                                 CODE OF VIRGINIA

GENERAL INVESTMENT AUTHORITY OF STATE SAVINGS INSTITUTIONS (§ 6.2-1186)

A. Subject to the powers and limitations regarding real estate loans set forth
in § 6.2-1179, and except as provided in § 6.2-1187 with respect to state
savings banks, the assets of a state savings institution may be invested only:

   1. In real and personal property necessary for the conduct of its business and
   in real estate to be held for its future accommodation. A savings institution
   may invest in an office building or buildings and appurtenances for the
   transaction of its business, or for the transaction of such business and for
   rental. Except as provided in &#xA7; 6.2-1187 with respect to savings banks,
   no such investment described in the preceding sentence may be made without the
   prior approval of the Commissioner if the total amount of the investment
   exceeds 50 percent of capital stock paid-in and unimpaired and 50 percent of
   unimpaired combined surplus and undivided profits, or, in the case of a mutual
   association, 50 percent of general reserve and surplus;

   2. In stock and other securities or obligations of a service corporation.
   Unless specifically authorized by the Commissioner, a state savings
   institution shall not invest more than 10 percent, in the aggregate, of its
   assets in the investments specified in this subdivision. A service corporation
   may charge and collect such finance charges, fees and interest rates as state
   savings institutions are authorized to charge and collect. A service
   corporation, directly or indirectly, may engage in providing real estate
   brokerage services for property owned by a state savings institution owning
   capital stock in the service corporation, by the service corporation, or a
   joint venture in which the service corporation is a participant, but no
   service corporation, state savings institution or holding company that has
   control, as defined in &#xA7; 6.2-701, over a state savings institution may
   engage directly or indirectly in providing real estate brokerage services for
   property owned by third parties. Nothing in this subdivision shall prohibit
   (i) a state savings bank or its affiliates or (ii) a holding company that has
   control over a state savings institution from engaging in third party real
   estate brokerage in any state, other than the Commonwealth, that permits such
   activities by its state chartered savings institutions, or their affiliates or
   holding companies;

   3. If the savings institution is a state association, in the purchase of real
   estate for the purpose of producing income or for inventory and sale or for
   improvement including the erection of buildings thereon, for sale or rental
   purposes, and such an association may hold, sell, lease, operate or otherwise
   exercise the rights of an owner of any such property. Unless specifically
   authorized by the Commissioner, a state association shall not invest more than
   10 percent, in the aggregate, of its assets in the investments specified in
   this subdivision;

   4. In obligations that are fully guaranteed as to principal and interest by
   the United States or the Commonwealth;

   5. In stock or obligations of any Federal Home Loan Bank or Federal Reserve
   Bank;

   6. In obligations of, or issued by, any other state or political subdivision
   thereof, so long as such obligations continue to hold one of the four highest
   national investment grade ratings;

   7. In obligations of, or issued by, any locality, district, or other political
   subdivision of the Commonwealth, or any public instrumentality or public
   authority created by act of the General Assembly, so long as such obligations
   continue to hold one of the four highest national investment grade ratings;

   8. If the savings institution is a state association, in deposits in banks for
   savings and loan associations;

   9. In stock, obligations or other instruments of the Federal National Mortgage
   Association, Government National Mortgage Association, Federal Home Loan
   Mortgage Corporation, or any successor thereto;

   10. In obligations of, or guaranteed as to principal and interest by, Canada
   or any province thereof, provided that the principal and interest of any such
   obligations are payable in United States funds;

   11. In demand, time, or savings deposits, shares or accounts, or other
   obligations of any financial institution the accounts of which are insured by
   a federal agency or other insurer approved by the Commissioner;

   12. In bankers&#8217; acceptances that are eligible for purchase by Federal
   Reserve Banks;

   13. In loans to individuals for personal, family or household purposes and
   loans reasonably incident thereto, including loans to dealers in consumer
   goods for purposes of financing inventory and floor planning. Such loans may
   be evidenced by installment consumer paper that is transferred to a savings
   institution by an endorser or guarantor, provided that such paper shall carry
   a full or limited endorsement or guarantee of the person transferring the same
   and the savings institution shall have a certificate of a responsible officer
   designated by its board for that purpose stating that the responsibility of
   the maker of such obligation has been evaluated and the savings institution is
   relying primarily upon such maker for the payment of such obligation;

   14. Loans secured by savings accounts of the association;

   15. In unsecured single payment personal loans to individuals with a term of
   not more than 12 months;

   16. In personal property, which term as used herein shall include fixtures,
   acquired upon the specific request of and for lease to a customer, subject to
   the following limitations:
   				a. The rentals receivable by the association under the initial lease of
   any item of personal property shall at least equal the cost to the savings
   institution of such item of personal property;
   				b. The savings institution shall have a certificate of a responsible
   officer designated by its board for that purpose stating that the
   responsibility of the lessee has been evaluated and approved by such officer;
   and
   				c. Upon the expiration of any lease, whether by virtue of the lease
   agreement or by virtue of the retaking of possession by the association, such
   personal property shall be relet, sold or otherwise disposed of, or charged
   off within one year from the time of expiration of such lease;

   17. In secured or unsecured credit to cover payment of checks, drafts or other
   fund transfer orders in excess of the available balance of an account on which
   they are drawn. Such extensions of credit must be paid off within 30 days
   after the extension of credit is made. The 30-day limitation on repayment
   shall apply only to inadvertent overdrafts by the account owner, and shall not
   apply to extensions of credit, agreed upon in writing, whereby the borrower is
   permitted to access the line of credit by check, draft or other fund transfer
   order;

   18. In loans for commercial, corporate, business or agricultural purposes.
   Unless specifically authorized by the Commissioner, (i) a state association
   shall not invest more than 10 percent of its assets, and (ii) a state savings
   bank shall not invest more than 20 percent of its assets, in loans for
   commercial, corporate, business or agricultural purposes. The
   percentage-of-assets limitations in the preceding sentence shall not apply to
   overdraft loans, commercial real estate loans, loans to a service corporation
   the stock of which is owned by the savings institution, or loans to dealers in
   consumer goods for inventory or floor planning financing;

   19. In commercial paper rated in the highest or second highest categories as
   of the date of purchase, as shown by the most recently published rating by at
   least two nationally recognized investment rating services;

   20. In corporate debt securities, including corporate debt securities
   convertible into stock, that may be sold with reasonable promptness at a price
   that corresponds reasonably to their fair market value, and that are rated in
   at least the third highest category by a nationally recognized investment
   rating service in its most recently published ratings before the date of
   purchase of the security;

   21. In shares in open-end management investment companies; and

   22. Any other obligations, instruments or investments that are specifically
   approved by the Commissioner.

B. In addition to the items authorized by subsection A, a state savings
institution may:

   1. Issue credit cards, extend credit in connection therewith, and otherwise
   engage in or participate in credit card operations; and

   2. Issue commercial and standby letters of credit in conformance with the
   Uniform Commercial Code (&#xA7; 8.1A-101 et seq.) or the Uniform Customs and
   Practice for Documentary Credits published as International Chamber of
   Commerce publication No. 600, and may pledge collateral to secure its
   obligations thereunder, subject to the following requirements:
   				a. Each letter of credit shall conspicuously state that it is a letter of
   credit;
   				b. The issuer&#8217;s undertaking shall contain a specified expiration
   date or be for a definite term, and shall be limited in amount;
   				c. The issuer&#8217;s obligation to pay shall 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; and
   				d. The account party shall have an unqualified obligation to reimburse the
   issuer for payments made under the letter of credit.

C. The Commission may adopt such regulations as may be required to prevent
excessive aggregate amounts of lending by an association to any one individual
or entity.

HISTORY: Code 1950, § 6-201.29; 1960, c. 402; 1962, c. 170; 1964, c. 151; 1966,
c. 584, § 6.1-157; 1968, c. 255; 1970, c. 237; 1972, c. 796, § 6.1-195.34;
1974, c. 284; 1975, c. 448; 1976, cc. 263, 487; 1977, c. 140; 1978, c. 351;
1979, c. 81; 1980, c. 706; 1981, c. 59; 1982, c. 209; 1983, c. 447; 1985, c.
425, § 6.1-194.69; 1986, c. 509; 1988, c. 4; 1989, cc. 28, 396, 626; 1990, c.
3; 1991, c. 230, § 6.1-194.136; 1992, c. 51; 1994, c. 330; 2003, c. 353; 2010,
c. 794.