Chapter 1161: SAVINGS BANKS - ORGANIZATION

1161.01 Savings bank - organization definitions.

(A) In sections of the Revised Code making reference to savings banks and to the division of savings banks or the division of financial institutions:

(1) "Savings bank" means a corporation that has its home office located in this state, that is organized for the purposes of receiving deposits and raising money to be loaned to its members or to others, and that maintains at least sixty per cent of its total assets in the housing-related and other investments set forth in section 7701(a)(19)(C) of the "Internal Revenue Code of 1986," 100 Stat. 2085, 26 U.S.C.A. 1 , as amended. "Savings bank" does not include banks, savings and loan associations, or credit unions.

(2) "Foreign savings bank" means a savings bank organized under the laws of another state, the home office of which is located outside this state.

(3) "Controlling person" means any person or entity which, either directly or indirectly, or acting in concert with one or more other persons or entities, owns, controls, or holds with power to vote, or holds proxies representing, fifteen per cent or more of the voting shares or rights of a savings bank or controls in any manner the election or appointment of a majority of the directors of a savings bank. However, a director of a savings bank is not deemed to be a controlling person of the savings bank based upon the director's voting, or acting in concert with other directors in voting, proxies obtained in connection with a solicitation of proxies or obtained from savings account holders and borrowers if such proxies are voted as directed by a majority of the entire board of directors of the savings bank, or of a committee of the directors if the committee's composition and authority are controlled by a majority vote of the entire board and if its authority is revocable by such a majority.

(4) "Division of savings banks" may be used interchangeably with, and for all purposes has the same meaning as, "division of financial institutions."

(5) "Another state" means any state of the United States other than this state, and includes the District of Columbia and any other territory, insular possession, or political subdivision of the United States.

(6) "Banking office" means an office or other place at which a savings bank receives money or its equivalent from the public for deposit and conducts the general business of a savings bank. "Banking office" does not include any of the following:

(a) Any location at which a savings bank receives, but does not accept, cash or other items for subsequent deposit, such as by mail or armored car service or at a lock box or night depository;

(b) Any structure located within five hundred yards of a banking office and operated as an extension of the services of the banking office;

(c) Any remote service unit or automated teller machine owned, leased, or operated by a savings bank;

(d) Any facility located within the geographical limits of a military installation at which a savings bank only accepts deposits and cashes checks;

(e) Any location at which a savings bank takes and processes applications for loans and from which it may disburse loan proceeds, but does not accept deposits;

(f) Any location at which a savings bank is engaged solely in providing administrative services for its own operations or for other financial institutions.

(7) "Branch" means a banking office that is not also the savings bank's principal office consistent with its articles of incorporation.

(8) "Superintendent" or "superintendent of savings banks" means the superintendent of the division of financial institutions of this state. Whenever the division or superintendent of savings banks is referred to or designated in any statute, rule, contract, or other document, the reference or designation shall be deemed to refer to the division or superintendent of financial institutions, as the case may be.

(9) "Savings and loan association" means a domestic association, a foreign savings association, or a foreign federal association, as defined in section 1151.01 of the Revised Code.

(10) "Bank" has the same meaning as in section 1101.01 of the Revised Code.

(B) For purposes of any chapter of the Revised Code, except Chapters 1101., 1103., 1105., 1107., 1109., 1111., 1113., 1115., 1117., 1119., 1121., 1123., 1125., 1127., 1133., 1151., 1153., 1155., 1157., 1161., 1163., 1165., and 1181. of the Revised Code, "building and loan association," "savings and loan association," or "financial institution" includes a savings bank as defined in section 1161.01 of the Revised Code, unless the context clearly requires otherwise.

Cite as R.C. § 1161.01

Effective Date: 05-21-1997

1161.02 Application of corporation laws.

A savings bank shall be organized, governed, and conducted under the general laws of this state relating to corporations, except as otherwise provided in this chapter and Chapters 1163. and 1165. of the Revised Code. Upon receipt of articles of incorporation, and all papers relating thereto, for a savings bank, the secretary of state shall forthwith transmit to the superintendent of savings banks a copy of such articles and shall not record them until authorized to do so by the superintendent.

No savings bank shall be certified by the superintendent for the commencement of business in this state, nor shall a savings bank transact business in this state, unless its accounts are insured by the federal deposit insurance corporation.

Cite as R.C. § 1161.02

Effective Date: 10-23-1991

1161.03 Certification by superintendent to secretary of state.

Upon receipt from the secretary of state of a copy of the articles of incorporation of a proposed savings bank, the superintendent of savings banks shall immediately examine all the facts connected with the formation of such proposed corporation, including its location and proposed incorporators, and if it appears that such corporation, if formed, will be entitled to commence the business for which it is organized, the superintendent shall so certify to the secretary of state, who shall thereupon record the articles.

The superintendent may refuse to certify to the secretary of state, if upon such examination he has reason to believe that the proposed corporation is to be formed for any business other than legitimate savings bank business, that the character and general fitness of the persons proposed as incorporators in such corporation are not such as to command the confidence of the community in which such corporation is proposed to be located, that the public convenience and advantage will not be promoted by its establishment, that the name of the proposed corporation is likely to mislead the public as to its character or purpose, or that the proposed name is the same as one already appropriated by any existing savings bank, bank, or savings and loan association in this state or so similar thereto as to be likely to mislead the public.

Cite as R.C. § 1161.03

Effective Date: 10-23-1991

1161.04 Recording of articles of incorporation.

Upon receipt of the certificate provided for in section 1161.03 of the Revised Code from the superintendent of savings banks, the secretary of state shall record the savings bank's articles of incorporation and shall thereupon furnish one copy thereof, certified by him, to the incorporators, and one copy to the superintendent to be filed in his office. All certificates thereafter filed in the office of the secretary of state relating to the corporation shall be recorded, and a certified copy thereof shall be forthwith furnished to the superintendent and filed in his office.

Cite as R.C. § 1161.04

Effective Date: 10-23-1991

1161.05 Approval required for establishment or relocation.

(A) No savings bank shall establish more than one banking office, maintain branches, or relocate any branch, except with the prior written approval of the superintendent of financial institutions.

(B) A savings bank may establish a branch at any of the following locations:

(1) Any location in this state;

(2) Any location in another state;

(3) Any location outside the United States.

(C) The superintendent may condition approval of a branch at a location in another state or outside the United States on an agreement satisfactory to the superintendent that provides for the frequency and method of, and the reimbursement of expenses for, examining the branch.

Cite as R.C. § 1161.05

Effective Date: 05-21-1997

1161.06 Advance written notice of use of temporary quarters.

Any savings bank that conducts the business of an office or branch at temporary quarters during construction or alteration of its regular quarters shall give advance written notice to the superintendent of savings banks of the place and estimated time of such arrangement and shall give prompt written notice to the superintendent of the actual time of return to the regular quarters. No savings bank shall continue such arrangement for longer than two years or at a location more than one-half mile from the regular quarters without the prior written approval of the superintendent.

Cite as R.C. § 1161.06

Effective Date: 10-23-1991

1161.07 Branches of foreign savings bank.

(A) Except as otherwise provided in this section and section 1161.76 of the Revised Code, only a savings bank may establish and maintain a branch in this state.

(B)

(1) A foreign savings bank may, upon receiving the approval of the superintendent of financial institutions, establish a branch in this state by creating a new branch or by agreeing to assume all or substantially all of the deposit liabilities of an existing branch of a bank, savings bank, foreign savings bank, or savings and loan association, which branch is located in this state. The superintendent shall not grant approval unless both of the following conditions are met:

(a) The foreign savings bank provides evidence to the superintendent that its accounts are insured by the federal deposit insurance corporation.

(b) The superintendent determines, in the superintendent's discretion, that the laws of the state in which the foreign savings bank has its home office, which laws are in effect at the time the foreign savings bank is seeking approval under this section, permit a savings bank organized under this chapter to establish a new branch or assume all or substantially all of the deposit liabilities of an existing branch of a bank, savings bank, foreign savings bank, or savings and loan association, as the case may be, in that other state on terms that are, on the whole, substantially no more restrictive than those established under this section.

(2) If a foreign savings bank that maintains a branch in this state withdraws from the federal deposit insurance corporation, its authority to maintainan branch in this state is terminated.

(3) A foreign savings bank that seeks to establish additional branches in this state or to relocate branches is subject to divisions (B)(1) and (2) of this section and section 1161.05 of the Revised Code, unless otherwise provided by federal law.

Cite as R.C. § 1161.07

Effective Date: 05-21-1997

1161.071 Providing services to another financial institution's customers.

(A) With the written approval of the superintendent of savings banks, a savings bank may contract with one or more other savings banks, banks, and savings and loan associations to provide services to the contracting savings bank's customers at any or all of the offices of the other savings banks, banks, and savings and loan associations as if the offices of the other savings banks, banks, and savings and loan associations were offices of the contracting savings bank.

(B) The superintendent shall approve or disapprove a savings bank's request for approval of a contract authorized by division (A) of this section within thirty days after accepting a savings bank's application for the superintendent's approval of the contract.

(C) In determining whether to approve or disapprove a contract authorized by division (A) of this section, the superintendent shall consider all of the following:

(1) The adequacy of the management of the contracting savings bank and the other savings banks, banks, and savings and loan associations;

(2) The adequacy of the capital and stated capital of both the contracting savings bank and the other savings banks, banks, and savings and loan associations;

(3) The adequacy of the operations and controls of the contracting savings bank and the other savings banks, banks, and savings and loan associations;

(4) Whether the contract is being used to avoid application of the criteria for establishing a branch under section 1161.05 of the Revised Code or any kind of business combination under section 1161.76 or 1161.77 of the Revised Code.

(D) This section does not authorize a contracting savings bank to establish new deposit accounts, extend credit, or create new business relationships through offices of the other savings banks, banks, and savings and loan associations.

Cite as R.C. § 1161.071

Effective Date: 10-01-1996

1161.08 Commencing business.

A savings bank that fails to commence business within one year from the date of the issuance of its articles of incorporation pursuant to section 1161.04 of the Revised Code shall cease to exist, and its articles of incorporation shall be void.

Cite as R.C. § 1161.08

Effective Date: 10-23-1991

1161.09 Utilization of words suggesting that person or entity is engaged in savings bank business.

(A) A savings bank, savings and loan association, or bank may use in its name, with other words not forbidden by law, any of the following words or combinations of words: "savings," "building," "loan," "savings and loan," "building and loan," "bank," "banker," or "banking."

(B) Except as provided in division (A) of this section, no person, firm, company, association, fiduciary, partnership, or corporation, either domestic or foreign, unless the person or entity is lawfully authorized to do business in this state under this chapter and actually is engaged in carrying on a savings bank business, shall do business under any name or title that contains the terms "savings bank," "savings bank company," or words of similar import, or use any name or sign or circulate or use any letterhead, billhead, circular or paper whatever, or advertise or represent in any manner that indicates that the person's or entity's business is the character or kind of business carried on or transacted by a savings bank or that leads any person to believe that the person's or entity's business is that of a savings bank.

(C) Upon application by the superintendent of financial institutions or any savings bank, a court of competent jurisdiction may issue an injunction to restrain any entity from violating or continuing to violate division (B) of this section.

(D) Division (B) of this section does not apply to any corporation or association formed for the purpose of promoting the interests of savings banks or other similar institutions, banks organized under Chapter 1101. of the Revised Code, or savings and loan associations organized under Chapter 1151. of the Revised Code.

Cite as R.C. § 1161.09

Effective Date: 09-29-1999

1161.10 Authorized capital.

(A)

(1) When capital stock is mentioned in the articles of incorporation of a savings bank, it means the authorized capital. The organization of the savings bank may be completed and business commenced when a sum equal to five per cent of the authorized capital is subscribed and paid in and the names and addresses of its officers and not less than two copies of its constitution and bylaws have been filed with and approved by the superintendent of savings banks.

(2) No corporation shall transact any business, except a business that is incidental and necessary to its preliminary organization, until it has been authorized by the superintendent to do so.

(3) No amendment to the constitution or bylaws shall become effective until approved by the superintendent.

(4) The authorized capital of the corporation shall be not less than two million dollars nor more than ten million dollars, as the superintendent may determine. In addition, the superintendent may, in his discretion, fix the amount of reserve funds to be established by the sale of the stock at a premium and the amount of the expense fund for operating losses to be created by nonrefundable contributions.

(5) Five years after the savings bank commences business, any remaining balance in the expense fund shall be transferred to the reserve funds, if the savings bank is on a profitable operating basis as determined by the superintendent.

(B) The stock sold by any savings bank shall be accounted for to the savings bank in the full amount paid for it. No commission or fee shall be paid for selling the stock. The superintendent shall refuse authority to commence business to any savings bank if commissions, contributions, or fees have been paid or contracted to be paid, directly or indirectly, by anyone, for selling or securing subscriptions for stock in the savings bank.

(C) Division (B) of this section does not apply to any sale of stock by a savings bank after authority has been given to the savings bank to commence business under section 1161.12 of the Revised Code or after it has converted from a savings and loan association pursuant to section 1161.63 of the Revised Code or from a bank pursuant to section 1161.631 of the Revised Code.

Cite as R.C. § 1161.10

Effective Date: 10-23-1991

1161.11 Savings bank organized as mutual savings bank without stock.

(A) A savings bank may be organized under this chapter as a mutual savings bank without stock, the capital of which is in the form of savings deposits, or a mutual savings bank organized under this chapter may convert itself into a mutual savings bank without stock, the capital of which is in the form of savings deposits, by amendment of its articles of incorporation and constitution in the manner set forth in division (C) of section 1161.67 of the Revised Code. Upon conversion, the savings bank is subject to the limitations of this section and section 1161.29 of the Revised Code.

(B) A depositor of the savings bank shall be a voting member and joint owner of the savings bank upon the terms and conditions provided by the articles of incorporation, constitution, and bylaws of the savings bank.

(C) The capital of the savings bank shall be in the form of savings deposits and shall be maintained at a level equal to the amount which would be applicable if the savings bank had not converted itself into a savings bank without stock.

(D) Upon conversion, the holders of shares or stock shall become depositors of the savings bank without further action by them and they shall have all the rights of depositors as set forth in this section. The amount of the savings deposits shall be a sum equal to the value of the shares or stock as shown on the books and records of the savings bank.

(E) In the event of a voluntary or involuntary liquidation, dissolution, or winding up of the savings bank or in the event of any other situation in which the priority of the savings deposits of the savings bank is in controversy, all the savings deposits, to the extent of their withdrawal value, shall be debts of the savings bank not having priority, other than any priority arising or resulting from consensual subordination, over other general creditors of the savings bank and, in addition, the savings deposits shall have the same right to share in the remaining assets of the savings bank that they would have if they were shares or stock.

(F) Whenever "share" or "stock" appears in this chapter or Chapter 1163. or 1165. of the Revised Code or in any other section of the Revised Code referred to directly or incorporated by reference in those chapters, unless the context otherwise requires, the term means savings deposits in respect of any savings bank without stock. Whenever "shareholder" appears in those chapters or sections, unless the context otherwise requires, it means depositor in respect of such savings banks. Whenever "dividend" appears in those chapters or sections, unless the context otherwise requires, it means interest in respect of such savings banks.

Cite as R.C. § 1161.11

Effective Date: 10-23-1991

1161.111 Converting to stock form.

A savings bank without permanent stock may convert itself to the stock form, subject to the rules of the superintendent of savings banks. The superintendent shall adopt rules governing such conversions, but prior to the adoption of the rules, a savings bank without stock may convert to the permanent stock form with the prior approval of the superintendent.

Cite as R.C. § 1161.111

Effective Date: 10-23-1991

1161.12 Authorization to commence business.

When a certificate, signed by the president, secretary, or treasurer of an incorporated savings bank, is transmitted to the superintendent of savings banks notifying him that the required amount of capital stock of the corporation is subscribed and paid in and that the corporation has complied with all the provisions of law required before it can be authorized to commence business, the superintendent shall examine its affairs and ascertain especially the amount of money paid in on account of its capital, the name and place of residence of each director, the amount of capital stock paid in of which each director is the owner in good faith, the financial condition of the corporation, the adequacy of its capital, its future earnings prospects, the general character of its management, the convenience and needs of the community to be served, and whether the corporation has complied with all the provisions of law required to entitle it to engage in business. If upon the examination of these and any other facts which may come to his knowledge, the superintendent finds that the corporation is entitled to commence business, he shall give it a certificate under his hand and official seal that it has complied with all the requirements of law and is authorized to commence business. The superintendent shall not issue the certificate or certify to the secretary of state that the corporation is entitled to commence business if upon the examination the superintendent has reason to believe that the accounts of the savings bank will not be insured by the federal deposit insurance corporation upon the commencement of business.

Cite as R.C. § 1161.12

Effective Date: 10-23-1991

1161.13 Interim savings bank.

Notwithstanding the definition of "savings bank" set forth in division (A)(1) of section 1161.01 of the Revised Code, the superintendent of savings banks may authorize the secretary of state to record articles of incorporation of an interim savings bank organized under this chapter to facilitate a merger, consolidation, or acquisition of an existing savings bank, or to facilitate any other transaction the superintendent may approve. In connection with the merger, consolidation, acquisition, or transaction, the superintendent may waive the minimum authorized capital requirements of section 1161.10 of the Revised Code and the statutory reserve and net worth requirements established pursuant to section 1161.53 of the Revised Code, and may deviate from the provisions relating to the consideration of applications to organize a savings bank as set forth in this chapter. In the event that the merger, consolidation, or acquisition or transaction does not occur within a one-year period after the date upon which the interim savings bank is incorporated, its articles of incorporation shall be declared void by the superintendent. This one-year period may not be extended.

Cite as R.C. § 1161.13

Effective Date: 10-23-1991

1161.14 Maintaining books and records.

Every savings bank shall keep books and records in which shall be entered the name and the last known address of each stockholder; the number of shares, fractions of shares, or stock deposits held by each; the time each person became a stockholder; and all transfers of stock, stating the time when made, the number of shares or of stock deposits transferred, and by whom they were transferred. A list of shareholders shall be exhibited by the savings bank to shareholders or their authorized representative as the constitution or bylaws of the savings bank may provide.

Cite as R.C. § 1161.14

Effective Date: 10-23-1991

1161.15 Notice of shareholder meeting.

Whenever shareholders of a savings bank are required or authorized to elect directors or to take any other action at a meeting, either annual or special, a notice of the meeting shall be given by either of the following methods:

(A) By publication, once each week on the same day of the week for three consecutive weeks immediately preceding the date of the meeting in a newspaper published in and of general circulation in the county in which the principal office of the savings bank is located, of a notice containing the name of the savings bank and the purpose, place, date, and hour of the meeting;

(B) By notice served upon or mailed to shareholders as provided in section 1701.41 of the Revised Code.

Cite as R.C. § 1161.15

Effective Date: 10-23-1991

1161.16 Directors' terms.

The directors of a savings bank may be elected for any term not less than one nor longer than three years. If the term is longer than one year, it shall be so arranged that, as nearly as possible, the terms of an equal number of directors will expire each year.

Cite as R.C. § 1161.16

Effective Date: 10-23-1991

1161.17 Quorum.

A majority of all directors of a savings bank is necessary to constitute a quorum for the transaction of business by its board of directors. Except as otherwise provided by law or in the constitution or bylaws of the savings bank, the acts of a majority of the directors who are present, at a meeting at which a quorum is present, are the acts of the board.

Cite as R.C. § 1161.17

Effective Date: 10-23-1991

1161.18 Meetings of board of directors - committees.

(A)

(1) A savings bank's board of directors shall meet monthly unless the savings bank's constitution provides for a different frequency of meetings, which shall not be less than quarterly.

(2) Division (A)(1) of this section does not prohibit either of the following:

(a) More frequent meetings of a savings bank's board of directors than required by division (A)(1) of this section;

(b) The superintendent of financial institutions requiring a savings bank's board of directors to meet more frequently than required by division (A)(1) of this section if the superintendent determines more frequent meetings are appropriate because of circumstances regarding the savings bank.

(B) A savings bank's constitution may authorize the board of directors to do both of the following:

(1) Create an executive committee or any other committee of the board of directors, each consisting of at least three directors;

(2) Delegate to an executive committee or other committee of the board of directors described in division (B)(1) of this section, any authority of the board of directors, however conferred, other than the authority to fill vacancies on the board of directors or to fill vacancies on a committee of the board of directors.

(C) All of the following apply to any executive committee or other committee described in division (B) of this section:

(1) The board of directors may appoint one or more of the directors as alternate members of a committee of the board of directors to take the place of any absent member at any meeting of the committee of the board of directors.

(2) Each committee of the board of directors serves at the pleasure of the board of directors, acts only in intervals between meetings of the board of directors, and is subject to the control and direction of the board of directors.

(3) Unless otherwise provided in the constitution or ordered by the board of directors, a committee of the board of directors may act by a majority of its members at a meeting or by a writing or writings signed by all of its members.

(4) An act or authorization of an act by a committee of the board of directors that is within the authority delegated to the committee is as effective for all purposes as an act or authorization of an act done by the board of directors.

Cite as R.C. § 1161.18

Effective Date: 10-23-1991; 04-06-2007

1161.19 Compensating directors and officers.

(A) The compensation of the directors of a savings bank shall be fixed by the stockholders, or, in the case of a savings bank without permanent stock, by the members, at the annual meeting. The compensation of directors shall be reasonable in relation to the services performed and the financial condition of the savings bank. A director also may be a salaried officer of the savings bank, but a majority of the directors shall not be salaried officers of the savings bank.

(B) The directors of a savings bank shall set the compensation of the chief executive officer of the savings bank. The compensation of all officers of the savings bank shall be reasonable in relation to the services performed and the financial condition of the savings bank.

(C) The superintendent of savings banks, in accordance with Chapter 119. of the Revised Code, may adopt rules regarding the composition of the board of directors of a savings bank.

Cite as R.C. § 1161.19

Effective Date: 10-23-1991

1161.20 Receiving unlawful fee, commission or gift.

(A) No director, officer, employee, or attorney of a savings bank shall knowingly, directly or indirectly, stipulate for, assent to receive, or receive anything of value as a fee, commission, or gift from any person or corporation other than the savings bank making the loan, for procuring, endeavoring to procure, or performing any service, except reasonable attorney's fees and appraisal fees for services, in connection with any loan from or investment by the savings bank.

(B) Whoever violates division (A) of this section is disqualified from acting as a director, officer, employee, or attorney of any savings bank within this state for five years after the date he is convicted of the violation.

Cite as R.C. § 1161.20

Effective Date: 10-23-1991

1161.21 Oaths.

Each director, officer, and member of an appraisal committee of a savings bank, when appointed or elected, shall take an oath that he, so far as the duty devolves upon him, will diligently and honestly administer the affairs of the savings bank, and will not knowingly violate, or willingly permit to be violated, any law applicable to the savings bank. The oath shall be subscribed by the person making it and certified by an officer authorized to administer oaths. A copy shall be filed in the records of the savings bank.

Cite as R.C. § 1161.21

Effective Date: 10-23-1991

1161.22 Removal of director or officer.

(A)

(1) Every director and officer of a savings bank is subject to removal by the superintendent of savings banks on any of the following grounds:

(a) Knowingly participating in or consenting to a violation of this chapter or Chapter 1163. or 1165. of the Revised Code, regardless of whether the participation or consent is defined or interpreted in a guideline issued pursuant to section 1163.26 of the Revised Code;

(b) Knowingly participating in or consenting to any unsafe or unsound practice in conducting the business of the savings bank, regardless of whether the practice is defined or interpreted in a guideline issued pursuant to section 1163.26 of the Revised Code;

(c) Failure to properly perform his obligations under, or failure to comply with a final or summary cease-and-desist order issued under division (A) or (B) of section 1163.03 of the Revised Code, or failure to pay a civil penalty assessed under division (B) of section 1163.21 of the Revised Code.

(2) Removal under division (A)(1) of this section shall occur only after a hearing, written notice of which, together with a statement of charges, has been sent by registered mail ten days in advance to the director or officer. Pending an investigation by and a hearing before the superintendent, the director or officer shall not act for the savings bank. The hearing shall be held not later than fifteen days after the notice has been sent by the superintendent, and shall comply with section 119.09 of the Revised Code.

(B) Whenever the superintendent issues a removal order, the aggrieved party, within thirty days after notice of his removal, may file in the court of common pleas of Franklin county, or of the county in which the savings bank in question has its principal place of business, a petition against the superintendent officially, as defendant, alleging the facts upon which he relies for a reversal of the action of the superintendent complained of and praying for a reversal thereof. Immediately upon filing the petition, summons shall be issued to the sheriff of Franklin county to be served on the superintendent. The summons shall be returnable within five days from its date, and in all other respects shall be made as in civil actions. Upon service of the summons in accordance with this division, the allegations of the petition shall be deemed to stand denied without pleading and the cause shall be advanced and heard without delay.

(C) Except as otherwise provided in this division, any person who is removed as a director or an officer of a savings bank by the superintendent under division (A) of this section, and who either does not appeal his removal or whose removal is upheld upon appeal, is forever disqualified from serving as a director or an officer of any savings bank. If, however, the superintendent, upon written application of the person removed, and pursuant to an adjudication conducted in accordance with Chapter 119. of the Revised Code, finds a compelling reason for removing the disqualification of this division, he may issue an adjudication order removing the disqualification and declaring the person again eligible to serve as a director or an officer of a savings bank.

(D) The superintendent may send notice of a removal order to any state or federal government agencies he considers appropriate.

Cite as R.C. § 1161.22

Effective Date: 10-23-1991

1161.23 Receiving deposits.

(A)

(1) A savings bank may receive money on deposit or stock deposits from any persons, firms, corporations, and courts, or their agents, officers, and appointees, and may pay interest thereon. When the deposits are made to the joint account of two or more persons, whether adults or minors, with a joint order to the savings bank that the deposits or any part thereof are to be payable on the order of any of the joint depositors, and to continue to be so payable notwithstanding the death or incapacity of one or more of the persons making them, the account shall be payable to any of the survivors or order notwithstanding the death or incapacity. No recovery shall be had against the savings bank for amounts so paid and charged to the account. A savings bank may charge fees in connection with the administration of accounts and deposits established under this chapter.

(2) A savings bank may receive deposits of moneys of the state, or any county or subdivision of the state, pursuant to and in compliance with Chapter 135. of the Revised Code.

(3) Subject to regulation of the United States treasury department, a savings bank may act as a depository for federal taxes and as a treasury tax and loan depository. A savings bank may permit these accounts to be subject to immediate withdrawal.

(B) In addition to the custodian power authorized by division (A) of this section, a savings bank may specifically serve as custodian for any fund which qualifies, at the time the savings bank becomes custodian, for tax treatment under section 408 of the "Internal Revenue Code of 1986," 100 Stat. 2085, 26 U.S.C.A. 1 , as amended.

Cite as R.C. § 1161.23

Effective Date: 10-23-1991

1161.24 Serving as trustee.

(A) A savings bank may serve as trustee of any trust that qualifies, at the time the savings bank becomes trustee, for tax treatment under section 401 or 408 of the "Internal Revenue Code of 1986," 100 Stat. 2085, 26 U.S.C.A. 1 , as amended. The savings bank may invest the funds of any such trust in savings accounts or deposits of a domestic savings bank or in equity or debt securities issued by a domestic savings bank.

(B) Whenever any deposit or stock deposit is made in a savings bank by any person in trust for another and no further notice of the existence and terms of a legal and valid trust is given in writing to the savings bank, the deposit or stock deposit or any part thereof together with the dividends or interest thereon, in the event of the death of the trustee, may be paid to the person for whom the deposit or stock deposit was made.

(C) Any funds held in trust as authorized by division (A) or (B) of this section may be commingled by the trustee savings bank in one or more accounts. Whenever individual trust funds are commingled, separate records shall be maintained by the trustee savings bank for each trust account comprising the commingled fund.

(D) Exercise of the limited trust power granted savings banks by this section is not subject to regulation other than by the superintendent of savings banks pursuant to this chapter and Chapters 1163. and 1165. of the Revised Code.

Cite as R.C. § 1161.24

Effective Date: 10-23-1991; 01-01-2007

1161.25 Recognizing claim to account or property.

(A) A savings bank shall not be required, in the absence of a court order or indemnity required by this section, to recognize any claim to, or any claim of authority to exercise control over, a deposit account, stock deposit account, safe deposit box, or property held in safekeeping by the savings bank made by a person or persons other than either of the following:

(1) The person in whose name the deposit account, stock deposit account, property, or safe deposit box is held by the savings bank;

(2) An individual or group of individuals who are authorized to draw upon or control the deposit account, stock deposit account, property, or safe deposit box pursuant to a certified resolution of a corporation or unincorporated association, currently on file with the savings bank which has not been revoked to the actual knowledge of the savings bank and is not the subject of a dispute actually known to the savings bank as to its original validity.

(B) To require a savings bank to recognize an adverse claim to, or adverse claim of authority to control, a deposit account, stock deposit account, safe deposit box, or property held in safekeeping, whoever makes the claim shall do either of the following:

(1) Obtain and serve on the savings bank a certified copy of an appropriate order by a court having jurisdiction restraining any action with respect to the deposit account, stock deposit account, safe deposit box, or other property until further order of such court, or instructing the savings bank to pay the balance of the deposit account or stock deposit account, or deliver the property, in whole or in part, as provided in the order;

(2) Deliver to the savings bank a bond, in form and in amount and with sureties satisfactory to the savings bank, indemnifying the savings bank against any liability, loss or expense which it might incur because of its recognition of the adverse claim or because of its refusal by reason of the claim to honor any application for withdrawal or deliver any property to or permit access to a safe deposit box by anyone described in division (A)(1) or (2) of this section.

Cite as R.C. § 1161.25

Effective Date: 10-23-1991

1161.26 Issuing stock.

A savings bank may issue stock to members, upon certificates or upon written subscription, on such terms consistent with sections 1161.02 to 1161.75 of the Revised Code as its constitution and bylaws provide.

Each member may vote his stock to the extent and in the manner provided by the constitution of the savings bank.

A savings bank may issue capital notes or debentures at such times, in such amounts, and subject to such terms as the superintendent of savings banks in writing approves, but in no event shall the terms require or permit that the holders of the capital notes or debentures be held individually responsible as such holders for any debts, contracts, or engagements of the savings bank.

This section does not prohibit a savings bank from issuing permanent stock.

Cite as R.C. § 1161.26

Effective Date: 10-23-1991

1161.27 Purchasing own shares of permanent stock.

A savings bank may purchase its own shares of permanent stock, if the purchase is not inconsistent with its articles, constitution, or bylaws.

Cite as R.C. § 1161.27

Effective Date: 10-23-1991

1161.28 Assessments.

A savings bank may assess and collect from members and others such dues, fines, interest and premium on loans made, or other assessments as are provided for in its constitution and bylaws. These assessments shall not be deemed usury, although in excess of the legal rate of interest.

Cite as R.C. § 1161.28

Effective Date: 10-23-1991

1161.29 Withdrawals.

(A) A savings bank may permit withdrawal of deposits upon such terms as it provides.

(B) A savings bank may extend secured or unsecured credit in the form of overdraft privileges related to deposits subject to withdrawal under division (A) of this section.

Cite as R.C. § 1161.29

Effective Date: 10-23-1991

1161.30 Withdrawals through other savings banks.

Without prejudice to the generality of the powers conferred by section 1161.29 of the Revised Code, a savings bank may permit withdrawal of deposits through another savings bank or a foreign savings bank, provided the foreign savings bank's accounts are insured by the federal deposit insurance corporation, and the savings bank or foreign savings bank is located more than fifty miles from the residence of the account holder.

Cite as R.C. § 1161.30

Effective Date: 10-23-1991

1161.31 Tendering credit to deposit account.

A borrower from a savings bank may tender, in discharge of any of his obligations to the savings bank, credit to a deposit account standing in his name on the books of the savings bank, regardless of when the credit was created or transferred to the name of the borrower. The savings bank shall accept such tender at the full face value of the credit in discharge of the obligations, but for each dollar of the credit so tendered, the borrower, if required by the savings bank, shall pay one dollar in cash.

No savings bank shall refuse to transfer a credit, or a portion of a credit, on its books unless the savings bank has a valid lien on the credit, or a valid right of appropriation thereof, or unless the transferee is not the owner of the credit sought to be transferred.

Cite as R.C. § 1161.31

Effective Date: 10-23-1991

1161.32 Cancelling shares.

A savings bank may cancel shares and parts of shares of stock upon which the credits have been repurchased by it, or upon which loans have been repaid, and reissue them as new stock.

Cite as R.C. § 1161.32

Effective Date: 10-23-1991

1161.33 Transactions with minors.

A savings bank may do all of the following:

(A) Issue stock to minors and receive deposits thereon;

(B) Permit these stock and deposits to be withdrawn, transferred, pledged, and voted by the minors in the same manner as other stock and stock deposits;

(C) Receive deposits of money by or for minors and pay them to the minors or upon their order. The receipt or paid order of the minor therefor shall be an acquittance of the rights of all concerned.

Cite as R.C. § 1161.33

Effective Date: 10-23-1991

1161.34 Real estate investments.

(A) Without prejudice to the generality of the powers conferred by section 1161.68 of the Revised Code, a savings bank may invest in real estate and interests therein as the board of directors considers necessary or convenient for the transaction of the business of the savings bank, including the ownership of stock of a wholly owned subsidiary corporation having as its exclusive authority the ownership and management of the property or interests. The total amount so invested shall not exceed the amount of the savings bank's net worth at the time the investment is made. A savings bank may invest in real estate in excess of the amount prescribed in this division with the written approval of the superintendent of savings banks.

(B) A savings bank may own or hold any real estate that it acquires by foreclosure, conveyance in lieu of foreclosure, or other legal proceedings in relation to loan security interests for a period not in excess of five years, but the superintendent, upon application of a savings bank, may grant to it in writing the power to hold the real estate for a longer period. Real estate sold on contract, but with title remaining in the name of the savings bank, shall not be deemed real estate for the purpose of this division.

Cite as R.C. § 1161.34

Effective Date: 10-23-1991

1161.35 Borrowing.

(A) A savings bank may borrow money and may pledge and otherwise encumber any of its assets to secure its debts. All borrowings under this section shall comply with the applicable rules and regulations of the federal deposit insurance corporation regarding the borrowings and with rules adopted by the superintendent of savings banks in accordance with Chapter 119. of the Revised Code.

(B) The superintendent shall establish, by rule adopted in accordance with Chapter 119. of the Revised Code, standards of safety and soundness regarding the following:

(1) Investments in securities under repurchase or reverse repurchase agreements;

(2) Investment limits for repurchase or reverse repurchase agreements with a single broker-dealer or similar entity;

(3) Collateralization requirements for reverse repurchase agreements or other similar instruments.

Cite as R.C. § 1161.35

Effective Date: 10-23-1991

1161.36 Real estate loans.

(A) A savings bank may make, invest in, sell, purchase, participate, or otherwise deal in loans to members and others on such terms as are provided by the savings bank, subject to the provisions of this section and section 1161.38 of the Revised Code.

(B) Loans may be made upon the security of real estate that is improved residential property, a combination of residential and business property, or a farm under cultivation, as follows:

(1) The amount loaned upon any one property shall not exceed ninety per cent of the appraised value, except as otherwise provided in divisions (B)(2) and (3) of this section.

(2) The maximum amount loaned upon any one property shall be ninety-five per cent of the appraised value of the security property if all of the following criteria are met:

(a) The loan contract requires that, in addition to principal and interest payments on the loan, one-twelfth of the estimated annual taxes and assessments on the security property be paid monthly in advance.

(b) The borrower has executed a certificate stating that the borrower occupies or in good faith intends to occupy the property or one dwelling on the property as his principal residence.

(3) The maximum loan to value ratios under divisions (B)(1) and (2) of this section shall not be applicable if one or more of the following criteria apply:

(a) That portion of the loan in excess of ninety-five per cent is insured or guaranteed by a mortgage insurance company acceptable to the superintendent of savings banks, or the savings bank establishes and maintains a specific reserve of one per cent of the original principal balance until reduced to ninety per cent of the value of the security property;

(b) The loan is secured by a single-family dwelling or a one-family condominium unit and it is:

(i) Made under regulations for the housing opportunity allowance program authorized by the "Emergency Home Finance Act of 1970," 47 Stat. 736, 12 U.S.C. 1437 , as amended;

(ii) Insured or guaranteed by an agency or instrumentality of this state.

(4) For purposes of this section, "value" means market value. Loans made pursuant to divisions (B)(1), (2), and (3) of this section shall be payable in weekly, monthly, quarterly, semiannual, or annual installments sufficient to retire the loan within forty years or less. For purposes of this section, "installments" means regular periodic payments, equal or unequal, sufficient to retire the debt, interest and principal, within the contract period. The contracts may be granted without provision for amortization or may provide for periods of negative amortization. Payments on all installment loans, except construction loans, shall begin not later than ninety days after the advance of the loan. On installment construction loans, the payments shall begin not later than thirty-six months after the date of the first advance for construction.

(C) Loans may be made on the security of building lots and sites that, by reason of off-site or other improvements as are available and common to the area, are ready for the construction on each building lot or site of a structure designed primarily for residential use. These loans shall comply with the following requirements:

(1) Single-family-dwelling loans for a borrower's principal residence, as evidenced by a borrower's certification of intention executed at the time the loan is made, shall not exceed seventy-five per cent of the value of the security property and shall be repayable within fifteen years, with interest payable at least semiannually. The loan contract shall provide for monthly payments sufficient to amortize at least thirty per cent of the original principal amount before the end of the loan term.

(2) Loans other than for a borrower's principal residence shall not exceed seventy-five per cent of the value of the security property and shall be repayable within five years, with interest payable at least semiannually beginning not more than one year after the initial disbursement.

(D) Loans may be made on the security of unimproved real estate but the loans shall not exceed sixty-six and two-thirds per cent of the value of the security property, and shall be repayable within three years with interest payable at least semiannually.

(E) A savings bank may make a collateral loan to the extent that it could make or purchase the underlying assigned loans under applicable law and regulations. For purposes of this division, a "collateral loan" means a loan which is secured by an assignment of loans.

(F) Notwithstanding the limitations set forth in any other section of the Revised Code, a savings bank may impose a prepayment penalty. On a loan secured by a lien upon a home occupied or to be occupied by the borrower, the prepayment penalty shall comply with the following:

(1) The loan contract shall expressly provide for a prepayment penalty.

(2) If the loan contract provides that the interest rate may be adjusted periodically, no prepayment penalty may be imposed within ninety days following notice of an adjustment to the borrower.

(3) If the savings bank gives written notice to the borrower that the loan is due pursuant to a due-on-sale clause, or commences a foreclosure proceeding to enforce a due-on-sale clause or to seek payment in full as a result of invoking the clause, no prepayment penalty may be imposed.

Cite as R.C. § 1161.36

Effective Date: 10-23-1991

1161.37 Other loans.

(A) Subject to the procedures of this section and section 1161.38 of the Revised Code, a savings bank may make, invest in, sell, purchase, participate, or otherwise deal in loans to members and others on such terms as are provided by the savings bank upon obligations secured by liens on real estate upon which one or more buildings have been or are to be permanently erected, or which by reason of improvements is usable by a business or industrial enterprise, or which produces sufficient income to maintain the property and retire the loan in accordance with its terms.

(B) Loans made under this section shall not aggregate more than twenty per cent of the savings bank's assets.

(C) The amount loaned on each loan under this section shall not be more than ninety per cent of the appraised value of the real estate.

(D) Except as provided in division (E) of this section, loans under this section shall be payable in weekly, monthly, quarterly, semiannual, or annual installments sufficient to retire the loan within thirty years from the date installment payments are to begin.

(E) Loans under this section, including construction loans, may be granted without provision for amortization of principal, provided the loans require the periodic payment of interest, do not exceed seventy-five per cent of the appraised value of the real estate, and are made for a term of not more than five years.

(F) For purposes of this section, "installments" means regular periodic payments, equal or unequal, sufficient to retire the debt, interest and principal, within the contract period. The contract may provide for periods of negative amortization. Payments on all installment loans, except construction loans, shall begin not later than ninety days after the advance of the loan. The payments on installment construction loans shall begin not later than thirty-six months after the date of the first advance for construction.

Cite as R.C. § 1161.37

Effective Date: 10-23-1991

1161.38 Procedures for real estate loans.

A savings bank shall observe the following procedures in making real estate loans:

(A) The savings bank may make loans upon obligations secured by a mortgage or deed of trust on real estate, which mortgage or deed of trust shall be made directly to the savings bank. This section does not prevent a savings bank organized under this chapter from accepting additional security when the primary and principal security is a mortgage or deed of trust on real estate.

(B) The title of the borrower shall be a fee simple title or a leasehold or subleasehold estate in real property extending or renewable automatically or at the option of the holder for five years after maturity of the loan, if, in the event of default, the real estate could be used to satisfy the obligation with the same priority as a mortgage or a deed of trust in the jurisdiction where the real estate is located.

(C) In respect to any loan made upon the security of real estate, if it is agreed or contemplated that improvements will be made on the real estate and become a part of the security, the real estate is "improved" within the meaning of division (B) of section 1161.36 and section 1161.37 of the Revised Code and the value of the improvements shall be included in the appraisal value of the real estate. As used in this division, "improvements" does not include "development" as defined in division (F) of section 1161.39 of the Revised Code.

(D) No savings bank shall grant a mortgage loan unless it has first obtained a written application, signed by the applicant borrower or the applicant borrower's agent, the form and contents of which shall disclose the purpose for which the loan is sought and the identity of the security property. The records for each loan shall contain a written report of the financial ability and credit standing of the borrower.

(E) Machinery and equipment in a building that are adapted to the use being made of the land and building and that are intended to be permanent additions thereto will constitute a portion of the real estate for purposes of this chapter and may be appraised in calculating the maximum permissible loan for purposes of this chapter notwithstanding that the law of this state is otherwise for tax or other special purposes.

(F) The records for each loan shall include an appraisal report prepared and signed by an appraisal committee, or by a qualified appraiser designated by its board of directors, prior to the approval of an application for a loan, and information and data concerning the appraised property to substantiate the market value of the security described in the report. The reports shall be kept by the savings bank in such form as to be available at all times to the examiners or other agents of the superintendent of financial institutions.

(G)

(1)

(a) Except as provided in division (G)(1)(b) of this section, no savings bank shall make loans or extensions of credit to any one borrower that, in the aggregate, exceed fifteen per cent of the saving bank's unimpaired capital and surplus or five hundred thousand dollars, whichever is greater.

(b) A savings bank may extend additional credit to any one borrower in an amount equal to ten per cent of the savings bank's unimpaired capital and unimpaired surplus, if this additional loan is secured by readily marketable collateral having at all times a current value of at least one hundred per cent of the amount of the loan. If the value of the collateral falls below one hundred per cent of the outstanding loan, the loan becomes subject to the general limitation provided in division (G)(1)(a) of this section.

(c) Loans or extensions of credit that exceed the general limitation provided in division (G)(1)(a) of this section shall be brought into conformance with that division within five business days.

(2) The superintendent of financial institutions shall adopt rules, in accordance with Chapter 119. of the Revised Code, to establish standards governing loans or the extension of credit to one borrower. The rules shall be consistent with and not less stringent than any rules adopted by the federal deposit insurance corporation and the regulations issued by the office of the comptroller of the currency, 12 C.F.R. Part 32, as amended, dealing with limitations on loans and extensions of credit to one borrower.

(H)

(1) No savings bank, directly or indirectly, shall make any loan to any of its officers, directors, shareholders, controlling persons, or to members of their immediate families, or to any corporation, partnership, trust, or other form of business entity in which any of its officers, directors, shareholders, or controlling persons have any interest, except as authorized pursuant to section 22(h) of the "Federal Reserve Act of 1913," 38 Stat. 251, 48 Stat. 182, and 92 Stat. 3644, 12 U.S.C. 221 , 375a , and 375b , as amended, and in accordance with the rules and regulations issued thereunder.

(2) No savings bank shall make any loan, or otherwise extend credit, or engage in any transaction with any of its affiliates, except as authorized under sections 23A and 23B of the "Federal Reserve Act of 1913," 38 Stat. 251, 48 Stat. 183, and 101 Stat. 564, 12 U.S.C. 221 , 371c , and 371c-1 , as amended.

(I) The limitations and conditions imposed by this chapter do not apply to a purchase money mortgage taken by a savings bank upon real estate sold by it, to a mortgage held by a savings bank to secure a debt previously contracted, or to prevent or diminish loss with respect to loans or renewals of the loans.

(J) The limitations contained in this chapter, relating to maximum loan terms and loan-to-value ratios, do not apply to any loan on the security of a first lien on real estate that is being constructed, remodeled, rehabilitated, modernized, or renovated, to be the subject of an annual contributions contract for low-rent housing under the "United States Housing Act of 1937," 50 Stat. 888, 42 U.S.C. 1401, as amended. No loan by a savings bank on the security of this real estate shall exceed ninety per cent of the amount of the appraisal or, in lieu of the appraisal, ninety per cent of the purchase price if the real estate is to be purchased by a local public housing authority. This section applies to a loan on this real estate only when it is first constructed, remodeled, rehabilitated, modernized, or renovated, or when it first becomes the subject of a contributions contract under the act.

(K) In determining compliance with maximum loan-to-value ratios in this chapter, at the time of making a loan, a savings bank shall add together the unpaid amount of all mortgages, liens, or other encumbrances on the security property having priority over the savings bank's mortgage, and shall not make the loan unless the total unpaid balance of the prior mortgages, liens, and other encumbrances, including the one to be made, but excluding loans that will be paid off out of the proceeds of the new loan, does not exceed applicable maximum loan-to-value ratios prescribed in this chapter, as indicated by documentation retained in the loan file.

Cite as R.C. § 1161.38

Effective Date: 09-29-1999

1161.39 Loans secured by real estate for acquisition and development of undeveloped or partially developed land for primarily residential use.

A savings bank may make, invest in, sell, purchase, participate, or otherwise deal in loans to members and others upon obligations secured by real estate for the acquisition and development of undeveloped or partially developed land for primarily residential use subject to section 1161.38 of the Revised Code and the following limitations and procedures:

(A) No savings bank shall have outstanding to any one person, firm, or corporation any loan or loans made under this section in excess of two per cent of the assets of the savings bank.

(B) The amount loaned on any loan made under this section shall not exceed seventy-five per cent of the appraised value of the completed development of the land into building lots or sites ready for construction thereon for primarily residential use. The loan documentation shall contain a preliminary development plan that is satisfactory to the savings bank.

(C) The term of the loans shall not exceed five years and the interest on any loan shall be payable at least semiannually. The board of directors of a savings bank may approve the extension of any loan for a period of not more than two years if the interest on the loan is current and the principal balance of the loan is not in excess of seventy-five per cent of the current appraised value of the real estate security.

(D) The savings bank, before commencement of or during the development of the land, may disburse from the proceeds of any loan made pursuant to this section an amount not in excess of seventy-five per cent of the appraised value of the land, excluding the value of the proposed development.

(E) In addition to the amount authorized to be disbursed by division (D) of this section, a savings bank may disburse, from time to time during the period of development of the land, a total amount not exceeding seventy-five per cent of the value of the developments at the date of the disbursement plus seventy-five per cent of any remaining security. No disbursement shall be made unless the developments have been made in accordance with the preliminary development plan and specifications of the subdivision and in accordance with the requirements of the appropriate governmental authorities.

(F) For the purposes of this section, "development" includes the survey and platting of the land, the laying out and improvement of streets, the installation of water lines and mains, sewers, sidewalks, curbs, and facilities for the disposal of sewage, and the installation of such other improvement as may be necessary or advisable to prepare the land for primarily residential use.

Cite as R.C. § 1161.39

Effective Date: 10-23-1991

1161.40 Investment in mobile home chattel paper.

(A) As used in this section:

(1) "Mobile home" means a movable dwelling for occupancy on land made of one or more units, and having minimum width of ten feet, minimum area of four hundred square feet, and year-round living facilities for one family, including permanent provision for cooking, eating, sleeping, and sanitation.

(2) "Mobile home chattel paper" means a document evidencing a loan or interest in a loan secured by a lien on one or more mobile homes and equipment installed or to be installed therein.

(3) "Manufacturer's invoice price" means a manufacturer's itemized charges, shown on its invoice, for a specifically identified mobile home, furnishings, equipment, and accessories installed by the manufacturer, and freight.

(B) A savings bank may invest up to twenty per cent of its assets in mobile home chattel paper and interests therein.

(C) Appraisals or other generally accepted systems of valuation of used mobile homes shall support loans made under this section. Chattel paper shall have provisions to protect the savings bank, specifically regarding insurance, taxes, other governmental levies, and maintenance and repairs, and may include any other protection provision that is lawful and appropriate. The savings bank may pay taxes or other governmental levies and insurance premiums or other similar charges to protect its security interest, and may add these payments to the debt evidenced by the chattel paper. The savings bank shall seasonably perfect its security interest.

(D) A savings bank may invest in mobile home chattel paper that finances a mobile home dealer's acquisition of inventory, if all of the following criteria are met:

(1) The inventory is held for sale by the dealer in its ordinary course of business.

(2) The loan evidenced by the chattel paper is the dealer's obligation.

(3) The loan amount does not exceed the following:

(a) For new mobile homes, one hundred per cent of manufacturer's invoice price for each mobile home and equipment to be installed by the dealer;

(b) For used mobile homes, seventy-five per cent of appraised market value or other generally accepted valuation of each mobile home, including installed equipment.

(E) A savings bank may engage in the following types of retail financing:

(1) A savings bank may invest in retail mobile home chattel paper that is guaranteed under the "Servicemen's Readjustment Act of 1944," 72 Stat. 1203, 38 U.S.C. 1801 , as amended, or insured under the "National Housing Act," 48 Stat. 1246 (1934), 12 U.S.C. 1701 , as amended, or the "Servicemen's Readjustment Act of 1944," 72 Stat. 1203, 38 U.S.C. 1801 , as amended, or that has a commitment for the insurance or guarantee.

(2) A savings bank may invest in conventional retail mobile home chattel paper if:

(a) The mobile home is to be maintained as a residence of the owner, or beneficial owner, or an owner's relative.

(b) The mobile home is located at a mobile home park or other permanent or semipermanent site.

(c) The loan is payable within twenty years, in monthly installments equal or unequal, in amount sufficient to retire the debt, interest, and principal within the contract term. The contract term may include periods of negative amortization.

(d) The loan amount, excluding time-price differential or interest, however computed, does not exceed ninety per cent of buyer's total costs, including freight, itemized set-up charges, sales or other taxes, filing or recording fees imposed by law, and insurance premiums. Insurance premiums may be financed for customary physical damage insurance and vendor's single interest coverage on the mobile home for an initial policy term not to exceed three years and the cost thereof may be included as part of the buyer's total cost.

(F) With regard to purchase of an interest in retail mobile home chattel paper where the security property is or will be located more than one hundred miles from this state, the seller of the interest shall be an institution whose accounts or deposits are insured by a federal agency or a service corporation thereof and the seller, unless the seller is the savings bank's service corporation, shall retain at least a twenty-five per cent interest in each document evidencing a loan secured by the chattel paper.

(G) All mobile home chattel paper sold by a savings bank shall be sold without recourse.

Cite as R.C. § 1161.40

Effective Date: 10-23-1991

1161.41 Home improvement loans.

A savings bank may make, invest in, sell, purchase, participate, or otherwise deal in loans, on such terms as are provided by the savings bank with or without security, for property alteration, repair, or improvement, or for the equipping or furnishing of any residential real property.

Loans under this section shall be repayable in regular periodic installments, made at least quarterly, with the first installment due no later than one hundred twenty days from the date the loan is made and the final installment due no later than twenty years and thirty-two days from that date.

No savings bank may make any equipping loan to a director, officer, or employee of the savings bank, except for the equipping of a home or combination of home and business property owned and occupied, or to be owned and occupied, as a home by the director, officer, employee, or member.

For purposes of this section, "installments" means regular periodic payments, equal or unequal, sufficient to retire the debt, interest, and principal within the contract period. The contract may provide for periods of negative amortization.

Cite as R.C. § 1161.41

Effective Date: 10-23-1991

1161.42 Student loans.

(A) A savings bank may lend, or purchase loans that have been made, on such terms as are provided by the savings bank upon obligations secured by pledge of any negotiable evidence of debt arising from loans for the payment of expenses of education. The borrower shall certify to the savings bank that the proceeds of the loan are to be used by a full-time or half-time student solely for the payment of expenses of college, university, technical, vocational, or post-secondary education. For the purpose of this section, "education" means education at an institution which has been certified eligible to participate in federal guaranteed student loan programs by the United States department of education pursuant to the "Higher Education Act of 1965," 20 U.S.C.A. 1071 et seq., as amended. The aggregate of all loans for education shall at no time exceed five per cent of the savings bank's assets.

(B) A savings bank may lend on such terms as are provided by the savings bank upon obligations secured by pledge of stock or deposits in the savings bank, but the loans shall not exceed the face value of the stock or deposits.

(C) A savings bank may lend on such terms as are provided by the savings bank upon obligations secured by pledge of any of the securities provided for in section 1161.54 of the Revised Code not in excess of ten per cent of the assets of the savings bank.

(D) Notwithstanding sections 1161.36 to 1161.41 and 1161.70 of the Revised Code, a savings bank may make loans to its members or others evidenced by notes secured by mortgage or representing obligations insured by the federal housing administrator or the secretary of agriculture of the United States under Title I of "The Bankhead-Jones Farm Tenant Act," 50 Stat. 515 (1937), 7 U.S.C. 1010 , as amended, and may sell or hypothecate the notes. Savings banks may do all things necessary to obtain this insurance.

(E) A savings bank may make or acquire loans made for a project as defined in section 122.39 of the Revised Code, the payments on which are partly insured by the director of development pursuant to section 122.451 of the Revised Code.

Cite as R.C. § 1161.42

Effective Date: 12-02-1996

1161.43 Consumer loans, commercial paper, and corporate debt securities.

A savings bank may invest in consumer loans, commercial paper, and corporate debt securities subject to the following limitations, except that the total investment made under this section, at any one time, shall not exceed twenty per cent of a savings bank's assets:

(A) A savings bank may make, originate, purchase, sell, service, and participate in direct or indirect consumer loans provided that before indirect loans are made through a dealer, the dealer is approved by the savings bank's board of directors.

(1) If a loan that may be made under this division is also authorized to be made under another section that may have different percentage-of-assets and other limitations or requirements, a savings bank shall have the option of choosing under which applicable section the loan shall be made.

(2) The total balances of all outstanding unsecured loans to one borrower is limited to the lesser of one-fourth of one per cent of a savings bank's assets or five per cent of its net worth, provided that a savings bank may make up to three thousand dollars in unsecured loans to any one borrower.

(3) For purposes of this division, "consumer loan" means a secured or unsecured loan to a natural person for personal, family, or household purposes.

(B) A savings bank may invest in, sell, or hold commercial paper and corporate debt securities, including corporate debt securities convertible into stock, subject to the following limitations:

(1) An investment under this division includes the investing in, redeeming, or holding of shares in any open-end management investment company that is registered with the securities and exchange commission under the "Investment Company Act of 1940," 54 Stat. 847, 15 U.S.C. 80a-1 , as amended, and whose portfolio is restricted by the management company's investment policy, changeable only if authorized by shareholder vote, solely to the investments that a savings bank is authorized to invest in under this division and other rules or law.

(2) Investments under this division are limited as follows:

(a) As of the date of purchase, as shown by the most recently published rating made of the investments by at least one nationally recognized investment rating service, the commercial paper must be rated in one of the two highest grades and the corporate debt securities must be rated in one of the four highest grades.

(b) The commercial paper or corporate debt securities must be denominated in dollars and the issuer must be domiciled in the United States.

(c) At any one time, a savings bank's total investment in the commercial paper and corporate debt securities of any one issuer, or issued by any person or entity affiliated with the issuer, must not exceed one per cent of the savings bank's assets. This provision does not apply to investments in the shares of an open-end management investment company, in which case a savings bank's total investment in the shares of any one company must not exceed five per cent of the savings bank's assets.

(d) Investments in corporate debt securities convertible into stock are subject to the following additional limitations:

(i) Securities convertible into stock at the option of the issuer shall not be purchased.

(ii) At the time of purchase, the cost of the securities must be written down to an amount that represents the investment value of the securities considered independently of the conversion feature.

(iii) The securities shall be traded on a national securities exchange.

(iv) Savings banks shall not exercise the conversion feature.

(e) At any one time, the average maturity of a savings bank's portfolio of corporate debt securities must not exceed six years.

(f) A savings bank shall maintain information in its files adequate to demonstrate that it has exercised prudent judgment in making investments under this division.

(3) For purposes of this division, "commercial paper" means any note, draft, or bill of exchange that arises out of a current transaction or the proceeds of which have been or are to be used for current transactions, and that has maturity at the time of issuance of not exceeding nine months, exclusive of days of grace, or any renewal thereof the maturity of which is likewise limited. A "corporate debt security" means a marketable obligation, evidencing the indebtedness of any corporation in the form of a bond, note or debenture that is commonly regarded as a debt security and is not predominantly speculative in nature. A security is marketable if it may be sold with reasonable promptness at a price that corresponds reasonably to its fair value.

(C) Notwithstanding the limitations set forth in divisions (A) and (B) of this section, the superintendent of savings banks may permit a savings bank to invest in corporate debt securities of another institution in connection with the purchase or sale of a branch office, or in connection with a supervisory merger or acquisition.

Cite as R.C. § 1161.43

Effective Date: 10-23-1991

1161.44 Credit card operations.

A savings bank may issue credit cards, extend credit in connection therewith, and otherwise engage in or participate in credit card operations.

Cite as R.C. § 1161.44

Effective Date: 10-23-1991

1161.441 Charges under revolving credit agreement.

(A) As used in this section:

(1) "Revolving credit agreement" means an agreement pursuant to which a savings bank contemplates repeated transactions and the amount of credit that may be extended pursuant to the agreement is made available to the extent that any outstanding balance is repaid. "Revolving credit agreement" does not include an agreement secured by a residential mortgage.

(2) "Residential mortgage" has the same meaning as in section 1109.181 of the Revised Code.

(B) Notwithstanding any limitations contained in the Revised Code, a savings bank may charge interest, fees, and other charges under a revolving credit agreement at the same or lower rates or amounts that a savings bank located in another state may charge its revolving credit customers in this state.

Cite as R.C. § 1161.441

Added by 129th General AssemblyFile No.109, HB 322, §1, eff. 9/4/2012.

1161.45 Issuing commercial and standby letters of credit.

(A) A savings bank may issue commercial and standby letters of credit and may pledge collateral to secure its obligations thereunder, subject to Chapter 1305. of the Revised Code and to the following requirements:

(1) Each letter of credit must conspicuously state that it is a letter of credit.

(2) The issuer's undertaking must contain a specified expiration date or be for a definite term, and must be limited in amount.

(3) The issuer's obligation to pay must be solely dependent upon the presentation of conforming documents as specified in the letter of credit, and not upon the factual performance or nonperformance by the parties to the underlying transaction.

(4) The account party must have an unqualified obligation to reimburse the issuer for payments made under the letter of credit.

(B) To the extent funds are advanced under a letter of credit without compensation from the account party, the amount shall be treated as an extension of credit subject to percentage-of-assets limits and other requirements under an applicable provision of this chapter.

Cite as R.C. § 1161.45

Effective Date: 10-23-1991

1161.46 Loans for commercial, corporate, business, or agricultural purposes.

A savings bank may make, invest in, sell, purchase, and participate, or otherwise deal in secured or unsecured loans for commercial, corporate, business, or agricultural purposes. Loans made under this section shall not exceed ten per cent of the savings bank's assets. The superintendent of savings banks, by rule adopted in accordance with Chapter 119. of the Revised Code, may increase this limitation to a maximum of thirty per cent of assets, provided that the reserve requirement for a savings bank with an investment exceeding ten per cent of assets shall increase in proportion to the amount of the investment. The rule shall include a schedule setting the reserve requirements for investments in amounts exceeding ten per cent of assets.

Cite as R.C. § 1161.46

Effective Date: 10-23-1991

1161.47 Loans federally approved, insured or guaranteed.

Notwithstanding sections 1161.36 to 1161.41 and 1161.64 of the Revised Code and the constitution and bylaws of the savings bank, the savings bank may make, buy, sell, or hypothecate any loan secured by lien on real estate, if the loan is approved, insured, or guaranteed, in part or in full, or if a conditional guarantee of the loan has been issued, by the federal administrator of veterans' affairs, or by the United States or any agency or instrumentality thereof.

A farm loan made under this section shall be deemed secured by lien on real estate, even though the security includes livestock or farm equipment, or both, if the livestock or farm equipment, or both, are used in connection with the operation of the real estate pledged as security for the loan.

Cite as R.C. § 1161.47

Effective Date: 10-23-1991

1161.48 Participating in loans with supervised lenders.

(A) As used in this section, "lender" or "lenders" means any savings bank, savings and loan association, bank, or insurance company, that is supervised by an instrumentality of the United States or by any state within the United States, any service corporation in which the entire capital stock is owned by one or more of these institutions, any agency or instrumentality of the United States or any state thereof, or any mortgagee approved by the federal housing administrator.

(B) A savings bank may participate with another lender or lenders in making real estate loans or may purchase participating interests in real estate loans that would be qualified under this chapter for investment by the savings bank, but only the amount of the savings bank's participation interest shall be included in applying any per cent of assets limitation of this chapter.

(C) A savings bank may sell one or more participating interests in a mortgage loan or loans. Sales of participating interests may be made with or without recourse to the seller.

(D) No savings bank shall engage in any participation loan transaction not authorized by this section without prior written approval by the superintendent of savings banks.

(E) A savings bank may service any real estate loan in which:

(1) The savings bank held an interest at any time;

(2) Any member, stockholder, borrower, or depositor of the savings bank held an interest at any time;

(3) Any lender held an interest at any time.

Cite as R.C. § 1161.48

Effective Date: 10-23-1991

1161.49 Trust certificates or securities backed by federal programs.

A savings bank, singly or in joint venture with other eligible issuers, may issue and sell trust certificates or other securities based on and backed by a trust or pool composed of mortgages that are insured under the "National Housing Act," 48 Stat. 1246, 1248 (1934), 12 U.S.C. 1701 , 1709 , as amended, or that are insured or guaranteed under the "Servicemen's Readjustment Act of 1944," 72 Stat. 1203, 38 U.S.C. 1801 , as amended, and guaranteed as to payment of principal and interest by the government national mortgage association pursuant to the "Housing and Urban Development Act of 1968," 12 U.S.C. 1721(g) , as amended.

Cite as R.C. § 1161.49

Effective Date: 10-23-1991

1161.50 Loans secured by mortgage on two or more properties.

A savings bank may make loans to members and others evidenced by a note or notes secured by one mortgage on two or more properties in an amount not in excess of the total of their several loanable amounts.

Cite as R.C. § 1161.50

Effective Date: 10-23-1991

1161.51 Canceling loans - debt suspension or cancellation agreement.

(A) Except as provided in division (B) of this section, a savings bank may cancel loans mentioned in sections 1161.36 to 1161.50 of the Revised Code, and release the securities for them on such terms as its board of directors provides.

(B)

(1) Subject to division (B)(2) of this section and any restrictions or requirements established by the superintendent of financial institutions, in connection with any loan or extension of credit, a savings bank may enter into a debt suspension agreement or debt cancellation contract with the borrower or borrowers.

(2) A savings bank shall not offer or finance, directly or indirectly, a debt suspension agreement or debt cancellation contract requiring a lump sum, single payment for the agreement or contract payable at the outset of the agreement or contract, if the debt subject to the agreement or contract is secured by one to four family, residential real property.

(3) For purposes of division (B) of this section, "debt cancellation contract" and "debt suspension agreement" have the same meanings as in 12 C.F.R part 37.

Cite as R.C. § 1161.51

Effective Date: 10-23-1991; 04-06-2007

1161.52 Loans for housing suitable primarily for occupancy for persons over fifty-five.

A savings bank may make, purchase, or participate in loans secured by real estate subject to the procedures of section 1161.38 of the Revised Code and the following limitations:

(A) Loans made under this section shall not exceed five per cent of the savings bank's assets.

(B) The real estate pledged to secure the obligation shall be designed to provide accommodations for occupancy in multiple residential units by persons over fifty-five years of age, or to provide residential care facilities or nursing homes so constructed or altered as to be suitable primarily for occupancy by persons over fifty-five years of age, and limited principally to occupancy by those persons.

(C) The amount loaned shall not be more than ninety per cent of the fair value of the real estate as determined by the appraisal. If a loan that has been made under this section is reduced to an amount that is eighty per cent or less of the appraised value of the real estate, the loan may then be considered having been made under section 1161.36 of the Revised Code, provided the purpose of the loan remains the same.

(D) Loans shall be payable pursuant to division (B)(4) of section 1161.36 of the Revised Code.

Cite as R.C. § 1161.52

Effective Date: 09-29-1995

1161.53 Establishing and maintaining reserve and net worth accounts.

A savings bank shall establish and maintain such reserve and net worth accounts as the superintendent of savings banks shall require by rule, adopted under Chapter 119. of the Revised Code or as may be required by the federal deposit insurance corporation.

Cite as R.C. § 1161.53

Effective Date: 10-23-1991

1161.54 Authorized investments.

(A) A savings bank may invest any of its funds in bonds or interest-bearing obligations of the United States, or for which the faith and credit of the United States are pledged for the payment of principal and interest.

(B) A savings bank may invest any of its funds in the general obligations of any state of the United States, or any political subdivision of a state, provided the obligations, if not of this state or political subdivision of this state, at the time of investment are rated in one of the four highest grades as shown by the most current publication of a nationally recognized investment rating service.

(C) A savings bank may invest its funds in revenue bonds, including those issued by any state, political subdivision of a state, public corporation, or government agency, under such conditions and restrictions as the superintendent of savings banks prescribes by rule, provided that in no event may more than ten per cent of the assets of a savings bank be invested in these bonds and obligations.

(D) A savings bank may invest any of its funds in obligations issued or fully guaranteed as to principal and interest by the agencies and instrumentalities created pursuant to the following acts, as amended:

(1) "Federal Farm Loan Act of 1916," 39 Stat. 360, 12 U.S.C. 641 ;

(2) "Farm Credit Act of 1933," 48 Stat. 257, 12 U.S.C. 131 ;

(3) "Federal Home Loan Bank Act of 1932," 47 Stat. 725, 12 U.S.C. 1421 ;

(4) "Home Owners' Loan Act of 1933," 48 Stat. 128, 12 U.S.C. 1461 ;

(5) "Federal National Mortgage Association," created by the Act of August 1, 1968, 68 Stat. 612, 12 U.S.C. 1717 ;

(6) "Tennessee Valley Authority Act of 1933," 48 Stat. 58, 16 U.S.C. 831 ;

(7) "Export-Import Bank Act of 1945," 59 Stat. 526, 12 U.S.C. 635 ;

(8) "Commodity Credit Corporation Charter Act," 62 Stat. 1070, 15 U.S.C. 714 ;

(9) "Central Bank for Cooperatives," organized pursuant to the Act of June 16, 1933, 48 Stat. 261, 12 U.S.C. 1134f ;

(10) "Government National Mortgage Association," created by the Act of August 1, 1968, 82 Stat. 536, 12 U.S.C. 1716b ;

(11) "Federal Home Loan Mortgage Corporation Act," 84 Stat. 451, 12 U.S.C. 1451 ;

(12) "Federal Financing Bank Act of 1973," 87 Stat. 937, 12 U.S.C. 2281 .

(E) A savings bank may invest in any securities acceptable to the United States to secure government deposits in national banks.

(F) A savings bank may invest in banker's acceptances of a commercial bank whose deposits are insured by the federal deposit insurance corporation and which is not under the control or in the possession of any supervisory authority, provided the remaining periods to maturity are not more than nine months and the total acceptances held by the savings bank in one bank does not exceed one-half of one per cent of the total deposits of the bank as shown by its last published statement of condition preceding the date the acceptances are acquired.

(G) A savings bank may invest in loans of federal funds or similar unsecured loans to an insured bank, savings bank, or savings and loan association whose accounts are federally insured. A loan shall not exceed the greater of one-half of one per cent of the bank's, savings bank's, or savings and loan association's total deposits, as shown by its last published statement of condition, or one hundred thousand dollars, and its term shall not exceed six months.

(H) A savings bank may invest in any obligations or other instruments, or any securities of the student loan marketing association pursuant to the "Home Owners' Loan Act of 1933," 48 Stat. 128, 132 (1933), 12 U.S.C. 1461 , 1464(c) .

(I) A savings bank may invest any of its funds in shares or certificates in any open-end management investment company registered with the securities and exchange commission under the "Investment Company Act of 1940," 54 Stat. 847, 15 U.S.C. 80a-1 , as amended, and while the portfolio of the company is restricted by its investment policy, changeable only by the vote of the shareholders, to investments set forth in divisions (A) to (O) of this section and division (B) of section 1161.62 of the Revised Code.

(J) A savings bank may deposit any of its funds in any financial institution that is subject to inspection by the United States or by any state.

(K) A savings bank may invest in real property, or in interests in real property, and in loans upon obligations secured by real estate located within urban renewal areas as defined in the "Housing Act of 1949," 63 Stat. 413, 42 U.S.C. 1460, and in community urban redevelopment corporations as defined in section 1728.01 of the Revised Code, in addition to other lending authority granted in this chapter, and regardless of the limitation of division (B) of section 1161.37 of the Revised Code. The investments in real property or in interests in real property shall not exceed five per cent of the savings bank's assets, and the sum of the loans authorized by this division shall not exceed twenty per cent of the savings bank's assets.

(L) A savings bank may invest no more than one per cent of its assets in:

(1) Shares of stock issued by the national corporation for housing partnerships or any other corporation created by the "Housing and Urban Development Act of 1968," 82 Stat. 476, 42 U.S.C. 3931 ;

(2) Limited partnership interests in the national housing partnership, or other limited partnerships created under the "Housing and Urban Development Act of 1968," 82 Stat. 549, 42 U.S.C. 3937(a) ;

(3) Any partnership, limited partnership, or joint venture authorized under that act by 42 U.S.C. 3937(c) .

(M)

(1) As used in this division:

(a) "Venture capital firms" means any corporation, partnership, proprietorship, or other entity, the principal business of which is or will be the making of investments in small businesses.

(b) "Small businesses" means any corporation, partnership, proprietorship, or other entity that either does not have more than four hundred employees or would qualify as a small business for the purpose of receiving financial assistance from small business investment companies licensed under the "Small Business Investment Act of 1958," 72 Stat. 689, 15 U.S.C. 661 , as amended, and rules of the small business administration.

(c) "Shares" means any equity interests, including limited partnership interests and other equity interests in which liability is limited to the amount of the investment, but does not include general partnership interests or other interests involving general liability.

(2) A savings bank may invest in shares issued by:

(a) Venture capital firms organized under the laws of the United States or of this state and having an office within this state, provided that, as a condition of a savings bank making an investment in a venture capital firm, the firm agrees to use its best efforts to make investments, in an aggregate amount at least equal to the investment to be made by the savings bank in that venture capital firm, in small businesses having their principal offices within this state and having either more than one-half of their assets within this state or more than one-half of their employees employed within this state.

(b) Small businesses having more than half of their assets or employees within this state.

(3) Investments made under this division shall not exceed in the aggregate five per cent of the savings bank's assets.

(N) A savings bank may invest in shares issued by a domestic insurance company organized under Chapter 3907. or 3925. of the Revised Code, regulated by the superintendent of insurance under Title XXXIX [39] of the Revised Code, and engaged exclusively in the business of reinsuring risks to the extent permitted by and subject to such limitations and restrictions as may be imposed by the superintendent of savings banks by rules adopted under Chapter 119. of the Revised Code. Notwithstanding section 1161.60 of the Revised Code or any other division of this section, the total amount that any savings bank may invest in the common stock, obligations, and other securities of these companies may not exceed ten per cent of the savings bank's assets. Except as otherwise provided in this division, a savings bank may not invest more than ten per cent of its net worth in the common stock, obligations, and other securities of any one domestic insurance company. A savings bank may file an application with the superintendent of savings banks for permission to invest an amount in excess of ten per cent of the savings bank's net worth in the common stock, obligations, and other securities of any one domestic insurance company. Any savings bank making investments pursuant to this division shall report the investments annually on the first day of March to the superintendent of savings banks and the superintendent of insurance. The report shall include, for each reinsurer in which the savings bank has made an investment, information as to the amount of reinsurance written in this state by each line of insurance designated by the superintendent of insurance.

(O) In exercising its investment authority under this section, a savings bank shall give equal consideration to investments that involve minority owned and controlled firms and firms owned and controlled by women either alone or in joint venture with other firms where the investments offer quality return and safety comparable to other investments currently available to the savings bank.

Cite as R.C. § 1161.54

Effective Date: 10-23-1991

1161.55 Federal national mortgage association stock.

A savings bank may subscribe to, buy, own, and hold stock of the federal national mortgage association as required by Title 3, section 303, of the "National Housing Act of 1954," 68 Stat. 590, 12 U.S.C. 1716 , as amended. The stock shall be carried on the books of the savings bank at the cost to the savings bank.

Cite as R.C. § 1161.55

Effective Date: 10-23-1991

1161.56 Community improvement corporations loans.

(A)

(1) A savings bank may invest in the bonds, debentures, notes, or other evidences of indebtedness of community improvement corporations organized under Chapter 1724. of the Revised Code.

(2) A savings bank may subscribe to[,] buy, own, and hold stock and may invest in the bonds, debentures, notes, or other evidences of indebtedness of development corporations organized under Chapter 1726. of the Revised Code.

(B) The aggregate amount of stockholdings, investments, loans, and commitments of any savings bank made pursuant to this section in or to the corporations authorized by Chapters 1724. and 1726. of the Revised Code shall not exceed one per cent of the total outstanding loans made by the savings bank.

(C) In addition to the authority otherwise granted by this chapter, a savings bank may make real estate loans to the corporations organized under Chapters 1724. and 1726. of the Revised Code that would be authorized under the lending powers granted the savings bank under this chapter.

Cite as R.C. § 1161.56

Effective Date: 10-23-1991

1161.57 Other loan and investment authority.

(A) A savings bank may make additional loans and investments under divisions (B) and (C) of this section provided that the aggregate balance of the loans and investments does not exceed three per cent of its total assets, unless the sum of the permanent stock, general reserves, surplus, and undivided profits of the savings bank exceeds six per cent of its total assets. In that case, it may hold additional amounts of these assets, not to exceed in the aggregate one and one-half per cent of its total assets for each percentage point by which the sum of its permanent stock, general reserves, surplus and undivided profits exceeds six per cent of its total assets, but the aggregate of all assets held by any savings bank under the authority of this section shall not exceed ten per cent of its total assets.

(B) A savings bank may make any loan or investment authorized by any other section of this chapter, except in stock of a service corporation organized pursuant to division (D) of section 1161.58 of the Revised Code, notwithstanding that the loan or investment may exceed the asset limitation of that type of loan or investment.

(C) A savings bank may make any of the following loans:

(1) Secured or unsecured loans to its employees and their immediate families not in excess of five thousand dollars;

(2) Interim financing for the purpose of financing construction of modular housing units;

(3) Lines of credit to a builder for the purpose of financing improvements of real property.

(D) In addition to any loans that a savings bank may make under any other section of this chapter, a savings bank may invest:

(1) An amount not exceeding the greater of its surplus, undivided profits, and reserves or six per cent of its assets in loans the principal purpose of which is to provide financing with respect to what is or is expected to become primarily residential real estate where the savings bank relies substantially for repayment on all of the following criteria:

(a) The borrower's general credit standing and forecast of income, with or without other security;

(b) Other assurances of repayment, including but not limited to a third-party guaranty or similar obligation.

(2) An amount not exceeding five per cent of its assets in loans, advances of credit, and interests therein, secured by residential real estate or real estate used or to be used for commercial farming, which are not otherwise authorized under this chapter.

Cite as R.C. § 1161.57

Effective Date: 10-23-1991

1161.58 Loans to and investments in capital stock, obligations, and other securities of service corporations.

(A) For purposes of this section, "service corporation" includes any subsidiary of a service corporation.

(B) A savings bank may invest a total of ten per cent of its assets in the capital stock, obligations, and other securities of service corporations that are organized under the laws of this state to provide services to domestic or foreign savings banks, the capital stock of which is available for purchase only by savings banks.

(C)

(1) If no savings bank holds more than fifty per cent of the capital stock of the corporation, the corporation may provide services compatible with the purposes, powers, and duties of savings banks. The service corporation also may provide mechanical, clerical, and record keeping services for other corporations, other persons, or governmental units subject to the written approval of the superintendent of savings banks.

(2) Notwithstanding the investment limitation of division (C)(1) of this section, a savings bank may make any loan authorized by any other section of this chapter to a service corporation or to a joint venture of the service corporation in which a savings bank has an investment of not more than ten per cent of the service corporation's capital stock. The aggregate of all loans shall not exceed fifty per cent of the savings bank's net worth.

(D)

(1) If one savings bank stockholder holds more than fifty per cent of the corporation's capital stock, the service corporation may provide only such services as the superintendent authorizes by rules adopted in accordance with Chapter 119. of the Revised Code.

(2) Notwithstanding the investment limitation of division (D)(1) of this section, a savings bank may make any loan authorized by any other section of this chapter to a service corporation or to a joint venture of the service corporation in which a savings bank has made an investment pursuant to this division. The aggregate of all loans shall not exceed twenty per cent of the savings bank's net worth.

(3) In the adoption of rules authorized by division (D)(1) of this section, the superintendent may authorize services that he determines to be so related to the business of savings banks as to be a proper incident to a savings bank. In determining whether a particular service is a proper incident to a savings bank, the superintendent shall consider whether its performance by a service corporation can reasonably be expected to produce benefits to the public, including greater convenience, increased competition, or gains in efficiency, that outweigh possible adverse effects, including undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound savings bank practices.

(E) The superintendent, at any time, may examine the affairs of any service corporation in which a savings bank organized under the laws of this state owns stock. Whenever a service corporation or a savings bank fails to meet the requirements and limitations set forth in this section, all loans or investments by a savings bank to or in the service corporation constitute unauthorized investments.

(F) Notwithstanding the investment limitations of this section, a savings bank that meets the requirements of section 1161.53 of the Revised Code may make any loan authorized by any other section of this chapter to a service corporation or to a joint venture of the service corporation, provided that the savings bank has no investment in the service corporation and that no savings bank owns more than ten per cent of the service corporation's capital stock.

Cite as R.C. § 1161.58

Effective Date: 10-23-1991

1161.59 Preneed cemetery merchandise and services contracts.

In accordance with sections 1721.211 and 4717.31 to 4717.38 of the Revised Code, a savings bank may receive and hold on deposit moneys under a preneed funeral contract or a preneed cemetery merchandise and services contract.

Cite as R.C. § 1161.59

Effective Date: 10-20-1999; 2008 SB196 07-06-2009

1161.60 Loans or investments authorized by directors.

(A) In addition to the other loans and investments provided for in this chapter, but subject to all other provisions of the Revised Code, a savings bank may invest up to fifteen per cent of the savings bank's assets in loans or investments authorized by the board of directors of the savings bank.

(B) If a loan or other investment is authorized under more than one section of this chapter, a savings bank may designate under which section the loan or investment has been made. A loan or investment may be apportioned among appropriate categories and may be moved, in whole or in part, from one category to another.

Cite as R.C. § 1161.60

Effective Date: 10-23-1991

1161.601 License required to engage in trust business.

(A) A savings bank authorized to do business by the division of financial institutions pursuant to Chapters 1161. to 1165. of the Revised Code may engage in trust business after obtaining a license under section 1111.06 of the Revised Code.

(B) Except as provided in division (C) of this section, a savings bank that is licensed under section 1111.06 of the Revised Code is a trust company as defined in division (S) of section 1101.01 of the Revised Code for purposes of Chapter 1111. of the Revised Code and of all laws applicable to a trust company.

(C) The division shall supervise any savings bank licensed as a trust company under Chapter 1111. of the Revised Code pursuant to Chapters 1161. to 1165. of the Revised Code, except that the division may apply provisions in Chapter 1111. of the Revised Code in the case of a voluntary or forced liquidation of a savings bank's trust business.

Cite as R.C. § 1161.601

Effective Date: 04-06-2007

1161.61 Additional capital requirements.

The exercise of any of the additional investment authorities pursuant to division (B) of section 1161.34 , division (O) of section 1161.54 , or section 1161.58 or 1161.60 of the Revised Code are subject to any additional capital requirements established by the superintendent of savings banks by rule adopted in accordance with Chapter 119. of the Revised Code or by the federal deposit insurance corporation.

Cite as R.C. § 1161.61

Effective Date: 10-23-1991

1161.62 Federal home loan bank relationships.

(A) A savings bank may become a member of, acquire stock in, and deposit money with a federal home loan bank created by the "Federal Home Loan Bank Act," as amended.

(B) A savings bank may become a member of the federal reserve system under the "Federal Reserve Act of 1913," upon the terms set forth in that act.

(C) Any savings bank exercising the rights and powers granted by division (A) or (B) of this section shall continue to be subject to the supervision and examinations required by the laws of this state. The superintendent of savings banks may disclose to the federal reserve board or to the federal deposit insurance corporation, or to examiners appointed by the board or the corporation, all information concerning the affairs of any bank that has become, or desires to become, a member of a federal reserve bank.

(D) A savings bank may acquire debt or equity securities in, and deposit money with any bank engaged in the business of providing its services to savings banks and banks, including a federal reserve bank.

Cite as R.C. § 1161.62

Effective Date: 10-23-1991

1161.63 Savings and loan converting into savings bank.

(A) A domestic savings and loan association organized under the laws of this state with permanent stock may convert into a savings bank by following the procedures prescribed by divisions (B), (C), and (D) of this section.

(B)

(1) The board of directors shall adopt a resolution fixing the time and place of holding a special meeting of the shareholders and shall cause not less than twenty days' written notice of the time, place, and purpose of the meeting to be given to each shareholder, either personally or by mail directed to him at his last known address appearing upon the records of the corporation.

(2) At the meeting, a resolution to make the conversion shall be adopted. The resolution shall amend the articles of incorporation to provide that the institution shall be organized under Chapter 1161. of the Revised Code as a savings bank, and, if necessary, to change the name of the institution. The amended articles shall contain the provisions required by Chapter 1161. of the Revised Code.

(3) Within one week after the date of the shareholders' meeting, copies of the resolution of the board and of the minutes of the meeting of shareholders, together with a statement showing the giving of notice, all verified by an affidavit of the president or a vice-president and of the secretary or an assistant secretary, shall be filed in the office of the superintendent of savings and loan associations and the office of the superintendent of savings banks, and the amendment to the articles of incorporation shall be delivered to the superintendent of savings banks.

(C) Upon receipt of the documents referred to in division (B)(3) of this section, the superintendent of savings banks shall immediately make such inquiry as is necessary to determine whether all of the following conditions are satisfied:

(1) The articles of incorporation as amended comply with Chapter 1161. of the Revised Code.

(2) The requirements of this section have been met.

(3) The institution upon the filing of the amended articles with the secretary of state will be able to commence operations as a savings bank as defined in section (3)(g) of the "Federal Deposit Insurance Act," 64 Stat. 873 (1950), 12 U.S.C. 1813(g) .

(D) Within sixty days after the receipt of the documents referred to in division (B)(3) of this section, the superintendent of savings banks shall approve or disapprove the amended articles of incorporation. Notwithstanding any other provision of the Revised Code, if the superintendent fails to act within the sixty-day period, the amended articles shall be deemed approved, and the institution shall forward a copy of the amended articles to the secretary of state who shall file the amended articles and furnish a certified copy to the institution and to the superintendent. If the superintendent approves the amended articles, he shall prepare a certificate to this effect and forward the certificate and the amended articles to the secretary of state. Upon receipt of the certificate and amended articles, the secretary of state shall file the amended articles and furnish a copy, certified by him, to the institution. Thereupon, the articles shall be deemed amended.

(E) An amendment to the articles of incorporation described in divisions (B), (C), and (D) of this section shall not require the approval of the superintendent of savings and loan associations.

(F) A domestic savings and loan association organized under the "Home Owners' Loan Act of 1933," 48 Stat. 128, 12 U.S.C. 1461 , as amended, and having permanent stock may convert into a savings bank upon following the procedures of divisions (B), (C), and (D) of this section, except that no documents need be filed with the superintendent of savings and loan associations, and provided that the association complies with the applicable provisions of federal law.

(G) Notwithstanding any other provisions of law or of its articles of incorporation or constitution, a domestic savings and loan association organized under the laws of this state without permanent stock may convert into a savings bank without permanent stock by following all of the procedures prescribed in this division:

(1) The board of directors shall adopt a resolution to amend the articles of incorporation, which shall require approval by a two-thirds vote of the institution's board of directors unless the articles of incorporation provide otherwise by specific reference to division (G) of this section, and require a vote of members or a different vote of directors. The resolution shall amend the articles of incorporation to provide that the institution shall be organized under Chapter 1161. of the Revised Code as a savings bank and, if necessary, to change the name of the institution. The amended articles shall contain the provisions required by Chapter 1161. of the Revised Code.

(2) Within one week after the date of the director's meeting or member's meeting, if required, copies of the resolution of the board of directors or of the members and of the minutes of the director's or member's meeting, together with a statement showing the giving of notice, all verified by an affidavit of the president or a vice-president and of the secretary or assistant secretary, shall be filed in the office of the superintendent of savings and loan associations and in the office of the superintendent of savings banks, and the amendment to the articles of incorporation shall be delivered to the superintendent of savings banks.

(3) Upon receipt of the documents referred to in division (G)(2) of this section, the superintendent of savings banks shall immediately make such inquiry as is necessary to determine whether all of the following conditions are satisfied:

(a) The articles of incorporation comply with Chapter 1161. of the Revised Code.

(b) The requirements of this section have been met.

(c) The institution upon filing the amended articles of incorporation with the secretary of state will be able to commence operations as a savings bank as described in section 3(g) of the "Federal Deposit Insurance Act," 64 stat. 873 (1950), 12 U.S.C. 1813(g) .

(4) Within sixty days after the receipt of the documents referred to in division (G)(2) of this section, the superintendent of savings banks shall approve or disapprove the amended articles of incorporation. Notwithstanding any other provision of the Revised Code, if the superintendent fails to act within the sixty-day period, the amended articles shall be deemed approved, and the institution shall forward a copy of the amended articles to the secretary of state who shall file the amended articles and furnish a certified copy to the institution and to the superintendent. If the superintendent approves the amended articles, he shall prepare a certificate to this effect and forward the certificate and the amended articles to the secretary of state. Upon receipt of the certificate and the amended articles, the secretary of state shall file the amended articles and furnish a copy, certified by him, to the institution. Thereupon, the articles shall be deemed amended.

(5) An amendment to the articles of incorporation described in this division shall not require the approval of the superintendent of savings and loan associations.

(H) A domestic savings and loan association organized under the "Home Owners' Loan Act of 1933," 48 Stat. 128, 12 U.S.C. 1461 , as amended, without permanent stock may convert into a savings bank without permanent stock upon following the procedures of division (G) of this section except that no documents need be filed with the superintendent of savings and loan associations, and provided that the association complies with the applicable provisions of federal law.

Cite as R.C. § 1161.63

Effective Date: 10-23-1991

1161.631 Bank converting into savings bank.

(A) A bank organized under the laws of this state may convert into a savings bank by following the procedures prescribed by divisions (B), (C), and (D) of this section.

(B)

(1) The board of directors shall adopt a resolution fixing the time and place of holding a special meeting of the shareholders and shall cause not less than twenty days' written notice of the time, place, and purpose of the meeting to be given to each shareholder, either personally or by mail directed to him at his last known address appearing upon the records of the corporation.

(2) At the meeting, a resolution to make the conversion shall be adopted. The resolution shall amend the articles of incorporation to provide that the institution shall be organized under Chapter 1161. of the Revised Code as a savings bank, and, if necessary, to change the name of the institution.

(3) Within one week after the date of the shareholders' meeting, copies of the resolution of the board and of the minutes of the meeting of shareholders, together with a statement showing the giving of notice, all verified by an affidavit of the president or a vice-president and the secretary or an assistant secretary or cashier or assistant cashier, shall be filed in the office of the superintendent of banks and the office of the superintendent of savings banks and the amendment to the articles of incorporation shall be delivered to the superintendent of savings banks.

(C) Upon receipt of the documents referred to in division (B)(3) of this section, the superintendent of savings banks shall immediately make such inquiry as is necessary to determine whether all of the following conditions are satisfied:

(1) The articles of incorporation as amended comply with Chapter 1161. of the Revised Code.

(2) The requirements of this section have been met.

(3) The institution upon the filing of the amended articles with the secretary of state will be able to commence operations as a savings bank as defined in section (3)(g) of the "Federal Deposit Insurance Act," 64 Stat. 873 (1950), 12 U.S.C. 1813(g) .

(D) Within sixty days after the receipt of the documents referred to in division (B)(3) of this section, the superintendent of savings banks shall approve or disapprove the amended articles of incorporation. Notwithstanding any other provision of the Revised Code, if the superintendent fails to act within the sixty-day period, the amended articles shall be deemed approved and the institution shall forward a copy of the amended articles to the secretary of state who shall file the amended articles and furnish a certified copy to the institution and to the superintendent. If the superintendent approves the amended articles, he shall prepare a certificate to this effect and forward the certificate and the amended articles to the secretary of state. Upon receipt of the certificate and amended articles, the secretary of state shall file the amended articles and furnish a copy, certified by him, to the institution. Thereupon, the articles shall be deemed amended.

(E) An amendment to the articles of incorporation described in divisions (B), (C), and (D) of this section shall not require the approval of the superintendent of banks.

(F) A national bank that is located in this state may convert itself into a savings bank upon following the procedures of divisions (B), (C), and (D) of this section, except that no documents need be filed with the superintendent of banks, and provided that the national bank complies with the applicable provisions of federal law.

Cite as R.C. § 1161.631

Effective Date: 10-23-1991

1161.64 Buying and selling loans.

(A) A savings bank may buy obligations representing loans that would be legal loans if originated by the savings bank. The investments may be held and reported as other investments of the same type.

(B) A savings bank may sell, with or without recourse, any loan.

Cite as R.C. § 1161.64

Effective Date: 10-23-1991

1161.65 Changing name, capital or stock.

A savings bank may change its name by a majority vote of its board of directors. A savings bank, other than one described in section 1161.11 of the Revised Code, may increase or decrease its authorized capital or the face value of its shares by a majority vote of its board of directors. A certificate of any such action shall be made by the president and the secretary of the savings bank and filed with the secretary of state, after which, in the use of the changed stock or changed name, all rights of all parties shall remain the same as before the change was made.

Cite as R.C. § 1161.65

Effective Date: 10-23-1991

1161.66 Dissolution.

A savings bank may dissolve by a majority vote of the stock entitled to be voted under its constitution. The vote shall be consistent with section 1161.26 of the Revised Code, and the dissolution shall be subject to the contract rights of the savings bank's borrowers and the vested rights of its members.

No savings bank shall dissolve until after it has filed an application to dissolve with the superintendent of savings banks and the superintendent has consented in writing to the dissolution and certified, upon examination of the savings bank, that it is in a safe and sound condition.

Upon receipt of the consent and certificate, the savings bank may file in the office of the secretary of state a certificate signed by the president or vice-president, and by the secretary or an assistant secretary of the savings bank, verified by an oath of the signers stating the name of the corporation; the place where its principal office is located; the names and post-office addresses of its directors and officers, and if any address is in a city, the street and number or other particular description thereof; that it elects to wind up and dissolve; and that the signers have been authorized to execute and file the certificate by a resolution adopted as provided in this section.

Before the certificate is filed, the approval of the superintendent shall be indorsed on it.

After the filing of the certificate, all proceedings relating to the dissolution of the savings bank shall be governed by Chapter 1701. of the Revised Code.

Unclaimed share accounts, deposits, dividends, and other intangible property of a savings bank dissolved under this section that remain in the hands of the liquidators for a period of six months after the certificate of dissolution has been filed in the office of the secretary of state shall be reported as unclaimed funds pursuant to sections 169.03 and 169.05 of the Revised Code, except that division (D) of section 169.03 of the Revised Code does not apply.

Cite as R.C. § 1161.66

Effective Date: 10-23-1991

1161.67 Amending articles and constitution.

(A) A savings bank having permanent stock may amend its articles of incorporation and its constitution by complying with the requirements of its articles and constitution for the amendment thereof.

(B) If the constitution of a savings bank having permanent stock has no provision for amendments to the constitution, the constitution shall be amended in the same manner as its articles of incorporation.

(C) The constitution of a savings bank that has no permanent stock may provide for the amendment of its articles of incorporation and its constitution by providing that the articles of incorporation or constitution may be amended at any meeting of the members for which notice has been properly given in accordance with section 1161.15 of the Revised Code and the amendment is adopted by at least a three-fifths vote of the votes cast in person or by proxy at the meeting. The number of votes that each member may cast shall be determined by the constitution. Regardless of any provisions in its existing constitution for the amendment thereof or the lack of any such provision, a savings bank may adopt such a provision for the amendment of its articles of incorporation and its constitution at any meeting authorized in writing by a majority of its members of record held upon written notice made in accordance with section 1701.41 of the Revised Code stating the proposed action to be taken at the meeting in a form approved by the superintendent of savings banks by a two-thirds vote of the votes cast authorizing the meeting provided that a majority of the members of record is present in person or by proxy at the meeting.

Cite as R.C. § 1161.67

Effective Date: 10-23-1991

1161.68 Conduct and management of affairs.

A savings bank may provide, by a constitution adopted by its members and bylaws adopted by its board of directors, for the proper exercise of the powers granted in this chapter, and for the conduct and management of its affairs.

Proposed amendments to the constitution and bylaws shall be submitted to the superintendent of savings banks for approval on forms prescribed by him. The superintendent shall approve or disapprove the amendments and notify the savings bank of his action within ninety days from the time received by him. If the superintendent disapproves of the amendment, he shall state the reasons therefor in his notice of disapproval.

The savings bank has all other powers necessary and proper to enable the savings bank to carry out the purpose of its organization.

Cite as R.C. § 1161.68

Effective Date: 10-23-1991

1161.69 Borrowers as members with voting rights.

The constitution of a savings bank may provide that all borrowers from the savings bank are members and provide for voting rights for those members at annual or special meetings of shareholders.

Cite as R.C. § 1161.69

Effective Date: 10-23-1991

1161.70 Designating of depositories.

The board of directors of a savings bank shall designate the financial institutions in which it shall deposit the funds of the savings bank. All bank books showing the deposits shall be open to the inspection of any director of the savings bank at any time.

Cite as R.C. § 1161.70

Effective Date: 10-23-1991

1161.71 Blanket fidelity bond coverage.

All officers and employees of a savings bank, before entering upon the discharge of their duties, shall be covered by an individual, schedule, or blanket fidelity bond issued by an insurer authorized by the department of insurance to do business in this state and issued in favor of the savings bank in an amount required by, and with terms and surety approved by, the board of directors of the savings bank.

The superintendent or the board may require an increase in the amount of any such bond. Each bond shall be for the protection of the savings bank against losses resulting from the commission by its bonded officers or employees of any of the acts prohibited by sections 1161.20 , 2913.31 , and 2913.42 of the Revised Code, or of any other dishonest act. The directors as such shall not be required to give bond.

Directors of the savings bank to which bond is given shall not be eligible as bondsmen on the bond, but shall be individually liable for any loss to members of the savings bank caused by the neglect of the directors to carry out the duties imposed upon them by law or by the constitution and bylaws of the savings bank.

Cite as R.C. § 1161.71

Effective Date: 10-23-1991

1161.72 Expenses.

All expenses of a savings bank shall be paid out of its gross earnings only, and so much of these earnings as is necessary shall be set aside each year for this purpose. If the savings bank acquires real estate as a result of default in a mortgage, whether by deed or by foreclosure, amounts paid out by it in court costs and taxes at the time the real estate is acquired may be charged to a reserve fund, and reconditioning costs after the real estate is acquired may be charged either to a reserve fund or to current operating expense, as determined by the board of directors. When any parcel of the real estate is sold by the savings bank, the funds received shall be applied to the payment of sales expense, to the restoration of losses previously charged to the reserve or undivided profit funds, to the reduction of the book value of the real estate, or to current income, as determined by the board. The savings bank may levy a reasonable charge, upon any corporation or person applying for a mortgage loan for which the real estate is given as security, for any services by it in connection with the loan or for extending the period of maturity of the loan or otherwise readjusting or refinancing it and for any other action by the savings bank permitted or required by law with respect to the loans. All charges, except reasonable attorney's fees and charges for legal services and reasonable appraisal fees, shall be made by the savings bank directly and accounted for on its books. A reasonable appraisal fee may be charged by the savings bank, and shall be paid by the borrower to the savings bank prior to or subsequent to the granting of a loan.

Upon the closing of the loan, the savings bank, directly or through its attorney, shall furnish the borrower a loan settlement statement showing in detail all charges and fees the borrower has paid or obligated himself to pay either to the savings bank or to its attorney in connection with the loan, and a copy of the loan settlement statement shall be retained in the records of the savings bank.

Cite as R.C. § 1161.72

Effective Date: 10-23-1991

1161.73 Dividends - interest.

After provision for payment of expenses, interest, and the maintenance of the loss reserve and other net worth accounts as required by section 1161.53 of the Revised Code, a savings bank may declare dividends on accounts and pay interest on deposits. The dividends or interest may be credited to the account or paid to the holder thereof at such times, such rates, and upon such methods of computation as are authorized by a resolution of the board of directors of the savings bank.

If dividends or interest are to be credited or paid at more than one rate, the resolution authorizing the rates shall set forth the criteria for determining the classes of accounts that will receive the various rates. The criteria may include the balance in the account at a specified time or times, the period of time a minimum balance must be maintained, the type of evidence of ownership issued to the owner of the account, and other similar standards or combinations thereof. Each account shall receive dividends or interest at the rate to which it is entitled based upon the criteria set forth in the resolution, except that the board of directors may establish minimum account balances upon which dividends or interest are paid. Any residue of the earnings not credited to reserves and not declared as dividends, may be held as undivided profits and used as other earnings.

Cite as R.C. § 1161.73

Effective Date: 10-23-1991

1161.74 Losses.

All losses of a savings bank shall be met by the application thereto of the following, in the order listed:

(A) The loss reserve and other net worth accounts provided for in section 1161.53 of the Revised Code, in part to one or more of the accounts in such manner and in such amounts as shall be determined by the board of directors;

(B) The capital stock.

Cite as R.C. § 1161.74

Effective Date: 10-23-1991

1161.75 Appraising real estate owned by savings bank.

At least once in every three years the appraisal committee of each savings bank or a qualified appraiser appointed by the board of directors shall appraise all real estate owned by the savings bank and report its findings to the superintendent of savings banks and to the board of directors of the savings bank in the form required by division (F) of section 1161.38 of the Revised Code.

Cite as R.C. § 1161.75

Effective Date: 10-23-1991

1161.76 Acquisitions and mergers.

(A) For purposes of this section:

(1) "Holding company affiliate" means a holding company of which a savings bank is a subsidiary and any other subsidiary of the holding company other than a subsidiary of the savings bank.

(2) "Merger" includes consolidation and the purchase of substantially all the assets and assumption of liabilities of another institution. "Merger" includes the use of an interim savings bank.

(B) A savings bank may acquire or merge with another savings bank, a foreign savings bank, a domestic association, a foreign savings association, a foreign federal association, a state bank, a national bank, or a bank organized under the laws of another state, upon application to and written approval of the superintendent of financial institutions.

(C) The limitations and conditions of Chapter 1701. of the Revised Code do not apply to a merger of a savings bank the outstanding capital of which consists entirely of withdrawable shares or that is organized under section 1161.11 of the Revised Code, provided the plan of merger is approved by a two-thirds vote of the savings bank's board of directors as evidenced by a merger agreement.

(D) The superintendent shall adopt rules in accordance with Chapter 119. of the Revised Code setting forth criteria that shall be met for the merger of a savings bank and a holding company affiliate that is not a savings bank, a bank, or a savings and loan association.

(E) For purposes of this section, if the surviving institution or new institution is a savings bank organized under this chapter, section 1701.82 of the Revised Code governs the merger or consolidation, except that after the merger or consolidation becomes effective, the surviving or new institution shall possess, of a public or private nature, the rights, privileges, immunities, powers, franchises, and authority of a savings bank organized under this chapter.

(F) A savings bank may merge with a holding company affiliate upon application to and written approval of the superintendent. The superintendent shall approve such a merger only if the superintendent is of the opinion that the rights of all interested parties are protected.

Cite as R.C. § 1161.76

Effective Date: 05-21-1997

1161.77 Consolidation.

(A) For purposes of this section, "holding company affiliate" means a holding company of which a savings bank is a subsidiary and any other subsidiary of the holding company other than a subsidiary of the savings bank.

(B) A savings bank may provide in its constitution and bylaws for the time and terms of its dissolution and for its consolidation with other savings banks on terms to be determined upon by its board of directors. In case of the dissolution of a savings bank, its board of directors, by a majority vote of its members, may be authorized to sell and transfer its mortgage securities or other property, or both, to another corporation or person, subject to the vested and accrued rights of the mortgagors.

(C) A savings bank may provide for its consolidation with a holding company affiliate on terms to be determined by its board of directors, provided that the superintendent of savings banks determines that the rights of all interested parties are protected and approves the consolidation. The superintendent shall adopt rules in accordance with Chapter 119. of the Revised Code setting forth criteria that shall be met for a consolidation of a savings bank and a holding company affiliate.

Cite as R.C. § 1161.77

Effective Date: 10-23-1991

1161.78 Acquiring controlling interest.

Except as provided in section 1161.76 of the Revised Code, no person or entity, directly or indirectly, shall acquire a controlling interest in a savings bank without the prior written approval of the superintendent of savings banks and unless the person or entity has met all of the requirements of section 7(j) of the "Federal Deposit Insurance Act," 64 Stat. 876 (1950), 12 U.S.C. 1817 , as amended, relating to the acquisition of a controlling interest in a bank, and any other requirements that may be imposed by the federal deposit insurance corporation. The superintendent shall adopt rules, in accordance with Chapter 119. of the Revised Code, to carry out the purposes of this section, except that prior to adoption of the rules, a person or entity may acquire a controlling interest in a savings bank with the prior approval of the superintendent.

Cite as R.C. § 1161.78

Effective Date: 10-23-1991

1161.79 Deposit authority of foreign savings bank.

(A) As used in this section:

(1) "Acquire" or "acquisition" means any of the following transactions or actions:

(a) The acquisition of the direct or indirect ownership or control of voting shares of an Ohio savings bank holding company or an Ohio savings bank if, after the acquisition, the acquiring savings bank or savings bank holding company will be a controlling person of the savings bank or the savings bank holding company;

(b) The taking of any other action that results in the direct or indirect control of an Ohio savings bank or Ohio savings bank holding company.

(2) "Insured depository institution" has the same meaning as in the "Federal Deposit Insurance Act," 64 Stat. 873 (1950), 12 U.S.C. 1811 , 1813 , as amended.

(3) "Ohio savings bank holding company" means a savings bank holding company that owns or controls one or more savings banks and has its principal place of business in this state.

(4) "Principal place of business" means, as to a savings bank, the state in which its main office is located, and as to a savings bank holding company, the state or jurisdiction in which the total deposits of all direct and indirect insured depository institution subsidiaries of the holding company and any other company that has control of the holding company are the largest, as shown in the most recent report of condition or similar report filed by the insured depository institution subsidiaries with state or federal authorities.

(B) Notwithstanding any other provision of the Revised Code, no savings bank incorporated under the laws of any other state or having its main office or principal place of business in any other state shall solicit, receive, or accept deposits in this state, except as provided in sections 1161.07 , 1161.071 , and 1161.76 of the Revised Code.

(C) A savings bank or savings bank holding company with its main office or principal place of business in another state may charter or otherwise acquire a savings bank or Ohio savings bank holding company.

(D)

(1) Any savings bank or savings bank holding company proposing to charter a savings bank pursuant to the authority granted by this section shall make application pursuant to and be bound by the requirements of this chapter and the rules adopted thereunder.

(2) Any savings bank or savings bank holding company proposing to acquire an Ohio savings bank or Ohio savings bank holding company pursuant to this section shall comply with section 1161.78 of the Revised Code. The application filed pursuant to that section shall consist of a copy of the application filed with the appropriate regulator under federal law, and shall provide the superintendent with evidence that its accounts or the accounts of its insured depository institution subsidiaries are insured by the federal deposit insurance corporation. If no application is required to be filed under federal law, the application shall contain such other information as the superintendent may prescribe, by rule, as necessary or appropriate for the purpose of making a determination under this section and section 1161.78 of the Revised Code. Withdrawal from the federal deposit insurance corporation terminates the authority of the foreign savings bank or savings bank holding company to do business in Ohio. Notwithstanding any other provision of the Revised Code, the acquisition of any Ohio savings bank or Ohio savings bank holding company by a savings bank or savings bank holding company with its main office or principal place of business in another state, which includes a direct or indirect acquisition of a savings bank electing to be treated as a savings association under section 10(l) of the "Home Owners' Loan Act of 1933," 48 Stat. 128, 12 U.S.C.A. 1467a(l) , as amended, shall not be subject to this section, but shall instead be subject to section 1151.71 of the Revised Code as if the savings banks and savings bank holding companies involved were savings and loan associations and savings and loan holding companies.

Cite as R.C. § 1161.79

Effective Date: 05-21-1997

1161.80 Examination associated with acquisition.

(A) When the superintendent of savings banks considers it necessary or appropriate, he may examine any savings bank or savings bank holding company that has acquired or has an application pending to acquire a savings bank or Ohio savings bank holding company pursuant to the authority granted by division (C) of section 1161.79 of the Revised Code. The cost of an examination shall be assessed against and paid by the savings bank or savings bank holding company examined. The assessment for an examination shall be the same as for a special examination under Chapter 1163. of the Revised Code plus documented extraordinary expenses. The superintendent may request the savings bank or savings bank holding company to be examined pursuant to this division to advance the estimated cost of the examination.

(B) The superintendent may enter into cooperative agreements with other state and federal savings bank regulatory authorities to facilitate the examination of any savings bank or savings bank holding company that has acquired or has an application pending to acquire a savings bank or Ohio savings bank holding company pursuant to the authority granted by division (C) of section 1161.79 of the Revised Code. The superintendent may accept reports of examinations and other records from the other authorities in lieu of conducting his own examination of the savings banks or savings bank holding companies. The superintendent may take any action jointly with other regulatory agencies having concurrent jurisdiction over the savings banks or savings bank holding companies or may take action independently in order to carry out his responsibilities under division (C) of section 1161.79 of the Revised Code.

(C) When the superintendent considers it necessary, he may require any savings bank or savings bank holding company that has acquired a savings bank or Ohio savings bank holding company pursuant to the authority granted by division (C) of section 1161.79 of the Revised Code to submit such reports to the superintendent as he determines to be necessary or appropriate for the purpose of carrying out his responsibilities.

(D) Any savings bank or savings bank holding company that has acquired a savings bank or Ohio savings bank holding company pursuant to the authority granted by division (C) of section 1161.79 of the Revised Code is subject to the proceedings brought by the superintendent pursuant to Chapter 1165. of the Revised Code.

(E)

(1) The approval of the superintendent is required for the declaration of dividends on permanent stock if the total of all such dividends declared by any savings bank or Ohio savings bank holding company acquired pursuant to the authority granted by division (C) of section 1161.79 of the Revised Code in any fiscal year exceeds the total of its net profits of that year combined with its retained net profits of the preceding two years, less any required transfers to surplus or a fund for the retirement of any preferred stock.

(2) For purposes of division (E)(1) of this section:

(a) "Net profits" means the remainder of all earnings from current operations plus actual recoveries on loans and investments and other assets, after deducting from the total thereof all current operating expenses, actual losses, accrued dividends on preferred stock, if any, and all federal and state taxes.

(b) "Retained net profits of the preceding two years" means the increase in retained earnings during the immediately preceding two fiscal years after deducting all charges against retained earnings during those two years.

Cite as R.C. § 1161.80

Effective Date: 10-23-1991

1161.81 Penalties.

(A) Whoever violates section 1161.20 of the Revised Code shall be fined not more than one thousand dollars.

(B) Whoever violates section 1161.09 of the Revised Code shall be fined not more than five thousand dollars. Each day of the violation shall constitute a separate offense.

Cite as R.C. § 1161.81

Effective Date: 10-23-1991