
(a) Acquire real estate. This paragraph
does not authorize real estate investment that is primarily speculative in
nature.
(b) Make equity investments in small
businesses and in development projects that primarily benefit small businesses.
(c) Participate in joint ventures with
outside partners. [1983 c.321 §8; 1987 c.197 §21]
Note: 722.309 and 722.311 were added to and made a
part of ORS chapter 722 by legislative action but were not added to any smaller
series therein. See Preface to Oregon Revised Statutes for further explanation.
722.310 [Amended by 1959 c.227 §17; 1961 c.398 §17;
repealed by 1975 c.582 §152]
722.311
Proposal to invest in or organize service corporation for public projects;
approval by director. (1) A
savings association shall submit to the Director of the Department of Consumer
and Business Services, on an application form designed by the director, its
proposal to organize or invest in a service corporation under ORS 722.309. The
savings association shall describe in detail on the application the scope of
development activities that the service corporation will undertake. The
director shall approve or disapprove the application as provided in this
section. If the director approves an application to organize a service
corporation, the savings association shall incorporate the proposed corporation
as provided by law.
(2) The director may submit an application
to any appropriate state agency or city, county or other local government for
its advice and assistance on determining the need and practicability of the
projects proposed in the application. [1983 c.321 §9]
Note: See note under 722.309.
722.312
Real property investments; limit on property, improvements and furnishings for
association’s business offices.
(1) An association may invest its funds in real property, including property
convenient for locations for the transaction of its business.
(2) An association shall not invest or
obligate itself to invest more than 10 percent of its assets in the total cost
of real property, including improvements thereon, for its business locations,
without the prior approval of the Director of the Department of Consumer and
Business Services.
(3) An association may invest a reasonable
amount in property such as furniture, fixtures and equipment, for use in
carrying on its own business.
(4) An association shall not enter, or at
any time carry on its books, the real property and improvements thereon owned
by it under subsection (1) of this section at a valuation exceeding actual cost
to the association. Investments in improvements to real property held under
this section and investments under subsection (3) of this section shall be
reduced annually by direct depreciation or creation of a depreciation reserve. [1975
c.582 §95]
722.314
Real property acquired by foreclosure; valuation. (1) A savings association may purchase at
any sale, public or private, any real property upon which it has a mortgage,
judgment, lien or other claim. It may lease, sell, convey, exchange or mortgage
such property, without regard to the requirements of ORS 722.322 (7), or the
association may hold such property as an investment under ORS 722.312.
(2) An association shall not enter or,
except as provided by subsection (3) of this section, carry on its books real
property acquired pursuant to subsection (1) of this section at a value in
excess of the amount expended by the association in the acquisition of the
property. The amount expended may include the principal balance on the loan and
taxes, insurance, attorney fees and court costs, to the date of acquisition of
the property, less the withdrawal value of any savings account pledged as
security for the loan.
(3) If an association makes permanent
improvements on property acquired by the association pursuant to this section,
it may add the cost of such improvements to the value of the property. [1975
c.582 §96]
722.315 [Amended by 1953 c.401 §11; 1957 c.224 §1;
1961 c.398 §18; 1963 c.288 §7; 1967 c.257 §5; repealed by 1975 c.582 §152]
722.320 [Amended by 1961 c.398 §19; repealed by 1975
c.582 §152]
(Loans)
722.322
Real estate loans. (1) A
savings association may invest any percentage of its assets in loans secured by
mortgages or real estate contracts on interests in real property. Investments
made by an association under this section shall be made in accordance with
sound lending practices and the rules adopted by the Director of the Department
of Consumer and Business Services to carry out this section.
(2) A loan on the security of a mortgage
shall not exceed 100 percent of the appraised value of the security. The term
of a straight loan shall not exceed five years.
(3) If a loan is secured by a mortgage
which is junior to prior mortgages or liens, the sum of the loan amount and the
amount unpaid upon prior encumbrances, excluding taxes not due, shall not
exceed the applicable limitations of this chapter.
(4) If a loan is secured by a leasehold
interest, the loan shall provide that:
(a) The loan will be completely paid
within a period of four-fifths of the term of the leasehold; and
(b) The association is entitled to be
subrogated to all rights of the lessee under the leasehold.
(5) A mortgage shall not be subject to any
prior mortgage, liens or encumbrances against the property unless the aggregate
amount of such mortgage and any prior mortgage, liens and encumbrances does not
exceed 100 percent of the appraised value of the property.
(6) An association may invest in real
estate contracts if the principal amount due under the contract does not exceed
100 percent of the appraised value of the property and the association holds or
acquires the title to the property covered by the contract.
(7) Unless the excess is guaranteed or
insured, or an excess reserve is established, as provided by ORS 722.326, an
association shall not:
(a) Make a loan upon the security of an
interest in real property in excess of 90 percent of the appraised value
thereof; or
(b) Invest in a real estate contract
having a balance due in excess of 90 percent of the appraised value of the property.
(8) An association may renew or extend a
loan made or contract purchased under this section if, as renewed or extended,
the loan or contract complies with the limitations and conditions provided
under this section at the time of the renewal or extension.
(9) As used in this section:
(a) “Mortgage” includes a first or second
mortgage, a trust deed or a first lien on a leasehold.
(b) “Prior liens and encumbrances” does
not include:
(A) A lease, in case the loan is secured
by a mortgage on an interest, other than a leasehold interest, in real
property.
(B) A sublease, in case the loan is
secured by a mortgage on a leasehold interest. [1975 c.582 §97; 1979 c.863 §8]
722.324
Appraisal of property prior to loan. A savings association shall not make or acquire a loan secured by an
interest in real property except upon the report, in writing, of an appraiser
appointed by the association. The report shall state the fair market value of
the property to be used as security. Each appraisal report shall contain
sufficient information and data concerning the appraised real property interest
to substantiate the fair market value of the property as determined by the
appraiser. [1975 c.582 §98]
722.325 [Amended by 1953 c.401 §11; 1961 c.398 §20;
1973 c.823 §147; repealed by 1975 c.582 §152]
722.326
Real estate loans in excess of 95 percent of appraised value; reserve for
payment of loss. (1) An
association may make a loan or invest in a real estate contract described by
ORS 722.322 (7) if the excess is guaranteed or insured against loss by a
mortgage guarantee insurance company licensed to transact insurance in this
state. When the excess does not exceed 95 percent of the appraised value, an
association may, in lieu of such guarantee or insurance, establish an excess
reserve account for the payment of losses.
(2) When an excess reserve account is
established under subsection (1) of this section, the association shall from
time to time place in the excess reserve account sums adequate to maintain a
balance in the account equal to five percent of the entire unpaid balance on
all such loans and contracts. Any losses on such loans and contracts shall be
charged to the excess reserve account until it is exhausted and, after that,
such losses may be charged to earned surplus or other reserve accounts. [1975
c.582 §99; 1979 c.863 §9]
722.328
Loans to account holders. A
savings association may invest its assets in loans to its account holders on
the security of its savings accounts, but any such loan shall not exceed 100
percent of the withdrawal value of the security given. [Formerly 722.415]
722.330 [Amended by 1961 c.398 §21; 1973 c.823 §148;
repealed by 1975 c.582 §152]
722.332
Loans secured by life insurance policies; education loans. (1) A savings association may invest its
funds in loans secured by the pledge of policies of life insurance. Any such
loan shall not exceed the cash value of the policy. The assignment of the
policy shall be acknowledged by the insurer.
(2) A savings association may invest its
funds in loans for the payment of expenses of college or professional education
if the loans are insured or guaranteed as provided by ORS 722.352 (2). For the
purpose of this subsection:
(a) “College education” means education at
an institution that provides an educational program for which it awards a
bachelor’s or higher degree, or at an institution that provides not less than a
two-year program which is acceptable for full credit toward such a degree.
(b) “Professional education” means any
course of study or training designed to increase the ability of a person to
obtain or advance in employment of any kind. [1975 c.582 §101; 1995 c.343 §70]
722.334
Secured and unsecured loans related to real property; advance of credit for
manufactured dwelling financing or home construction; loans to certain
subsidiaries. A savings
association may invest its assets in:
(1) Loans, with or without security, for
the alteration, repair or improvement of real property;
(2) Loans, with or without security, for
the equipping or furnishing of residential property;
(3) Loans, advances of credit and the
purchase of obligations representing loans and advances of credit for the
purpose of financing the sale or purchase of manufactured dwellings; and
(4) Advances of credit for the purpose of
financing the construction of residential property.
(5) Loans to nonservice corporation
subsidiaries not to exceed two percent of association assets provided that the
association controls a majority of the shares of voting stock of the subsidiary.
[1975 c.582 §102; 1979 c.863 §9a]
722.335 [Repealed by 1959 c.227 §32]
722.336
Personal loans. A savings
association may make personal loans, secured or unsecured, evidenced by
promissory notes. Each note shall require repayment in full within a period not
to exceed 10 years from the date of the note. An association shall not, under
this section, lend more than $20,000 to one individual at any one time. The
aggregate amount of such loans shall not exceed 10 percent of the assets of the
association. [1975 c.582 §103; 1977 c.368 §1; 1979 c.863 §10]
722.338
Loans to officer or employee to purchase association stock. (1) A stock association may invest its
assets in loans to the employees, including officers, of the association and
any wholly owned subsidiary, to enable them to purchase stock of the
association or in a service corporation owned by the association, but:
(a) The aggregate amount of such loans
outstanding at any one time shall not exceed one percent of its assets;
(b) The amount so loaned to any one person
shall not exceed 90 percent of the fair market value or cost of the stock,
whichever is lower, at the time of the purchase;
(c) The association shall obtain or retain
a security interest in the stock so acquired until the loan is paid in full;
(d) The maximum amount due on such loans
to one person at any one time shall not exceed $20,000; and
(e) The terms of the loan must provide for
repayment within a period of not more than 10 years.
(2) Except as provided by subsection (1)
of this section, an association shall not loan any of its funds upon the
security of its own stock. [Formerly 722.424; 1979 c.863 §11]
722.340 [Amended by 1961 c.398 §22; repealed by 1975
c.582 §152]
722.342
Loans to directors, officers and persons related to them; conditions; exemptions;
rules. (1) Except as
provided by subsection (2) of this section, an association shall not directly
or indirectly make a loan to or for the benefit or use of an individual,
partnership, association or corporation or subsidiary thereof if:
(a) Any officer or director of the lender
has, or represents to the public to have, a contract or right to control or
manage the borrower;
(b) Any officer or director of the lender
is the proprietor of or a partner in the borrower; or
(c) Twenty-five percent or more of the
stock of the borrower is owned or controlled, by option or otherwise, by any
one or more of the officers or directors of the lender.
(2) An association may make any loan to a
director or officer of the association that is authorized under ORS 722.302 to
722.356. However, if the loan is made to an executive officer or director, all
of the following conditions must be met:
(a) An independent appraiser shall be
employed by the lending association to appraise the security for the loan.
(b) The loan shall have the prior approval
of not less than two-thirds of the authorized members of the board of directors
and the approval shall be entered in the minutes of the meeting at which the
loan is approved.
(c) A director who is directly or
indirectly interested in the loan shall fully disclose to the other directors
on the board of the lending association the director’s interest in the loan or
in the borrower. The director shall abstain from voting on the question of
approval of the loan.
(d) The loan must be made under a written
agreement.
(3) The directors of a savings
association, if the association makes loans to its directors, officers or
employees, shall establish written procedures for approving such loans.
(4) The Director of the Department of
Consumer and Business Services by rule may exclude from the applicability of
subsection (2) of this section any indebtedness for which the requirements of
subsection (2) of this section create, according to the director, an excessive
burden in regard either to the savings association or to the borrower without
an offsetting regulatory benefit.
(5) Notwithstanding the conditions
described in subsection (2)(a), (b) and (c) of this section, the directors of
the lending association need not first approve a loan to an executive officer
or director unless the loan, when aggregated with all other loans to the
executive officer or director and to all related interests of the executive
officer or director, as defined by ORS 722.458, exceeds $25,000. [1975 c.582 §105;
1979 c.863 §12; 1985 c.786 §59]
722.345 [Amended by 1961 c.398 §23; repealed by 1975
c.582 §152]
722.350 [Amended by 1959 c.227 §18; 1971 c.757 §13;
repealed by 1975 c.582 §152]
(General
Provisions)
722.352
Participation, insured or guaranteed loans. (1) A savings association may participate with another lender or
lenders in making loans of any type that an association may otherwise make, if
the other lender or each of the other lenders is:
(a) An instrumentality or agency of the
(b) Insured by the Federal Deposit
Insurance Corporation;
(c) An insurance company supervised by a
federal or state agency;
(d) A Federal Housing Administration
approved mortgagee; or
(e) Another lender approved by the
Director of the Department of Consumer and Business Services.
(2) Without regard to any term or
loan-to-security limitation provided by ORS 722.302 to 722.356, a savings
association may make, buy and sell any loan, secured or unsecured, if the loan
is insured or guaranteed. A loan shall be considered insured or guaranteed if:
(a) It is insured or guaranteed in any
manner in part or in full by the United States or this state, or an
instrumentality thereof; or
(b) A commitment so to insure or guarantee
or a conditional guarantee has been issued.
(3) A savings association may buy, sell or
participate in the purchase or sale, with or without servicing, of all or a
portion of any loan or of a pool of loans which may be evidenced by a
participation certificate, mortgage-backed bond or note, or mortgage
pass-through certificate. The loans must be of a type eligible for origination
and investment under this chapter. If the association is a buyer, the
originator and services must qualify under subsection (1) of this section. [Formerly
722.422; 1979 c.863 §13; 1999 c.107 §15]
722.354
Maximum loans to one person or on one property; interest. (1) A savings association shall lend no more
than five percent of its total assets on the security of one property or to one
person. However, an association with assets under $500,000 may lend up to a
maximum of $40,000 in loans on one property or to one person.
(2) ORS 708A.255 applies to interest or
other charges a savings association or a federal association may contract for
and receive for a loan or the use of money. [1975 c.582 §107; 1977 c.791 §5;
1981 c.412 §5; 1981 c.472 §19; 1997 c.631 §541]
722.355 [Amended by 1959 c.227 §19; 1961 c.398 §24;
repealed by 1975 c.582 §152]
722.356
Types of investments and loans limited; effect of unauthorized loan or investment;
liability of officers. (1) A
savings association shall not make, purchase or hold any investments or loans
except investments and loans of the kinds authorized by ORS 722.302 to 722.356.
However, a loan or investment made in violation of this subsection shall be due
and payable according to its terms and the obligation thereof shall not be
impaired.
(2) A director or officer of an
association who knowingly violates, participates in or assents to a violation of,
or who knowingly permits any of the officers or agents of the association to
violate, subsection (1) of this section is liable individually for all losses
that the association, its account holders or stockholders sustain in
consequence of such violation.
(3) The Director of the Department of
Consumer and Business Services may require a director or officer of an
association who knowingly violates, participates in or assents to a violation
of subsection (1) of this section, or who knowingly permits any officer or
agent of the association to violate subsection (1) of this section, to deposit
with the association an indemnity bond, insurance or collateral. Such deposit
shall be of a kind and amount sufficient to indemnify the association against
losses that the association, its account holders or stockholders may sustain in
consequence of such violation. The amount considered sufficient to indemnify
the association shall be determined by the director. When an unauthorized
investment has been sold or disposed of without recourse, the director shall
direct all or that part of the indemnity remaining after deducting any loss to
be released. When the balance of an unauthorized loan has been reduced to an
amount which would permit the loan to be made in accordance with ORS 722.302 to
722.356, the director shall direct the indemnity to be released. In making a
determination under this section, the director may require an independent
appraisal of the investment or the loan security.
(4) In addition to subsections (2) and (3)
of this section, whenever the director determines that an association has made
an investment or loan that is unsafe or unsound, or is not authorized by ORS
722.302 to 722.356, the director may order the association to do one or both of
the following:
(a) Dispose of the investment or loan; or
(b) Establish a specific reserve not to
exceed the book value of the investment or the unpaid balance of the loan and
to maintain such reserve until the investment is disposed of or the loan is
paid. [1975 c.582 §108]
722.360 [Amended by 1961 c.398 §25; repealed by 1975
c.582 §152]
722.365 [Amended by 1959 c.227 §20; 1961 c.398 §26;
repealed by 1975 c.582 §152]
722.370 [Amended by 1959 c.227 §21; 1961 c.398 §27;
1963 c.288 §8; repealed by 1975 c.582 §152]
722.375 [Amended by 1953 c.401 §11; 1961 c.398 §28;
1969 c.193 §3; repealed by 1975 c.582 §152]
722.380 [Amended by 1969 c.193 §4; repealed by 1975
c.582 §152]
722.385 [Repealed by 1969 c.591 §305]
722.402 [1975 c.582 §109; repealed by 1985 c.762 §196]
722.404 [1975 c.582 §110; repealed by 1985 c.762 §196]
722.405 [Amended by 1969 c.138 §5; repealed by 1975
c.582 §152]
722.406 [1975 c.582 §111; repealed by 1985 c.762 §196]
722.407 [1969 c.138 §2; repealed by 1971 c.757 §18]
SUPERVISION AND
ENFORCEMENT
(Supervision)
722.408
Rules. (1) In accordance
with ORS chapter 183, the Director of the Department of Consumer and Business
Services may adopt rules for the purpose of carrying out this chapter.
(2) In addition to the notice requirements
of ORS chapter 183, before the director adopts a rule, the director shall
submit a copy of the rule to each savings association. [1975 c.582 §112; 1985
c.762 §63]
722.410 [Amended by 1959 c.227 §22; 1961 c.398 §29;
1963 c.288 §9; 1969 c.138 §6; 1973 c.368 §6; repealed by 1975 c.582 §152]
722.412 [1975 c.582 §113; repealed by 1985 c.762 §196]
722.414 [1975 c.582 §114; 1981 c.472 §20; repealed
by 1985 c.786 §70]
722.415 [Amended by 1959 c.227 §23; 1961 c.398 §30;
1975 c.582 §100; renumbered 722.328]
722.416
Publication of statutes, rules and opinions. The Director of the Department of Consumer and Business Services shall
publish or revise at least once every two years, for distribution to savings
associations and such other persons as may be interested, this chapter and
related statutes, together with rules adopted by the director and decisions,
opinions and rulings made regarding any rule or section. The director may fix
and collect a reasonable charge, not to exceed the cost of publication, for copies
of such publications. [1975 c.582 §115; 1985 c.762 §67]
722.419
Public inspection of records of department pertaining to this chapter;
exemptions. (1) Except as
provided in subsections (2) and (3) of this section, the records of the
Department of Consumer and Business Services pertaining to the administration
of this chapter are available for public inspection unless the Director of the
Department of Consumer and Business Services determines in the particular
instance that the public interest in disclosure of the records is outweighed by
the interests of an association or its directors, officers, employees, members
and customers in keeping the records confidential, or that the records are
exempt from disclosure under ORS 192.501 to 192.505. A determination by the
director under this subsection is subject to review under ORS 192.410 to
192.505.
(2) Except as provided in subsections (6)
and (7) of this section, the following records of the department pertaining to
the administration of this chapter are exempt from disclosure or production and
shall be treated as confidential as provided in ORS 705.137:
(a) Examination reports and work papers,
directives, orders and correspondence that relate to examination reports.
(b) Investigatory information concerning
persons subject to investigation by the director under ORS 722.024, 722.026,
722.036, 722.134, 722.459 or 722.506, and financial statements of such persons.
(c) Proprietary information.
(d) Audits submitted to the director under
ORS 722.434 (3).
(e) Reports submitted to the director
under ORS 722.458.
(f) Stockholder lists.
(g) The name of a depositor or debtor
described in subsection (3) of this section and the amount of the person’s
deposit or debt.
(3) The director or any other person
employed by the department and acting under this chapter shall not knowingly
disclose the name of any person who is a depositor or debtor of an association,
or the amount of the person’s deposit or debt, except that the director or the
employee may disclose such information as may be necessary in the performance
of the director’s or employee’s official duty including any duty under ORS
295.018.
(4) Statements of financial condition
filed under ORS 722.434 (1) are not confidential.
(5) A civil penalty imposed by the
director shall become subject to public inspection after the 20th day after the
director imposes the civil penalty.
(6) Notwithstanding subsection (2) of this
section, the director may disclose any record of the section specified in this
subsection pertaining to an association that has been liquidated if the
director determines in the particular instance that the public interest in
disclosure of the record outweighs the interests of the association or its
directors, stockholders, officers, employees or customers in keeping the record
confidential. Under no circumstances, however, shall the director disclose any
such record or portion thereof that contains any proprietary information or any
information relating to the individual financial activities or affairs of
persons unless the director concludes that those activities or affairs were a
direct and substantial contributing factor in the failure of the association.
This subsection applies to the following records of the section:
(a) Examination reports and work papers,
directives, orders and correspondence relating to examination reports;
(b) Investigatory information concerning
persons subject to investigation by the director under ORS 722.024, 722.026,
722.036, 722.134, 722.459 or 722.506;
(c) Audits submitted to the director under
ORS 722.434 (3); and
(d) Reports filed under ORS 722.458.
(7) Notwithstanding ORS 40.270, an officer
of the department may be examined concerning records that are exempt from
disclosure under subsection (1), (2) or (3) of this section and the records are
subject to production if the court before which a civil or criminal action is
pending finds that such examination and production is essential for
establishing a claim or defense. In making a finding under this subsection, if
the court views the records, the court shall do so in camera.
(8) In addition to the authority granted
the director in ORS 705.137, all records of the department pertaining to the
condition of associations may be furnished to:
(a) Representatives of savings and loan
departments of other states.
(b) Representatives of the Federal Housing
Finance Board,
(c) The State Treasurer if the association
is a depository of public fund deposits.
(9) If the director is requested to
disclose any record subject to this section and the record contains both
material that is exempt from disclosure under this section or any other
provision of law and material that is not exempt from disclosure, the director
shall separate the exempt and nonexempt material and shall disclose only the
nonexempt material. [1985 c.786 §60; 1985 c.762 §66a; 1987 c.373 §58; 1999
c.107 §7; 2001 c.377 §24]
722.420 [Amended by 1961 c.398 §31; repealed by 1975
c.582 §152]
722.422 [1963 c.288 §10; 1975 c.582 §106; renumbered
722.352]
722.424 [1967 c.257 §2; 1975 c.582 §104; renumbered
722.338]
722.425 [Amended by 1957 c.225 §1; 1959 c.227 §24;
1961 c.398 §32; repealed by 1975 c.582 §152]
722.430 [Amended by 1959 c.227 §25; repealed by 1975
c.582 §152]
722.432
Communications from director; notices generally. (1) Every approval or rejection by the
Director of the Department of Consumer and Business Services given pursuant to
this chapter and every communication having the effect of an order or
instruction to any association shall be:
(a) In writing, signed by the director;
(b) Mailed to the affected association,
addressed to the president at the principal office of the association; and
(c) Presented to the board of directors of
such association at its next regular meeting or at a special meeting called for
such purpose and noted in the minutes of the meeting.
(2) All notices required by this chapter
shall be in writing. All notices issued or required to be issued by the
director shall be sent by mail and shall become effective upon deposit of the
notice in the mail. [1975 c.582 §116]
722.434
Financial statements and audits. (1) Every savings association shall, on January 1 of each year, or
within 30 days thereafter, file with the Director of the Department of Consumer
and Business Services a full detailed statement of its financial condition on
the last day of the preceding month and of the business transacted during the
preceding year. The statement shall be verified and shall set forth the amount
and the character of its assets and liabilities and shall contain such other
information and be in such form as the director may prescribe.
(2) The director may require additional
statements from any or all associations, as of the close of business at any
date. The director shall allow not less than 10 days in which to prepare and
file a report under this subsection.
(3) Every savings association shall once
each year cause an audit to be made of its financial condition by an
independent auditor. A copy in full of the audit required by this subsection,
and of any other audit made by an association, with findings of the auditor and
all statements, comments and recommendations made by the auditor on the audit,
shall be filed with the director forthwith but not later than 120 days after
the last day of the period audited. The director shall review all audits and
reports and may approve or reject any report, in whole or in part. [Formerly
722.165]
722.435 [Amended by 1961 c.398 §33; repealed by 1975
c.582 §152]
722.436
Examinations by director; report; examination program with federal regulators;
acceptance of federal or other state examinations. (1) Except as provided under subsections (4)
and (5) of this section, every two years, or more often if the Director of the
Department of Consumer and Business Services considers it advisable, the
director, either in person or through an examiner, shall make an examination of
the books, records and affairs of every domestic and foreign association.
(2) The examiner shall prepare a report of
the examiner’s findings and file it with the director. The examiner shall
include in the report any violation of law or any unauthorized or unsafe
practices of the association disclosed by the examination.
(3) The director shall furnish a copy of
the report to the association examined and, upon request, may furnish a copy of
or excerpts from the report to the Federal Housing Finance Board, Federal Home
Loan Bank or other federal or state agency authorized to loan to or otherwise
act as an insuring agency for savings and loan associations. When the director
furnishes a copy of a report of an association to an agency under this
subsection, the director shall immediately inform the association of the agency
making the request and the part of the report furnished.
(4) The director may participate in any
program offered by the Federal Housing Finance Board, a Federal Home Loan Bank
or the Federal Deposit Insurance Corporation that provides for joint alternate
examinations of savings associations by the director and the Federal Housing
Finance Board, a Federal Home Loan Bank or the Federal Deposit Insurance
Corporation.
(5) Instead of performing an examination
under subsection (1) of this section, the director may accept an examination or
report made by the Federal Housing Finance Board or a Federal Home Loan Bank or
by the regulator of savings associations in another state. [1975 c.582 §118;
1981 c.472 §21; 1985 c.762 §68; 1985 c.786 §61; 1987 c.373 §58a; 1991 c.67 §192;
1999 c.107 §8]
722.438
Extended audit, examination or revaluation; payment of costs. (1) If in the opinion of the Director of the
Department of Consumer and Business Services the examination conducted under
ORS 722.436 fails to disclose the true financial condition of an association,
the director may in order to ascertain its true financial condition:
(a) Make an extended audit or examination
of the association or cause such an audit or examination to be made by an
independent auditor.
(b) Make an extended revaluation of any of
the assets or liabilities of the association or cause an independent appraiser
to make such a revaluation.
(2) The director shall collect from the
association a reasonable sum for actual and necessary expenses of such an
audit, examination or revaluation. [1975 c.582 §119]
722.440 [Repealed by 1975 c.582 §152]
722.442
Right of access to books and records of association; authority to issue
subpoenas, administer oaths and examine witnesses. (1) Except as provided by ORS 40.225 to
40.295, the Director of the Department of Consumer and Business Services and
any of the examiners, auditors and appraisers of the Department of Consumer and
Business Services:
(a) Shall have free access to all books
and records of an association, its subsidiaries and affiliates, that relate to
its business, and the books and records kept by any officer, agent or employee,
relating to or upon which any record of its business is kept;
(b) May subpoena witnesses and administer
oaths or affirmations in the examination of any director, officer, agent or
employee of an association, its subsidiaries or affiliates or of any other
person in relation to its affairs, transactions and conditions; and
(c) May require the production of records,
books, papers, contracts and other documents.
(2) Each witness who appears before the
director under a subpoena shall receive the fees and mileage provided for
witnesses in ORS 44.415 (2).
(3) If a person fails to comply with a
subpoena so issued or a party or witness refuses to testify on any matters, the
judge of the circuit court for any county, on the application of the director,
shall compel obedience by proceedings for contempt as in the case of
disobedience of the requirements of a subpoena issued from such court or a
refusal to testify in such court. [1975 c.582 §120; 1981 c.892 §97; 1985 c.762 §69;
1989 c.980 §20]
722.444
Appraisal of association property by director. (1) The Director of the Department of
Consumer and Business Services may cause property owned by an association or
securing the loans of an association to be appraised when, in connection with
an examination or otherwise, information with respect to any property or
policies, practices, operating results and trends of an association give
evidence that:
(a) Any appraisal or valuation of the
association may be excessive or overstated; or
(b) Appraisal policies and practices may
not conform with generally accepted professional standards.
(2) In lieu of causing such appraisals to
be made, the director may accept an appraisal caused to be made by a Federal
Home Loan Bank, the Federal Housing Finance Board or by the Federal Deposit
Insurance Corporation or other insuring agency of an insured association.
(3) Unless otherwise ordered by the
director, appraisal of property pursuant to this section shall be made by an
appraiser selected by the director. The cost of such appraisal shall be paid
promptly by the association directly to the appraiser upon receipt by the
association of a statement of the cost approved by the director. The director
shall furnish a copy of the report of an appraisal made pursuant to this
section to the association forthwith but no later than 60 days following the
completion of the appraisal and may furnish a copy to the insuring agency. [1975
c.582 §121; 1999 c.107 §9]
722.445 [Amended by 1959 c.227 §26; 1963 c.288 §11;
1969 c.138 §7; 1971 c.757 §20; repealed by 1975 c.582 §152]
722.446
Authority to establish branch facility; approval of director required to change
location of branch or principal office; applicability of ORS 722.448 and
722.452. (1) The board of
directors of a savings association may, with the approval of the Director of
the Department of Consumer and Business Services, establish a branch facility.
An association shall not change the location of a branch facility or the
principal office of the association without prior notice to and approval of the
director.
(2) Except for the filing fee required
under ORS 722.448, ORS 722.448 and 722.452 shall not apply to a change of
location of an existing branch facility or principal office when the distance
involved is less than one mile, nor shall ORS 722.448 and 722.452 apply to the
establishment of a drive-in facility or an automatic teller machine within 500
feet of an existing branch facility or principal office as an adjunct to the
branch facility or principal office. [1975 c.582 §122; 1981 c.472 §22]
722.448
Application for approval to establish branch or change location of branch;
notice and hearing. (1) When
a savings association wants to establish a new branch facility, or change the
location of a branch facility or its principal office, it shall submit to the
Director of the Department of Consumer and Business Services an application for
approval of the branch or the change. An application shall state the community
where the branch or principal office is to be located or relocated and such
other information as the director requires to determine if the establishment or
change of the branch facility or principal office will serve the public
convenience and advantage.
(2) Upon receipt of an application with
the proper filing fee the director shall promptly examine and investigate
whether the application should be granted. The director shall proceed in
accordance with ORS 722.024 (1) to (4) to give notice and to conduct a hearing,
if requested. [1975 c.582 §123]
722.450 [Amended by 1959 c.227 §27; 1969 c.138 §8;
1973 c.368 §7; repealed by 1975 c.582 §152]
722.452
Approval of branch application; right to hearing if approval denied; list of
branch facilities. (1) The
Director of the Department of Consumer and Business Services shall approve an
application filed under ORS 722.448 if:
(a) The population in the community where
the branch facility or principal office is to be located, relocated or operated
affords a reasonable promise of adequate support for the branch facility or
principal office;
(b) The financial structure and earnings
of the association are adequate to support the expense of establishing the
branch or relocating the branch or principal office; and
(c) The establishment and operation of the
branch facility or relocation of the branch or principal office will serve the
public convenience and advantage.
(2) If an application is denied, the order
shall contain a statement of the reason for the denial and notify the applicant
of its right to a contested case hearing under ORS chapter 183.
(3) If an association does not commence
operation of a branch facility or change the location of a branch facility or
the principal office within a reasonable time after the date of the order
approving the application, the approval shall be revoked by the director.
(4) The director shall maintain a record
of the number and location of all branch facilities of associations. [1975
c.582 §124; 1985 c.762 §70]
722.454
Discontinuance of branch; revocation of approval by director. (1) The board of directors of an
association, after notice to the Director of the Department of Consumer and
Business Services, may discontinue the operation of a branch facility. The
association shall keep the director informed in the matter and deliver to the
director a certificate of the date operation of the branch facility is
discontinued.
(2) The director may for good cause revoke
approval of the operation of a branch facility by written notice to the
association. The notice shall fix a reasonable time after which the association
shall cease to operate the branch facility. [1975 c.582 §125]
722.455 [Amended by 1959 c.227 §28; 1969 c.138 §9;
repealed by 1975 c.582 §152]
722.456
Director to be notified of certain illegal acts. The Director of the Department of Consumer
and Business Services shall be notified promptly, and in writing, stating the
facts whenever it is established that fraud, embezzlement, or misappropriation
of funds or other illegal acts exists, or apparently exists and is being
investigated by the association due to dishonesty of a director, officer,
attorney, agent or employee and the sums involved exceed or could exceed $500. [1979
c.863 §15]
722.457
Giving false document, statement or report prohibited. A person may not knowingly give or cause to
be given to the Department of Consumer and Business Services any document or
any oral or written statement or report that is false in any material respect,
in the course of any investigation, examination or audit by the department. [1987
c.215 §2]
722.458
Records of extensions of credit by domestic associations; rules. (1) As required by rule of the Director of
the Department of Consumer and Business Services, each domestic association
shall file with the director each calendar quarter a report of outstanding
extensions of credit by the domestic association to the following persons as of
the last day of the immediately preceding calendar quarter:
(a) The managing officer and each director
of the domestic association and, if the association is a stock association,
each principal shareholder of the association.
(b) Each related interest of each person
described in paragraph (a) of this subsection.
(2) The report shall show for each
borrower the borrower’s position or class, the original amount of each
outstanding extension of credit, the balance due on each outstanding extension
of credit and whether any payment or portion of the balance is currently past
due.
(3) For purposes of this section:
(a) A principal shareholder of a stock
association or of a business entity described in paragraph (b)(A) of this
subsection is any person who, directly or indirectly or acting through or in
concert with one or more persons, owns, controls or has the power to vote more
than 25 percent of any class of voting stock of the association or business
entity. For purposes of this paragraph, a “business entity” includes but is not
limited to a corporation, partnership, trust, sole proprietorship, association
or labor union.
(b) A related interest of a person
described in subsection (1) of this section includes either of the following:
(A) Any business entity described in
paragraph (a) of this subsection in which the person is a director, partner,
principal shareholder, officer, sole owner or trustee.
(B) A borrower whose extension of credit
is cosigned or indorsed by a director, managing officer or principal
shareholder of a domestic association.
(c) An extension of credit is a making of
a loan, a granting of a line of credit or any other manner of credit extended
to a person.
(4) The director shall adopt rules
governing the submission of reports under subsection (1) of this section. The
director may require any other information in the reports that the director
decides is necessary. The director may exclude from the reporting requirement:
(a) Any advance payment against accrued
salary or other accrued compensation, or an advance for the payment of expenses
incurred or to be incurred on behalf of the domestic association.
(b) Indebtedness, to a maximum set by the
director, that arises by reason of any general arrangement by which a domestic
association acquires charge or time credit accounts, or makes payments to or on
behalf of participants in a credit card plan, check credit plan,
interest-bearing overdraft credit plan or any similar open-end credit plan.
(c) Any other indebtedness that the
director declares by rule not to be subject to the reporting requirements under
subsection (1) of this section. The director may exclude any indebtedness under
this paragraph the reporting of which, according to the director, is not
necessary for proper supervision of savings associations or creates an
excessive burden without an offsetting regulatory benefit.
(5) The director may require a domestic
association to file additional reports under this section more often than
quarterly, as the director determines is necessary. [1985 c.786 §58]
722.459
Investigation of new director, president and managing officer; fingerprinting;
disapproval of election or appointment. (1) After a certificate of authority to commence business has been
issued to a savings association, before a person first takes office as
director, president or managing officer, the name of the person shall be
submitted to the Director of the Department of Consumer and Business Services,
with any information about the person that the director may require.
(2) The director shall investigate each
person whose name is submitted under this section to determine the character, honesty,
financial responsibility and competence of the person. In the course of
investigating any person under this section, the director may require the
person to provide additional information for the director’s further inquiry.
For the purpose of such further inquiry, the director may require the person to
submit to fingerprinting. Fingerprints acquired under this subsection may be
submitted to appropriate law enforcement agencies, including the Federal Bureau
of Investigation, for the purpose of discovering any unlawful activities of the
person.
(3) The director may disapprove the
election or appointment of the person if the director determines that the
person’s character, honesty, financial responsibility, experience or fitness
does not command confidence or warrant the belief that the person will honestly
and efficiently conduct the business of the savings association. The director
shall issue the disapproval in writing to the board of directors that submitted
the person’s name. A copy of the disapproval shall be served personally or by
certified mail upon the disapproved person. The disapproval may be issued
without a prior administrative hearing. A disapproval under this section must
be made within 30 days after the name is submitted to the director. Thereafter,
disapproval may be made only as provided in ORS 722.468.
(4) A person whom the director disapproves
under this section may appeal the disapproval as a contested case pursuant to
ORS 183.415 to 183.500. [1985 c.786 §57]
722.460 [Amended by 1959 c.227 §29; repealed by 1969
c.138 §16]
(Enforcement)
722.462
Enforcement generally; authority to require specific reserves. (1) The Director of the Department of
Consumer and Business Services may institute such actions or other lawful
proceedings as the director may consider necessary for the enforcement of this
chapter or any rule, order or action adopted, issued or taken by the director
pursuant to law.
(2) If the director, from any information
available to the director, finds that an association has either overstated its
assets or understated its liabilities, the director may order the association
to establish specific reserves equal in amount to the overstatement of true
assets or the understatement of true liabilities. Such specific reserves shall
be carried as liabilities. [1975 c.582 §126]
722.464
Cease and desist orders. (1)
On any of the following grounds, the Director of the Department of Consumer and
Business Services may issue and serve upon an association or a director,
officer, employee or agent of an association an order to cease and desist from
an unsafe or unsound practice or a violation if:
(a) The director has reasonable cause to
believe that the person to whom the order is directed is engaging, has engaged
or is about to engage in an unsafe or unsound practice in conducting the
business of the association.
(b) The director has reasonable cause to
believe that the person to whom the order is directed is violating, has
violated or is about to violate a law or rule, an order of the director or any
provision of the articles of incorporation or bylaws of the association.
(2) An order under subsection (1) of this
section shall include the following:
(a) A statement of the facts constituting
the alleged unsafe or unsound practice or violation.
(b) A provision requiring the person named
in the order to cease and desist from the practice or violation. The provision
may be mandatory or otherwise.
(c) The effective date of the order.
(d) A notice to the person named in the
order of the right to a contested case hearing under ORS chapter 183.
(3) When the unsafe or unsound practice or
the violation specified in the order, or the continuation of the practice or
violation, is likely to prejudice the interest of the account holders or stockholders
of an association, the director may issue an order effective immediately or at
a later date. In all other cases, the order shall be effective 30 days after
the date of the order unless the person named in the order requests a hearing
thereon.
(4) An order remains in effect until it is
withdrawn by the director after a hearing or by a court order. [1975 c.582 §127;
1985 c.762 §71; 1987 c.215 §3; 1987 c.373 §59]
722.465 [Amended by 1959 c.227 §30; 1969 c.138 §10;
repealed by 1975 c.582 §152]
722.466 [1975 c.582 §128; 1983 c.696 §28; 1985 c.762
§72a; 1985 c.786 §63; 1987 c.373 §60; 1991 c.734 §96; renumbered 722.991 in
2001]
722.468
Removal of association officer or employee. (1) The Director of the Department of Consumer and Business Services
shall immediately inform the board of directors of an association and may order
the suspension or discharge of an officer or employee of the savings
association, if the director finds that the officer or employee has:
(a) Directly or indirectly willfully misrepresented
the association, its types of service, its contracts or membership to
prospective members, stockholders, depositors or borrowers;
(b) Engaged in dishonest practices in the
conduct of the association’s business; or
(c) Been convicted of a misdemeanor, an
essential element of which is fraud, or of a felony.
(2) The board of directors of the
association, as well as any officer or employee addressed in an order issued
under this section, may request a contested case hearing pursuant to ORS chapter
183.
(3) An officer who is suspended or removed
under this section shall not act in any official capacity, conduct any of the
business of the association or have access to the books, records or assets of
the association either as an officer, director or stockholder, without
receiving permission from the director. [Formerly 722.225; 1977 c.166 §4; 1985
c.762 §73]
722.470 [Amended by 1959 c.227 §31; repealed by 1975
c.582 §152]
722.472 [1975 c.582 §130; repealed by 1985 c.762 §196]
(Conservatorship)
722.474
Appointment of conservator; duties; compensation. (1) The Director of the Department of
Consumer and Business Services may appoint a conservator for an association if
the director, as a result of any examination or from any report made to the director,
reasonably believes that the public interest will be served by the appointment
of a conservator and if the director finds that the association:
(a) Is in an impaired condition;
(b) Is engaging in practices that threaten
to result in an impaired condition;
(c) Is in violation of an order of the
director issued under this chapter and the order has become final by operation
of law or on appeal; or
(d) Is in violation of an injunction
issued under this chapter.
(2) The conservator may be the director,
an examiner or any other person. Upon the appointment of a conservator, the
director shall apply immediately to the circuit court for the county in which
one or more offices of the association is located for confirmation of the
appointment and proceedings in accordance with this section. The court shall
confirm the appointment if it finds that one or more grounds exist for the
appointment. In conservatorship proceedings the circuit courts have full power
to conserve the assets and business of the association or to liquidate and
dissolve the association.
(3) If the association is an institution
insured by a federal agency, the agency or an appointee of the agency may be
tendered appointment as conservator or co-conservator. If the agency or
appointee accepts the appointment, it may, nevertheless, make loans on the
security of, or purchase at public or private sale, any part or all of the
assets of the association of which it is conservator or co-conservator, if such
loan or purchase is approved by the court.
(4) A conservator shall endeavor promptly
to remedy the situations complained of by the director in the application for
confirmation of such appointment. Within six months after the date of the
appointment, or within a reasonable time thereafter if the court extends the
six months’ period:
(a) The conservator shall return the
association to the board of directors thereof and thereafter it shall be
managed and operated as if no conservator had been appointed; or
(b) The conservator shall proceed to liquidate
and dissolve the association.
(5) If the director or an examiner is
appointed conservator, the director or examiner shall receive no additional
compensation. However, if another person is appointed, then the compensation of
the conservator, as determined by the court, shall be paid by the association.
(6) For purposes of this section, “impaired
condition” means a condition in which the assets of a savings association in
the aggregate do not have a fair value equal to the aggregate amount of liabilities
of the association to its creditors plus an amount equal to the minimum general
reserve required under ORS 722.142. Liabilities to creditors include savings
liabilities, capital notes and debentures and liabilities to all other persons.
[1975 c.582 §131; 1985 c.762 §74]
722.475 [Repealed by 1975 c.582 §152]
722.476
Powers of conservator. (1) A
conservator may take immediate possession and control of the property and
affairs of an association and act to protect the interest of the members,
account holders and other creditors and stockholders. A conservator has all the
rights, powers and privileges of the officers, the board of directors and the
members of the association, including the power to liquidate and dissolve the
association. A conservator has the power and authority provided by this chapter
and such other power and authority as may be expressed in the order of the
court.
(2) The directors and officers shall
remain in office and the employees shall remain in their respective positions,
but the conservator may remove any officer or employee, if the order of removal
of an officer is approved in writing by the Director of the Department of
Consumer and Business Services.
(3) While an association is in the charge
of a conservator, the association shall continue to take payments in accordance
with the terms and conditions of contracts. The conservator, in the discretion
of the conservator, may permit account holders to withdraw their accounts from
the association pursuant to the provisions of this chapter or under and subject
to such rules as the director may prescribe. A conservator may accept savings
accounts and additions to savings accounts, but any such amounts received by
the conservator shall be segregated if the director so orders in writing. If so
ordered, such amounts shall not be subject to offset and shall not be used to
liquidate any indebtedness of the association existing at the time the
conservator was appointed for it or any subsequent indebtedness incurred for
the purposes of liquidating any such indebtedness. All expenses of the
association during a conservatorship shall be paid by the association. [1975
c.582 §132]
722.478
Acquiring possession of contents of safety deposit vaults, safes and boxes. (1) The Director of the Department of
Consumer and Business Services may, after the director has taken possession of
the property and business of a domestic or foreign savings association under
ORS 722.474 to 722.484, apply to the circuit court of the county in which the
conservatorship proceedings are pending, for an order directing the director to
cause any safe, safety vault or safety deposit box held anywhere by such
association to be thereafter opened and the contents listed. A safe, vault or
box shall be opened in the presence of:
(a) The director or an examiner;
(b) A notary public not an officer of or
in the employ of such association or of the savings and loan office; and
(c) An officer of the association, if
available.
(2) One signed copy of the list of the
contents of the safe, vault or box shall be delivered to the director; a second
signed copy shall be retained by the notary public; and a third signed copy
shall be delivered to the officer of the association.
(3) The contents shall be enclosed in a
container distinctly marked by the notary public and delivered to the director.
The container shall be kept by the director in the custody of the director and
control for use in the administration of the affairs of the savings
association, as provided by law. The contents shall be held subject to the
payment of any rent that may be unpaid for the use of such safe, vault or box,
also any expenses incurred in opening thereof, and also reasonable compensation
for the safekeeping of the contents after their removal from the safe, vault or
box. [Formerly 722.785]
722.480 [Amended by 1961 c.398 §34; 1971 c.757 §14;
repealed by 1975 c.582 §152]
722.482
Contest of conservatorship appointment by association officers. A director or officer of an association in
office at the time of the initiation of a proceeding under ORS 722.474 may
contest the proceeding and shall be reimbursed for reasonable expenses and
attorney fees by the association or from its assets. A court having such a
proceeding before it shall allow and order paid reasonable expenses and
attorney fees for such directors and officers. [1975 c.582 §134]
722.484
Correction of alleged wrongdoings by unimpaired association. A conservator shall not be appointed, or
private property seized under this chapter, when any association is not in an
impaired condition as defined in ORS 722.474 if the alleged wrongdoing can be
otherwise corrected as provided by this chapter or by other law. [1975 c.582 §135;
1985 c.762 §75]
722.485 [Repealed by 1975 c.582 §152]
722.490 [Amended by 1971 c.757 §15; repealed by 1975
c.582 §152]
722.495 [Amended by 1967 c.335 §59; repealed by 1975
c.582 §152]
722.497 [1971 c.757 §17; 1975 c.582 §93; renumbered
722.306]
722.498 [1973 c.288 §5 (enacted in lieu of 722.499);
repealed by 1975 c.582 §152]
722.499 [1971 c.104 §2; repealed by 1973 c.288 §4
(722.498 enacted in lieu of 722.499)]
FOREIGN
ASSOCIATIONS
722.502
Certificate of authority required to transact business in
722.504
Application for certificate of authority; payment of filing fee. A foreign association may apply to the
Director of the Department of Consumer and Business Services for a certificate
of authority to transact business in this state. With such application it also
shall pay the proper filing fee and file:
(1) A copy of its articles of
incorporation and bylaws certified as a true copy by the public officer or
association officer having custody of the original articles or bylaws;
(2) Evidence satisfactory to the director
that its savings accounts are insured by the Federal Deposit Insurance
Corporation or other insurer as required by ORS 722.048;
(3) A designation of the community in
which the principal office within this state shall be located; and
(4) Other information the director may
require. [1975 c.582 §137; 1981 c.472 §24; 1999 c.107 §16]
722.505 [Repealed by 1975 c.582 §152]
722.506
Issuance of certificate to foreign association. (1) The Director of the Department of
Consumer and Business Services shall issue a certificate of authority to the
association to conduct savings and loan business in this state when:
(a) A foreign association has complied
with ORS 722.504;
(b) The director has examined and
investigated according to the procedures set forth in ORS 722.024 (1) to (4),
whether the application of the association should be granted; and
(c) The director has verified the
financial status of the association by examination of its assets and its
records for the purpose of ascertaining whether they meet the requirements of
this chapter.
(2) Notwithstanding subsection (1) of this
section, the director shall not issue the certificate under subsection (1) of
this section unless:
(a) The director is satisfied that the
association is in sound financial condition, and that it is conducting its
business, and will conduct its business in this state in a manner consistent
with the laws of this state;
(b) The director regards the association
as safe, reliable and entitled to public confidence;
(c) The association pays the proper annual
fee; and
(d) The director finds that the appropriate
standards for approval of the application set forth in ORS 722.026 are
satisfied.
(3) The certificate of authority continues
in effect unless revoked as authorized by ORS 722.516. [Formerly 722.835; 1981
c.472 §25]
722.508
Law applicable to contracts.
Any contract made by a foreign savings association with any person who is
residing in or a foreign corporation authorized to do business in this state,
shall be considered an
722.510 [Amended by 1961 c.398 §35; repealed by 1965
c.226 §7]
722.512
Applicability of Business Corporation Act. Except as otherwise provided by ORS 722.502 to 722.516, a foreign
association shall comply with the provisions of ORS 57.655 to 57.745 (1985
Replacement Part) governing the admission of foreign corporations to transact
business in this state. [1975 c.582 §140; 1987 c.197 §22]
722.514
Prohibition against operation of certain foreign associations; exception;
prohibition against savings and loan business by entity based in foreign
country. (1) Except as
provided in subsection (2) of this section, when the laws, regulations or
administrative actions of any other state or any territory of the United States
prohibit or unfairly impede an Oregon savings association from transacting
business in the state or territory, then the savings associations of the other
state or territory are prohibited from transacting business in this state,
including but not limited to the establishment of new branch facilities.
(2) Subsection (1) of this section shall
not govern the transaction of a savings and loan business in this state by an
association of another state or territory if ORS 722.072 authorizes the
transaction.
(3) Associations or comparable corporation
or business entities headquartered in a foreign country are prohibited from
transacting a savings and loan business in this state. [1975 c.582 §141; 1981
c.472 §26; 1985 c.798 §5]
722.515 [Amended by 1961 c.398 §36; repealed by 1965
c.226 §7]
722.516
Revocation of certificate of authority. In the manner specified for issuance of an order under ORS 722.464,
the Director of the Department of Consumer and Business Services may revoke a
certificate of authority of a foreign association if:
(1) The association fails to conduct its
business in this state in a manner consistent with the laws of this state;
(2) The affairs of the association are in
an unsafe condition;
(3) The association refuses to permit
examination of the financial condition of the association by the director; or
(4) The association fails to pay the
proper annual fee. [1975 c.582 §142; 1987 c.215 §5]
722.520 [Amended by 1961 c.398 §37; repealed by 1965
c.226 §7]
722.525 [Amended by 1961 c.398 §38; repealed by 1965
c.226 §7]
722.530 [Amended by 1961 c.398 §39; repealed by 1965
c.226 §7]
722.535 [Amended by 1961 c.398 §40; 1965 c.226 §6;
repealed by 1975 c.582 §152]
722.540 [Repealed by 1959 c.227 §32]
722.545 [Amended by 1961 c.398 §41; repealed by 1975
c.582 §152]
722.550 [Repealed by 1975 c.582 §152]
722.555 [Amended by 1961 c.398 §42; repealed by 1975
c.582 §152]
722.560 [Amended by 1961 c.398 §43; repealed by 1975
c.582 §152]
722.565 [Amended by 1961 c.398 §44; repealed by 1975
c.582 §152]
722.570 [Repealed by 1975 c.582 §152]
722.575 [Amended by 1961 c.398 §45; repealed by 1975
c.582 §152]
722.580 [Repealed by 1975 c.582 §152]
722.585