CHAPTER 170

An Act to amend and reenact §§ 6-201.13, 6-201.29 and 6-201.32 of the
Code of Virginia, relating, respectively, to dividends paid by savings
and loan associations, investment of assets of such associations, and
purchase, sale of and participation in loans by such associatiins 390)

Approved March 1, 1962

Be it enacted by the General Assembly of Virginia:
1. That §§ 6-201.13, 6-201.29 and 6-201.82 of the Code of Virginia be
amended and reenacted, as follows:

§ 6-201.13. No association shall agree to pay a fixed amount of divi-
dends upon any shares issued by it.
_ Dividends upon all shares issued by it may be declared from time to
time and shall be at the same dividend rate regardless of the class or kind
of shares except that an association may omit dividend payments on share
accounts of * fifty dollars or less and may omit or may make lower dividend
payments on short term savings shares; and except that an association
may pay a bonus on all other shares issued by it at least twelve months
prior to the date of such bonus, if the holder of such shares has made
no withdrawals from his share account during the twelve months prior
to the declaration of the bonus.

_§ 6-201.29. The assets of an association may be invested in the fol-
lowing ways and in such ways only: ;

a. In real estate and in equipment necessary for the conduct of its
business.

b. In obligations of or obligations guaranteed as to principal and
interest by the United States or any agency thereof or of the State of
Virginia or any of its political subdivisions.

c. In stock or obligations of Federal Home Loan Banks; in stock or
obligations of the Federal Savings and Loan Insurance Corporations; in
obligations of the Federal National Mortgage Association through making
nonrefundable contributions; in certificates of deposit, time deposits, sav-
ings accounts, or demand deposits of banks insured by the Federal De-
posit Insurance Corporation; and, to the extent of not more than 15% of
its total assets, in shares of other State Associations or Federal Asso-
clations.

c-1. In the purchase of stock or membership in industrial develop-
ment corporations and in loans to such corporations to the extent provided
by law at any time that the general reserves, surplus and undivided profits
of the association aggregate a sum in excess of five per centum of its
withdrawable accounts.

d. In loans fully secured by shares of the association.

e. In loans secured by first liens on improved real estate. No such
loan shall exceed $35,000 on each home or combination of home and busi-
ness property securing the same. No such loan shall exceed ninety per
cent of the value of the real estate as appraised by a competent appraiser.
Provided that loans insured or guaranteed by a Federal agency may
made on such terms as are acceptable to the insuring or guaranteeing
agency. At least sixty per cent of the assets shall be invested in such loans
unless, because of exceptional conditions in the real estate market, the
Commission permits an association to deviate from this requirement.

Every such loan shall provide that the borrower shall make regular
periodic payments of principal and interest, in equal or unequal amounts,
the first payment being due not later than twelve months from the date
of the first advance in the case of a loan made for the purpose of
financing the construction of a home or a combination home and business
structure and 60 days from the date of the loan in the case of other loans,
until the mortgage indebtedness and the disbursements, if any, made by
the association for the payment of taxes, insurance premiums, and other
items, together with interest thereon, have been fully paid; provided,
however, that no subsequent periodic payment of principal and interest
shall be greater than any previous periodic payment of principal and
interest, and that no such loan shall be for a longer term than 25 years.
Loans insured or guaranteed by a Federal agency may be repayable upon
such terms as are acceptable to such agency. The association may compute,
charge, and collect interest on monthly balances by computing the same
on the preceding monthly balance and adding such interest to that balance
plus advances for taxes, insurance, and other lawful charges accruing
since the preceding balance, less credits for payments made by the

orrower.
f. Up to fifteen per cent of the assets may be invested in secured or
unsecured loans to home owners for maintenance, repair, modernization,
improvement and equipment of their homes. Such loans shall be payable
monthly and shall not be for a term longer than five years and shall not
exceed $3,500.

An association may charge and collect in advance the legal rate of
interest upon the entire amount of such loan.

g. Up to 20% of the assets may be invested in other loans secured
by a first lien on improved real estate or other improved real estate. No
such loan shall be for a term longer than 25 years nor in excess of 75% of
the value of the real estate as appraised by a competent appraiser.

h. Up to 5% of the assets may be invested in other loans secured by
a first lien on unimproved real estate.

§ 6-201.32. (a) State Associations and Federal Associations, as
defined in § 6-201.4 (6) and (7), may purchase from each other or par-
ticipate with each other or with banks insured by the Federal Deposit
Insurance Corporation in loans on * real estate. An association may par-
ticipate in the making of or purchase a participation in a loan on * real
estate made by a savings and loan association that is not authorized to
do business in Virginia, not to exceed 50% of the amount of the loan,
irrespective of where the security for such loan is located, provided that
the aggregate amount of such interest in all such loans shall not exceed
20% of the association’s assets. An association may sell a participation in a
loan made or to be made by it on * real estate to a savings and loan
association that is not authorized to do business in Virginia, provided that
the loan is collected and serviced by the Virginia association. An associa-
tion that is not authorized to do business in Virginia shall not be deemed
to be doing business in Virginia solely because of such participation.

(b) An association may purchase any loan it may legally make.

(c) An association shall not engage in the mortgage brokerage busi-
ness; but an association may sell any loan made by it provided that it is
sold without recourse against the association.