Powers of Savings and Loan Associations

HRS div. 2, tit. 22, ch. 412, art. 7, pt. II

in effect

HRS §412:7-200 General powers

412:7-200. General powers (a) Except as expressly prohibited or limited by this chapter, a savings and loan association shall have the power to solicit, accept and hold deposits, engage in other activities which are usual or incidental to the business of a savings and loan association, and shall have all rights, powers and privileges of a corporation organized [under] the laws of this State including but not limited to the power to: (1) Make loans and extensions of credit of any kind, whether unsecured or secured by real or personal property of any kind or description; (2) Borrow money from any source within or without the State; (3) Enter into repurchase agreements; (4) Buy and sell foreign currency; and (5) Make investments as permitted under this article. (b) Except as otherwise expressly authorized by this chapter or by the commissioner under section 412:7-201, a savings and loan association shall not: (1) Employ its funds, directly or indirectly, in trade or commerce, by buying or selling ordinary goods, chattels, wares, and merchandise, except as an incidental operation or when related to another permitted activity, or by owning or operating industrial or manufacturing plants of any kind; (2) Own or control the capital stock of any other corporation after July 1, 1994; (3) Deal in gold bullion, except a savings and loan association may buy and sell gold coins minted by the United States Treasury; or (4) Engage in any business for which a real estate broker's license is required, in any business for which an insurance producer license is required, or in any business of a securities broker or dealer. This prohibition shall not apply to the sale of credit life and other forms of credit related insurance products and shall not affect previous licenses or approvals granted to sell securities or non-credit related forms of insurance. [L 1993, c 350, pt of §1; am L 2003, c 212, §11]

HRS §412:7-201 Powers granted under federal law

412:7-201. Powers granted under federal law (a) In this section "federal power" means any activity, right, privilege, or immunity granted to a federal savings and loan association under any federal statute, rule, regulation, interpretation or court decision. (b) Any savings and loan association desiring to acquire any federal power shall file an application with the commissioner. The application shall indicate the applicable federal statute, rule, regulation, interpretation or court decision, the extent of the federal power desired, the reasons for the application, and any other information requested by the commissioner. The commissioner may by rule prescribe the form of application. (c) If the commissioner is satisfied that the power should be granted, the commissioner shall issue a written approval of the application, subject to such terms and conditions as the commissioner deems appropriate. Other savings and loan associations may file an application if they desire the same federal power, but approval of any application need not be granted. Any federal power granted pursuant to this section is in addition to, and not in limitation of, any other provision of this chapter, and the federal power may be exercised notwithstanding any other provision in this chapter. (d) If any federal power is terminated or modified, the commissioner may terminate or make a similar modification to any corresponding power granted under this section. (e) The commissioner may suspend or revoke any federal power granted under this section or under previous law if the commissioner finds: (1) That the savings and loan association has violated any conditions imposed in connection with the grant of power; or (2) The savings and loan association has not begun to exercise such power within one year of the date it was granted. (f) The commissioner shall retain jurisdiction over the enforcement of any power granted under this section or under previous law. Any action under subsections (d) or (e) shall be taken only after the commissioner has given the savings and loan association notice of the proposed action and an opportunity to be heard. [L 1993, c 350, pt of §1; am L 2016, c 149, §11]

HRS §412:7-202 Membership in federal home loan bank

412:7-202. Membership in federal home loan bank Any savings and loan association may become a member of a federal home loan bank organized under authority of the Federal Home Loan Bank Act, or any successor or similar system of federal home loan banks established by Congress, and may purchase and hold the shares of such federal home loan bank. The savings and loan association may have and exercise all powers not in conflict with the laws of this State incident to such membership; provided, however that notwithstanding such membership the savings and loan association and its directors, officers, and shareholders shall continue to be subject to all liabilities and duties imposed upon them by any law of this State. [L 1993, c 350, pt of §1]

HRS §412:7-203 Service corporations

412:7-203. Service corporations (a) "Service corporation" means a corporation whose stock is owned entirely by one or more state or federally chartered savings and loan associations or savings banks. (b) Subject to the approval of the commissioner, a savings and loan association may form and own a service corporation only if the institution or institutions participating in the formation of the service corporation are in a safe and sound condition, and the amount of stock to be owned by each will not adversely affect their capital or solvency. (c) A savings and loan association may not own or invest in any capital stock, securities, or other interest of a service corporation if, together with its investment in the capital stock, securities, or other interest of any other service corporations, its aggregate outstanding investment in all service corporations will exceed six per cent of the savings and loan association's assets. (d) No service corporation may be formed except upon written approval by the commissioner of an application submitted in a form satisfactory to the commissioner. The approval shall be subject to the written acknowledgment by the applicant that the service corporation shall be subject to: (1) The supervision of the commissioner; (2) Examination pursuant to this section; and (3) Any other terms and conditions as the commissioner deems appropriate. (e) Every service corporation shall permit the commissioner to examine its books, records, and activities from time to time, to the extent and whenever the commissioner deems necessary to determine the propriety of any investment by a savings and loan association in the service corporation and whether the activities of the service corporation pose a significant risk of loss to the parent savings and loan association. The service corporation shall pay the entire cost of the examination. In addition, a service corporation, at its sole expense, shall cause an independent audit to be made of its books, records, and activities if and when deemed necessary by the commissioner. (f) A service corporation may engage in activities permitted for a service corporation of a federally chartered savings and loan association and other activities as the commissioner may approve. (g) A service corporation may engage in permitted activities directly or through one or more subsidiaries or joint ventures. (h) Whenever a service corporation engages in an activity that is not permitted under this section, and because of the activity a savings and loan association's investment in the service corporation would be improper, within ninety days following written notice from the commissioner to the savings and loan association: (1) The improper activity shall be discontinued; or (2) The savings and loan association shall divest itself of its ownership or investment in the service corporation. The service corporation or the savings and loan association may appeal the commissioner's decision and request a hearing in accordance with chapter 91. (i) The savings and loan association shall notify the commissioner in writing within five days of closing a service corporation. The notification shall provide the date of closing, the reasons for the closure, and the means by which the assets and liabilities of the service corporation were disposed. [L 1993, c 350, pt of §1; am L 2006, c 228, §38]

HRS §412:7-204 Operating subsidiaries

412:7-204. Operating subsidiaries (a) "Operating subsidiary" means a corporation other than a corporation referred to in section 412:7-306(g)(2) to (7) of which more than fifty per cent of the voting securities is held by a savings and loan association. (b) An operating subsidiary may engage in activities authorized for a savings and loan association or that are usual or incidental to the business of a savings and loan association. (c) No savings and loan association may acquire, establish, or hold the voting securities of an operating subsidiary without the commissioner's prior written approval; provided that: (1) Approval shall not be required so long as the savings and loan association's aggregate net contributions to the capital of the operating subsidiary remain less than ten per cent of the savings and loan association's capital and surplus; and (2) The savings and loan association shall comply with the notification requirements of subsection (f). Unless otherwise provided by law or rule, all provisions of this chapter applicable to the operations of the parent savings and loan association shall apply to the operations of its operating subsidiary. Unless otherwise provided by law or rule, pertinent accounts of the parent savings and loan association and its operating subsidiaries shall be consolidated for the purpose of applying applicable statutory limitations such as contained in section 412:7-303. (d) The savings and loan association shall file an application with the commissioner in a form approved by the commissioner. The application shall contain the following information concerning the proposed operating subsidiary: (1) The name and date for commencement of operations; (2) The specific location; (3) The activities and nature of business; (4) The ownership, amount, and nature of the investment; and (5) Any other information that the commissioner may require. (e) If after appropriate examination and investigation, the commissioner is satisfied that the acquisition, establishment, or holding the voting securities of the operating subsidiary will comply with this section, the commissioner shall approve the application in writing, with conditions as the commissioner may deem appropriate. (f) The savings and loan association shall notify the commissioner in writing within five days of acquiring or establishing any operating subsidiary or performing new activities in the operating subsidiary. The notification shall provide the information specified in subsection (d). (g) The accounts of each operating subsidiary of a savings and loan association shall be maintained independently of the accounts of all of the savings and loan association's other operating subsidiaries and independently of the accounts of the savings and loan association itself. At least at the end of every quarter of its fiscal year the savings and loan association shall consolidate or recognize its proportionate share of the profit and loss from each operating subsidiary. (h) The savings and loan association shall notify the commissioner in writing within five days of closing an operating subsidiary. The notification shall provide the date of closing, the reasons for the closure, and the means by which the assets and liabilities of the operating subsidiary were disposed. [L 1993, c 350, pt of §1; am L 2006, c 228, §39; am L 2016, c 149, §12]

Source: Hawaii State Legislature (capitol.hawaii.gov), via Internet Archive capturesURL: https://www.capitol.hawaii.gov/hrscurrent/Vol08_Ch0401-0429/HRS0412/HRS_0412-.htmFetched: 11/10/2026