New Jersey § 17:9a-26

§ 17:9a-26.

In addition to the powers specified in section 24, 1 every savings bank shall, subject to the provisions of this act, have the following

powers, whether or not such powers are specifically set forth in its certificate of

incorporation: (1) To receive money on deposit, to be repaid, upon such terms, not inconsistent with

this act, as may be agreed upon between the depositor and the savings bank, according

to the usual custom of savings banks; (2) To give security for deposits when required by the law of this State or of the

United States, or by the rules or orders of any court of this State, or of the United

States, or by regulations of any officer or agency of this State or of the United

States made pursuant to such law; provided, that, no savings bank shall be required

to give security for deposits made by this State, or any political subdivision thereof,

or any other body politic existing under the laws of this State, to the extent that

such deposits are insured under any Federal legislation providing for the insurance

of bank deposits; (3) To invest its deposits and its surplus in the manner provided by this act, or

otherwise by law provided; (4) To be a member of the Federal home loan bank organized in the district in which

the savings bank is located, and to subscribe for, purchase, hold, and surrender from

time to time such amounts of the stock of such Federal home loan bank as may be required

or as may be deemed advisable by such savings bank; to have and exercise all powers,

privileges and options which are by law conferred upon such members; to comply with

all requirements of Federal legislation and the rules and regulations lawfully promulgated

thereunder governing such membership as such legislation and such rules and regulations

may provide at the inception of such membership, and as the same may from time to

time thereafter be amended or supplemented; and to assume and discharge all liabilities

and obligations which may be required by reason of such membership; (5) To avail itself of the provisions of any Federal legislation providing for the

extension of any lawful banking activity provided in such legislation and made available

for participation by savings banks; except that the power by this paragraph conferred

shall not be exercised unless the commissioner shall make a general order authorizing

such participation by savings banks upon such terms and conditions as may in such

order be prescribed ; (6) Upon application to and approval by the commissioner, to act as custodian or trustee

within the contemplation of the Federal Self-Employed Individuals Tax Retirement Act

of 1962, 2 as amended and supplemented, and as custodian, trustee or manager of any such investment

fund the authorized investments of which include, but need not be limited to savings

accounts or real estate loans, and the beneficial interests in which may be represented

by transferable shares or certificates. Savings banks exercising the powers authorized by this subsection shall segregate

all funds held in such fiduciary capacities from the general assets of the savings

bank and shall keep a separate set of books and records showing in detail all transactions

made under authority of this subsection. If individual records are kept for each self-employed individual's retirement plan

and each such investment fund, then all such funds held in such fiduciary capacities

by a savings bank may be commingled for appropriate purposes of investment. No funds held in such fiduciary capacities shall be used by a savings bank in the

conduct of its business; however, such funds may be invested in savings accounts

of the savings bank in the event that the custodial, trust or other plan does not

prohibit such investment. In granting or refusing the savings bank's application the commissioner shall take

into consideration the investment policies, amount, type and adequacy of reserves,

fidelity bonds and any legally required deposits of the applicant; and other pertinent

facts and circumstances. Application to and approval by the commissioner for authority to exercise the powers

provided in this subsection shall not be required as to a savings bank authorized

to exercise agency or fiduciary powers as a qualified bank ; and (7) To make commercial loans to the same extent as a bank may make commercial loans,

subject to all limitations imposed upon banks with respect to such liabilities by

Article 13 of P.L.1948, c. 67 ( C. 17:9A-60 et seq. ), except that the aggregate of all commercial loans outstanding may not exceed 10%

of a savings bank's total assets without the commissioner's approval. The commissioner, upon application of a savings bank and approval thereof by the

commissioner, may authorize a savings bank to make and have outstanding commercial

loans in an unlimited amount, or in a limited amount, but in excess of 10% the savings

bank's total assets. The commissioner shall issue regulations providing procedures for filing an application

for the commissioner's approval and defining terms such as “total assets” and “commercial

loans.” The commissioner shall, within 30 days of receipt of a completed application, approve

the application if he finds that the savings bank is being operated in a safe and

sound manner, and: (a) has capital equal to that required from time to time by the

Board of Governors of the Federal Reserve System for a bank chartered under the laws

of a state of the United States which is a member of the Federal Reserve System and

said capital shall be calculated in accordance with generally accepted accounting

principles as applied to banks; (b) is competently managed; and (c) demonstrates

satisfactory experience and sufficient expertise in making commercial loans. This power to make commercial loans shall apply only to savings banks and no other

person or institution shall exercise any power under this subsection by virtue of

any parity law or law authorizing such person or institution to make or invest in

investments authorized by savings banks. 1

N.J.S.A. § 17:9A-405. 2

26 U.S.C.A. §§ 401 to 405.