17:12B-155. Procedure for making other loans

155. Other loans may be made as follows:

A. Account loans. Loans secured by a pledge of a member's savings account. No such loan shall exceed the withdrawal value of the pledged account. Interest on such loans shall not be charged at a rate in excess of the maximum permitted under the provisions of R.S.31:1-1 unless a higher rate is required by any applicable federal regulation that establishes minimum rates that must be charged on loans secured by savings accounts; in which event, the interest charged shall not be greater than that specified by such federal regulation.

B. Purchase of loans. An association may purchase any mortgage loan, property repair, alteration, improvement or rehabilitation loan, or any other loan which an association is authorized to make.

C. (Deleted by amendment, P.L.1997, c.33.)

D. (Deleted by amendment, P.L.1997, c.33.)

E. Loans otherwise authorized. An association may make any other loan which it may be authorized to make by any law of this State.

F. (Deleted by amendment, P.L.1997, c.33.)

G. Educational loans. In addition to the authority otherwise granted by law for an association to make loans guaranteed or insured in whole or in part by the United States of America or the State of New Jersey, or any instrumentality or agency of either of them, or for which a commitment to so guarantee or insure has been made, an association may make any loans so guaranteed or insured or for which a commitment to so guarantee or insure has been made where such loans are made for the purposes of financing the expenses of higher education. Such loans may be made in accordance with the terms and conditions permitted by the guaranteeing or insuring authority, notwithstanding any other provisions of law limiting interest or other charges or prescribing other terms and conditions.

H. (Deleted by amendment, P.L.1997, c.33.)

I. Secondary mortgage loans. Secondary mortgage loans made pursuant to section 26 of P.L.1997, c.33 (C.17:12B-145.1) shall be repayable in installments under the same terms and conditions as provided for secondary mortgage loan licensees under the "Secondary Mortgage Loan Act," P.L.1970, c.205 (C.17:11A-34 et seq.) only with respect to maximum annual percentage rate of interest. The Commissioner of Banking and Insurance shall have the power, in relation to a "secondary mortgage loan," to adopt, amend, alter or rescind regulations, the requirements of which, in the commissioner's judgment, are necessary for the implementation of this subsection.

J. Mobile homes. An association may invest in mobile or manufactured home chattel paper by making or by buying loans or installment sales contracts on mobile or manufactured homes.

K. Consumer loans.

(1) An association may invest in or make installment loans upon the same terms and conditions prescribed for banks in accordance with Article 12 of the "Banking Act of 1948," P.L.1948, c.67 (C.17:9A-53 et seq.), subject to the limitation established in subsection M. of this section.

(2) In addition, subject to the limitation established in subsection M. of this section, an association may invest in or make secured or unsecured loans for personal, family, or household purposes to the extent and under the conditions permitted by the rules and regulations adopted by the commissioner from time to time. The rate of interest on such loans shall not be in excess of the rate of interest provided for in section 160 of P.L.1963, c.144 (C.17:12B-160) or in excess of any rate of interest for such loans as may be otherwise authorized by law. The commissioner shall promulgate such rules and regulations in substantial conformity with similar rules and regulations of the Federal Home Loan Bank Board.

L. Advance loans. An association may make advance loans upon the same terms and conditions prescribed for banks in accordance with "The Advance Loan Law of 1968," P.L.1959, c.91 (C.17:9A-59.1 et seq.).

M. Limitations on loans and investments. Loans or investments in the following subsections shall not exceed, in the aggregate for each subsection, 20% of the assets of the association, provided that the commissioner may, by regulation, establish an amount in excess of 20% for each subsection if such excess amount is in conformity with federal law or rule or regulation of the Federal Home Loan Bank Board:

(1) (Deleted by amendment, P.L.1997, c.33.)

(2) Secured or unsecured loans for personal, family, or household purposes, and commercial paper and corporate debt securities; provided, however, that no percentage of assets limitation shall apply to the issuance of credit cards or the extension of credit therewith, the investment in property improvement loans as defined in section 158 of P.L.1963, c.144 (C.17:12B-158), or the investment in advance loans as defined in subsection L. of this section.

L.1963,c.144,s.155; amended 1967, c.231, s.2; 1968, c.22; 1968, c.155; 1969, c.231, s.3; 1974, c.145, s.2; 1975, c.313, s.1; 1981, c.74, s.2; 1981, c.101, s.12; 1997, c.33, s.28.