New Jersey § 17:9a-24

§ 17:9a-24.

Every bank and 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 adopt a corporate seal, and to sue and be sued; (2) To issue cashier's checks, treasurer's checks, and money orders; to transmit

funds; to guarantee signatures and endorsements; (3) To borrow money, and to pledge, mortgage or hypothecate its real or personal property

as security therefor, and to execute and deliver all such instruments as may be necessary

to evidence such borrowing, pledge, mortgage, or hypothecation; (4) To keep, maintain, and rent out for hire, at any location occupied by its principal

office or any branch office, safe deposit boxes or other receptacles for the safekeeping

of personal property. In exercising the powers authorized by this paragraph, the bank or savings bank

shall have, but shall not be confined to, the same rights and remedies conferred upon

safe deposit companies; (5) To invest in real property as purchaser of the fee or as lessee, and to hold,

lease and convey such real property, or any interest therein, for the following purposes

and no others: (a) Such as may be necessary or convenient for the use, operation, or housing of its

principal office or any branch office, or an auxiliary office, or for the storage

of records or other personal property, or for office space for use by its officers

or employees, or which may be reasonably necessary for future expansion of its business,

or which is otherwise reasonably incidental to the conduct of its business; and which

may include, in addition to the space required for the transaction of its business,

other space which may be let as a source of income. In exercising the powers conferred by this subparagraph, the bank or savings bank

shall be subject to the limitations imposed by paragraph (13) of this section; (b) Such as may be conveyed to it in whole or part satisfaction of debts previously

contracted in the course of its dealings; (c) Such as it shall purchase at sale under judgments and decrees in its favor, and

on foreclosure of mortgages held by it; (d) Such as it shall purchase or acquire to minimize or prevent the loss or destruction

of any lien or interest therein; and (e) Such as may be permitted for associations pursuant to subsections (4) and (21)

of section 48 of the “Savings and Loan Act (1963),” P.L. 1963, c. 144 ( C. 17:12B-48 ); provided that all real property not held for any purpose specified in subparagraph

(a) of this paragraph, shall be sold within five years of its acquisition, or within

five years after the time it ceases to be held for any purpose specified in subparagraph

(a) of this paragraph, unless the commissioner shall extend the time within which

such sale shall be made; (6) To be a member of the Federal Reserve System; to subscribe for, purchase, hold,

and surrender such amounts of the capital stock of the Federal Reserve Bank organized

within the district in which such bank or savings bank is located as may be required

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

all powers, privileges and options which are conferred by law 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 time of 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; (7) To be a member of the Federal Deposit Insurance Corporation, or of any successor

corporation having for its purpose the insurance of deposits, and to do all things,

and assume and discharge all liabilities and obligations imposed upon such members

by federal legislation or by rules and regulations lawfully promulgated pursuant thereto,

as the same may provide at the inception of such membership, or as the same may thereafter

be amended or supplemented; (8) To be a member of any federal agency hereafter created, membership in which is

open to banking institutions, and the purpose of which is to afford advantages or

safeguards to banking institutions, or to their depositors, and to comply with all

the requirements and conditions imposed upon such members, except that the power by

this paragraph conferred shall not be exercised unless the commissioner, with the

concurrence of the banking advisory board, shall make a general order authorizing

banks or savings banks, or both, to become and be such members, upon such terms and

conditions as may in such order be prescribed; (9) To subscribe for, purchase and hold stock of one or more safe deposit companies

which have been or may be organized to do business on or adjacent to premises occupied

by the principal office or a branch office of the bank or savings bank; provided

that (a) In the case of a savings bank, the amount so invested shall not exceed 5% of its

surplus; and (b) In the case of a bank, the amount so invested shall not exceed 10% of its capital

stock and surplus; and (c) Each purchase of such stock shall first have been authorized by a resolution,

stating the number of shares to be purchased and the amount to be paid therefor, adopted

by its board of directors or board of managers, and, in the case of a bank, approved

by a majority in interest of its stockholders at any annual or special meeting; and (d) Each purchase of such stock by a bank or savings bank shall have been approved

in writing by the commissioner; (10) To subscribe for, purchase and hold stock of not more than one fiduciary institution

organized under any law of this State hereafter enacted; provided that (a) In the case of a savings bank, the amount so invested shall not exceed 10% of

its surplus; and (b) In the case of a bank, the amount so invested shall not exceed 20% of its capital

stock and surplus; and (c) Each purchase of such stock shall first have been authorized by a resolution,

stating the number of shares to be purchased and the amount to be paid therefor, adopted

by its board of directors or board of managers, and, in the case of a bank, approved

by a majority in interest of its stockholders at any annual or special meeting; and (d) Each purchase of such stock by a bank or savings bank shall have been approved

in writing by the commissioner; (11) To contribute to community funds, or to charitable, philanthropic, or benevolent

instrumentalities conducive to public welfare, or civic betterment, or the economic

advantage of the community, and to instrumentalities for the protection or advancement

of the interests of banking institutions, such sums as its board of directors or board

of managers may deem expedient and in the interests of such bank or savings bank; (12) To exercise all incidental powers, not specifically enumerated in this act, which

shall be necessary or convenient to carry on the business of the bank or savings bank; (13) To invest in stock of a subsidiary of such bank or savings bank which holds title

to real property of the kind in which such bank or savings bank could itself invest

pursuant to subparagraph (a) of paragraph (5) of this section, and to make secured

or unsecured loans to such subsidiary, without regard to the limitations imposed by

Article 13; 1 but no bank or savings bank shall, except with the prior approval of the commissioner

(1) invest in real property including all capital leases, pursuant to subparagraph

(a) of paragraph (5) of this section; or (2) invest in the stock or other securities

of such subsidiary; or (3) make a loan to such subsidiary, if the aggregate of all

such investments and loans, when added to any indebtedness otherwise owing by the

subsidiary, will exceed the greater of (1) 50% of the capital funds of the bank or

savings bank, or (2) the amount permitted to national banks for such investments. As used in this paragraph, “subsidiary” of a bank or savings bank means a corporation

all of whose capital stock and other securities having voting rights are owned by

such bank or savings bank, and whose powers are limited by its certificate of incorporation

to the acquiring, holding, managing, selling, leasing, mortgaging, altering, improving

and otherwise dealing in and with real property of the kind in which the bank or savings

bank could itself invest pursuant to subparagraph (a) of paragraph (5) of this section;

and “capital funds” means the aggregate of the capital stock, the principal amount

owing on all capital notes, surplus and undivided profits of a bank, and the aggregate

of the capital deposits, if any, and the surplus of a savings bank. Every subsidiary of a bank or savings bank shall be subject to examination by the

commissioner as provided in the case of banks and savings banks pursuant to sections

260, 261, 262, 263, and 335, 2 and the ultra vires or unlawful act of a subsidiary of a bank or savings bank shall

be deemed to be the ultra vires or unlawful act of such bank or savings bank for the

purposes of Article 42. 3 In determining whether to give or withhold approval of an investment or loan in

excess of the limitation imposed by this paragraph, the commissioner shall consider

whether the making of such loan or investment is consistent with sound banking practice,

having regard to (1) the ratio between the aggregate of such loans and investments

and the capital funds of the bank or savings bank; (2) the benefits to the bank or

savings bank reasonably to be anticipated from such investment or such loan; (3)

the ratio between such aggregate capital funds and total deposits; and (4) such other

factors as the commissioner shall consider germane to the protection of deposits. A violation of any provision of this paragraph by any bank, savings bank, or subsidiary

of a bank or savings bank shall not impair the validity or sufficiency of any deed

of conveyance, mortgage, or lease made by such bank, savings bank, or subsidiary,

of real property owned by it; nor shall any other interest in such real property,

acquired by or vested in any person claiming through or under such bank, savings bank,

or subsidiary, or to which such person may be entitled, be impaired by reason of such

violation; (14) To make or invest in any secondary mortgage loan as defined in section 1 of P.L.

1948, c. 67 ( C. 17:9A-1 ). Secondary mortgage loans shall be repayable in installments under the same terms

and conditions as provided for secondary mortgage loan licensees under the “Secondary

Mortgage Loan Act,” P.L. 1970, c. 205 ( C. 17:11A-34 et seq. ), only with respect to maximum term, maximum loan, amount and maximum annual percentage

rate of interest. The Commissioner of Banking shall have the power, in relation to a “secondary mortgage

loan,” to adopt, amend, alter or rescind regulations, the requirements of which, in

his judgment, are necessary for the implementation of this paragraph ; (15) To purchase, hold and invest in mortgages, obligations or other securities which

are or have been sold by the Federal Home Loan Mortgage Corporation pursuant to section

305 or 306 of the “Federal Home Loan Mortgage Corporation Act,” Pub.L. 91-351 ( 12 U.S.C. § 1454 or 12 U.S.C. § 1455 ), to the same extent that the bank or savings bank may purchase, hold or invest in

obligations issued by or guaranteed as to principal and interest by the United States

or any agency or instrumentality thereof. 1

N.J.S.A. §§ 17:9A-60 to 17:9A-63. 2

N.J.S.A. §§ 17:9A-260 to 17:9A-263 and 17:9A-335. 3

N.J.S.A. §§ 17:9A-266 to 17:9A-304.