TITLE 54 LOAN ASSOCIATIONS AND LENDING INSTITUTIONS ... · 725. Consumer Finance; Title and Payday Loans 726. Pawnbrokers Chapter 722 2007 EDITION Savings Associations GENERAL PROVISIONS

TITLE 54

LOAN ASSOCIATIONS AND LENDINGINSTITUTIONS

Chapter 722. Savings Associations723. Credit Unions725. Consumer Finance; Title and Payday Loans726. Pawnbrokers

Chapter 722

2007 EDITION

Savings Associations

GENERAL PROVISIONS722.004 Definitions722.008 Purposes; standards for exercise of regu-

latory powers

FORMATION, ORGANIZATION,VOLUNTARY CORPORATE CHANGES

(Formation and Organization of Association)

722.012 Authorization to transact business re-quired; exceptions

722.014 Name of savings association722.016 Incorporation; application of Oregon

Business Corporation Act722.018 Articles of incorporation722.022 Application for incorporation722.024 Investigation of application; notice of ap-

plication filing; hearing; authority to re-quire additional information;fingerprinting

722.026 Grounds for approval or denial of applica-tion for certificate of incorporation; or-ganization

722.028 Denial of application; right to hearing ondenial

722.032 Function of initial board; surety bond orletter of credit; subscriptions to capital;savings account pledges; completed or-ganization report; time to organize limited

722.034 Surety bond or letter of credit conditions;designation of escrow agent

722.036 Issuance or denial of certificate of au-thority; conditions of certificate

722.038 Amending articles or bylaws; copies to befurnished to association members

722.042 Minimum capital or expense fund andpledged savings accounts

722.044 Restrictions on use of capital surplus orexpense fund; repayment of expense fund;nonwithdrawable savings accounts of newassociations

722.046 Time allowed to secure insurance of ac-counts and commence business

722.048 Insurers of accounts; representations asto insurance

722.052 Revocation of certificate of authority;dissolution

(Voluntary Corporate Changes)722.056 Conversion from domestic association to

federal or foreign association or Oregonsavings bank; conditions; effective date

722.058 Conversion of federal or foreign mutualassociation or savings bank to domesticmutual association; conversion of stockassociation or Oregon stock savings bankto domestic stock association

722.062 Conversion of federal or foreign mutualassociation or savings bank to domesticstock association; conversion of stock as-sociation to domestic mutual association;conditions

722.064 Rules and supervision standards in con-versions

722.066 Approval of conversion by members722.068 Effect of conversion722.072 Merger; consolidation; exchange; sale of

assets722.074 Voluntary dissolution

CORPORATE ADMINISTRATION

(Directors; Officers; Members; Borrowers)722.102 Directors′ responsibility; designation, du-

ties of managing officer and represen-tative; service of process on nonresidentdirector; fee

722.104 Operating and employment contracts

Title 54 Page 1 (2007 Edition)

LOAN ASSOCIATIONS AND LENDING INSTITUTIONS

722.106 Bonds and insurance coverage; notice ofcancellation; exception

722.107 Fund in lieu of bonds and insurance cov-erage; rules

722.108 Fiduciary relationship of directors, offi-cers and employees; conflict of interest;liability for violation

722.112 Indemnification or reimbursement of di-rector, officer, employee or agent

722.113 Indemnification fund for officers and di-rectors; rules

722.114 Membership in association; voting; mem-bership records

722.116 Member′s right to examine books and re-cords; enforcement; attorney fees

722.118 Account holder′s and borrower′s right toinspect accounts; member′s right to com-municate with members; enforcement;attorney fees

722.122 Applicability of ORS 722.116 and 722.118 tofederal associations

722.124 Notice of cease and desist orders in an-nual meeting notice

(Stock; Dividends and Earnings; General Reserve and Net Worth Accounts)

722.132 Payment for stock issued by a stock as-sociation

722.134 Sale or transfer of stock; when approvalis required

722.136 Ascertainment of earnings; payment ofexpenses

722.138 Conditions for payment of dividends, dis-tribution of earned surplus; holdingearned surplus

722.142 General reserve account for losses andnet worth requirements; rules

(Miscellaneous)722.152 Membership fees prohibited722.154 Publication of financial statements722.156 Records722.162 Conduct of business on holidays; emer-

gency closing722.164 Sharing of information on customers by

savings associations and related com-panies

GENERAL POWERS722.202 General powers of associations722.204 Associations may be granted powers of

federal associations; rules722.206 Power of association to borrow; limita-

tions, exceptions and preferences722.208 Capital notes and debentures722.212 Trust business powers722.214 Acting as trustee or custodian under Em-

ployee Retirement Income Security Actof 1974

SAVINGS OPERATIONS722.252 Account holders as creditors of associ-

ation722.254 Savings accounts722.256 Withdrawal from savings accounts; rules722.257 Time period for drawing on item deposited

in savings or federal association; disclo-sure

722.258 Payment of accounts of minors and per-sons under disability

722.262 Payment of savings account or demanddeposit account on death of holder; affi-davit requirements

722.264 Savings accounts as legal investments andas security

722.266 Savings accounts as security for loans722.268 Service charge on dormant accounts

INVESTMENT OPERATIONS(Investment Powers)

722.302 Minimum liquid assets; rules722.304 Permitted investments; limitations722.306 “Prudent person” investment rule722.308 Investment in service corporations; ser-

vices performed for association to be sub-ject to regulation and examination bydirector; rules

722.309 Service corporations undertaking publicprojects; authority to invest and organize;conditions; corporate form; functions

722.311 Proposal to invest in or organize servicecorporation for public projects; approvalby director

722.312 Real property investments; limit on prop-erty, improvements and furnishings forassociation′s business offices

722.314 Real property acquired by foreclosure;valuation

(Loans)722.322 Real estate loans722.324 Appraisal of property prior to loan722.326 Real estate loans in excess of 95 percent

of appraised value; reserve for paymentof loss

722.328 Loans to account holders722.332 Loans secured by life insurance policies;

education loans722.334 Secured and unsecured loans related to

real property; advance of credit for man-ufactured dwelling financing or homeconstruction; loans to certain subsidiaries

722.336 Personal loans722.338 Loans to officer or employee to purchase

association stock722.342 Loans to directors, officers and persons

related to them; conditions; exemptions;rules

(General Provisions)722.352 Participation, insured or guaranteed loans722.354 Maximum loans to one person or on one

property; interest722.356 Types of investments and loans limited;

effect of unauthorized loan or investment;liability of officers

SUPERVISION AND ENFORCEMENT(Supervision)

722.408 Rules722.416 Publication of statutes, rules and opinions722.419 Public inspection of records of department

pertaining to this chapter; exemptions722.432 Communications from director; notices

generally


SAVINGS ASSOCIATIONS

722.434 Financial statements and audits722.436 Examinations by director; report; exam-

ination program with federal regulators;acceptance of federal or other state ex-aminations

722.438 Extended audit, examination or revalu-ation; payment of costs

722.442 Right of access to books and records ofassociation; authority to issue subpoenas,administer oaths and examine witnesses

722.444 Appraisal of association property by di-rector

722.446 Authority to establish branch facility; ap-proval of director required to change lo-cation of branch or principal office;applicability of ORS 722.448 and 722.452

722.448 Application for approval to establishbranch or change location of branch; no-tice and hearing

722.452 Approval of branch application; right tohearing if approval denied; list of branchfacilities

722.454 Discontinuance of branch; revocation ofapproval by director

722.456 Director to be notified of certain illegalacts

722.457 Giving false document, statement or re-port prohibited

722.458 Records of extensions of credit by domes-tic associations; rules

722.459 Investigation of new director, presidentand managing officer; fingerprinting; dis-approval of election or appointment

(Enforcement)722.462 Enforcement generally; authority to re-

quire specific reserves722.464 Cease and desist orders722.468 Removal of association officer or em-

ployee

(Conservatorship)722.474 Appointment of conservator; duties; com-

pensation

722.476 Powers of conservator722.478 Acquiring possession of contents of safety

deposit vaults, safes and boxes722.482 Contest of conservatorship appointment

by association officers722.484 Correction of alleged wrongdoings by un-

impaired association

FOREIGN ASSOCIATIONS722.502 Certificate of authority required to trans-

act business in Oregon722.504 Application for certificate of authority;

payment of filing fee722.506 Issuance of certificate to foreign associ-

ation722.508 Law applicable to contracts722.512 Applicability of Business Corporation Act722.514 Prohibition against operation of certain

foreign associations; exception; prohibi-tion against savings and loan business byentity based in foreign country

722.516 Revocation of certificate of authority

FEES AND CHARGES722.602 Filing fees; charges for examinations722.606 Annual fees paid by savings associations

MISCELLANEOUS722.652 Effect of laws on existing associations722.654 Reserve fund associations redesignated

stock associations722.656 Certain outstanding shares, share ac-

counts and investment certificates con-sidered savings accounts

722.658 Limitation on personal liability for goodfaith acts or omissions

722.660 Procedures for opening safe deposit boxafter death of person who was sole lesseeor last surviving lessee of box

PENALTIES722.991 Civil penalties


LOAN ASSOCIATIONS AND LENDING INSTITUTIONS


SAVINGS ASSOCIATIONS 722.004

GENERAL PROVISIONS722.002 [1975 c.582 §2; repealed by 2007 c.71 §233]

722.004 Definitions. As used in thischapter, unless the context otherwise re-quires:

(1) “Account holder” means a person whoowns a savings account.

(2) “Borrower” means a person who is anobligor under a loan agreement entered intoby a savings association as obligee.

(3) “Branch facility” or “branch” meansan established place of business or a mobileor other facility of an association, other thanthe principal office, at which any savings andloan business activity is carried on.

(4) “Community” means a centralizedarea or locality in which a body of inhabit-ants is gathered in one group having com-mon residential, social or business interests.The term does not necessarily mean a city,county or other political subdivision andneed not but may be limited by lines andboundaries, and a large, populous area underone or more forms of government may becomposed of several communities.

(5) “Demand deposit” means a deposit inan account that is payable on demand uponthe presentation of a negotiable check ordraft.

(6) “Department” means the Departmentof Consumer and Business Services.

(7) “Depositor” means a person who de-posits money in a savings account in an as-sociation.

(8) “Director” means the Director of theDepartment of Consumer and Business Ser-vices.

(9) “Domestic association” means a cor-poration that transacts savings and loanbusiness under articles of incorporation is-sued by this state.

(10) “Federal association” means a cor-poration that transacts savings and loanbusiness in this state under authority to doso issued under federal law.

(11) “Foreign association” means a cor-poration, other than a federal association,organized to transact savings and loan busi-ness under the laws of any other state orterritory of the United States.

(12) “Independent auditor” means a pub-lic accountant or a certified public account-ant authorized to practice as a publicaccountant or as a certified public account-ant under the laws of this state, or a firm ofsuch accountants.

(13) “Managing officer” means an officerof a savings association designated by theboard of directors of the association as pro-vided by ORS 722.102.

(14)(a) “Member,” in a mutual associ-ation, means an account holder and anyother person who is a member of a class ofpersons granted membership rights by thearticles of incorporation or the bylaws.

(b) “Member,” in a stock association,means a stockholder and any other personwho is a member of a class of personsgranted membership rights by the articles ofincorporation or the bylaws.

(15) “Mutual association” means asavings association formed without authorityto issue stock.

(16) “Principal office” means the officeof the headquarters of a savings associationin this state.

(17) “Savings account” means the inter-est of an account holder in the savings li-ability of a savings association.

(18) “Savings association” or“association” means a domestic associationor a foreign association and includes a stockor a mutual association.

(19) “Savings Association Act” meansthis chapter.

(20) “Savings bank” has the meaninggiven that term by ORS 706.008, except asotherwise provided in ORS 722.014 relatingto name.

(21) “Savings liability” means the totalamount on deposit in all savings accounts ofa savings association plus interest earned onsuch accounts.

(22) “Service corporation” means a cor-poration:

(a) That is engaged, or proposes to en-gage, in a business activity related to savingsand loan business; and

(b) In which at least 80 percent of theshares of stock having voting rights areowned by one or more saving associations orfederal associations.

(23) “Stock association” means a savingsassociation formed with authority to issuestock.

(24) “Stockholder” means a person whoappears on the records of a savings associ-ation as the owner of one or more shares ofstock of the association.

(25) “To transact savings and loan busi-ness” means to engage in business activitiesto promote savings and home building andownership, to acquire funds of the public toinvest in loans and to make repayments tosavers as provided in savings plans.

(26) “Withdrawal value” means theamount of a savings account, less lawful de-ductions. [1975 c.582 §§3 to 31; 1981 c.472 §1; 1985 c.374§1; 1985 c.762 §53; 1985 c.798 §3; 1987 c.373 §56; 1993 c.744§24; 1997 c.631 §528; 2007 c.71 §234]


722.008 LOAN ASSOCIATIONS AND LENDING INSTITUTIONS

722.005 [Amended by 1961 c.398 §1; 1967 c.234 §1;1971 c.757 §3; repealed by 1975 c.582 §152]

722.008 Purposes; standards for exer-cise of regulatory powers. (1) The Legisla-tive Assembly adopts the Savings AssociationAct:

(a) To provide for the safe and soundconduct of the business of savings associ-ations, the conservation of their assets andthe maintenance of public confidence insavings associations;

(b) To provide for the protection of theinterests of account holders and the publicinterest in the soundness of the savings andloan system;

(c) To provide the opportunity for savingsassociations subject to the Act:

(A) To remain competitive with eachother and with savings and financial insti-tutions existing under other laws of this andother states, the United States and foreigncountries; and

(B) To serve effectively the convenienceand advantage of customers and to improveand expand their services and facilities forsuch purposes;

(d) To provide the opportunity for man-agements of associations to exercise businessjudgment in conducting the affairs of associ-ations to the extent compatible with thepurposes recited in this subsection; and

(e) To provide adequate rulemakingpower and administrative discretion so thatthe regulation and supervision of associ-ations is readily responsive to changes ineconomic conditions and in savings and loanpractices.

(2) The purposes of the Savings Associ-ation Act stated in subsection (1) of thissection constitute standards to be observedby the Director of the Department of Con-sumer and Business Services in the exerciseof discretionary powers under the Act, in theadoption of rules, in the examination andsupervision of associations subject to the Actand in all matters of construction and appli-cation of the Act required for any determi-nation or action by the director. [1975 c.582 §32;1985 c.762 §54]

722.010 [Amended by 1961 c.398 §2; 1963 c.288 §1;repealed by 1975 c.582 §152]

FORMATION, ORGANIZATION,VOLUNTARY CORPORATE CHANGES

(Formation and Organization of Association)

722.012 Authorization to transactbusiness required; exceptions. (1) A personshall not transact savings and loan businessin this state unless the person has been is-sued a certificate of authority as provided by

this chapter or is authorized to do so by ar-ticles of incorporation granted prior to June6, 1931. Unless a person is so authorized andactually engaged in savings and loan busi-ness in this state, a person transacting busi-ness in this state shall not:

(a) Transact business under a name ortitle that contains the term “savings andloan,” “building and loan,” “thrift and loan”or words of similar import; or

(b) Use any sign, or circulate or use anyletterhead, billhead, circular or paper what-soever, or advertise in any manner that iscalculated to lead the public to believe thatit is transacting savings and loan business.

(2) Subsection (1) of this section does notapply to a federal association. [1975 c.582 §33]

722.014 Name of savings association.(1) The name of a domestic association, orthe name authorized and used by a foreignassociation doing business in this state, shallterminate with the words “Savings Associ-ation,” “Savings and Loan Association” or“Savings Bank.” The name “Savings Bank”may be so used notwithstanding any otherprovision of Oregon law limiting or prohibit-ing the use of the name “Savings Bank” or“Bank.” A domestic or foreign associationmay not use the word “bank” to refer to it-self or to any services it provides unless“bank” is modified by “savings.”

(2) In addition to the requirements ofORS 57.045 (4)(a) (1985 Replacement Part),the name of a savings association shall notso resemble the name of another savings as-sociation or an existing federal associationdoing business in this state or a bank as de-fined in ORS 706.008 as to be likely to causeconfusion or mistake, or to deceive. Thissubsection applies only to:

(a) A domestic association formed afterJanuary 1, 1976.

(b) A foreign association issued a certif-icate of authority after January 1, 1976. [1975c.582 §34; 1985 c.374 §2; 1985 c.728 §106; 1987 c.197 §11;1997 c.631 §529]

722.015 [Amended by 1971 c.743 §414; repealed by1975 c.582 §152]

722.016 Incorporation; application ofOregon Business Corporation Act. (1) Adomestic association shall be incorporated,either as a stock or a mutual association.

(2) ORS chapter 57 (1985 ReplacementPart) applies to domestic associations and toforeign associations except where inconsist-ent with the express provisions of this chap-ter and, where inconsistent, this chapterapplies.

(3) The following provisions of ORSchapter 57 (1985 Replacement Part) do notapply to savings associations, as follows:



(a) ORS 57.025, 57.045 (1), 57.080, 57.085,57.106, 57.221, 57.226, 57.231 (1)(d), 57.246 (2)to (4), 57.255, 57.260, 57.590, 57.595 (1)(a) and(b), 57.735 and 57.755 to 57.772 do not applyto savings associations.

(b) In addition to the sections referred toin paragraph (a) of this subsection, ORS57.080 to 57.111, 57.121 to 57.137, 57.216,57.390 to 57.411 and 57.870 to 57.890 do notapply to mutual associations.

(4) In applying ORS chapter 57 (1985 Re-placement Part) and provisions of ORS chap-ter 60, as provided by this section, unless thecontext requires otherwise:

(a) “Corporation Division,” “division” or“office of Secretary of State” means the De-partment of Consumer and Business Services.

(b) “Corporation Commissioner,” “com-missioner” or “Secretary of State” means theDirector of the Department of Consumer andBusiness Services.

(c) “Corporation” or “domestic corpo-ration” means a domestic association.

(d) “Shareholder” means an accountholder of a mutual association, a stockholderof a stock association and includes accountholders and borrowers of a stock associationif designated as members of the associationin the articles and bylaws of the association.

(e) Any reference in ORS chapter 57(1985 Replacement Part) to filing fees, annuallicense fees and other money payable by cor-porations to the commissioner shall be con-sidered a reference to the provisions of thischapter governing filing fees, annual fees andother money payable by associations to thedirector.

(f) Written notice of meetings to stock-holders of a stock association shall be deliv-ered and the books of the association may beclosed not less than 10 nor more than 60days before the date of the meeting in themanner prescribed in ORS 57.150 and 57.155(1985 Replacement Part).

(5) ORS 60.131 and 60.134 apply to stocksavings associations.

(6) ORS 60.047 (2)(d) and 60.387 to 60.414apply to savings associations.

(7) Notwithstanding ORS 57.355, articlesof incorporation of a savings association maybe amended to set forth and apply the pro-visions of ORS 60.047 (2)(d). [1975 c.582 §35; 1979c.863 §1; 1981 c.472 §2; 1981 c.633 §78; 1983 c.717 §40; 1983c.740 §252; 1985 c.728 §107; 1985 c.762 §55; 1987 c.197 §12;1987 c.414 §166b; 1987 c.528 §4; 1991 c.883 §13]

722.018 Articles of incorporation. Anyindividuals desiring to transact savings andloan business may, by complying with thischapter, become a body corporate for thatpurpose. The articles of incorporation for asavings association shall state:

(1) That the association is organized forthe purpose of transacting savings and loanbusiness.

(2) Whether the association is organizedas a stock association or a mutual associ-ation and, if as a mutual association, statewho has membership rights and the relativerights of different classes of members of theassociation. [1975 c.582 §36]

722.020 [Amended by 1953 c.401 §11; 1961 c.398 §3;1971 c.743 §415; 1971 c.757 §4; repealed by 1975 c.582 §152]

722.022 Application for incorporation.When incorporators of a domestic associationdeliver articles of incorporation to the Di-rector of the Department of Consumer andBusiness Services, they shall submit an ap-plication for a certificate of incorporation,signed and verified by a majority of theincorporators, together with the proper filingfee. The application shall set forth:

(1) The names and addresses of theincorporators and proposed directors and of-ficers of the association.

(2) A statement of the character, finan-cial responsibility, experience and fitness ofthe directors and officers to engage in thesavings and loan business.

(3) Statements of estimated receipts, ex-penditures, earnings and financial conditionof the association for the first two years orsuch longer period as the director may re-quire.

(4) A showing that the association willhave a reasonable chance to succeed in thecommunity in which it proposes to operate.

(5) A showing that the public conven-ience and advantage will be promoted by theformation of the proposed association.

(6) Proposed bylaws.(7) Any other matters the director may

require. [1975 c.582 §37]

722.024 Investigation of application;notice of application filing; hearing; au-thority to require additional information;fingerprinting. (1) Upon receipt of an appli-cation and the documents described by ORS722.022, the Director of the Department ofConsumer and Business Services shallpromptly examine and investigate whetherthe formation of the association should beallowed and the application granted.

(2) Not less than 20 days prior to takingaction on an application for a certificate ofincorporation, the director shall give noticeof the filing of the application as provided bysubsection (3) of this section. The noticeshall state:

(a) That the application has been filedand name the community where the principaloffice is to be located; and



(b) That either a hearing will be held onthe application at a time, date and placegiven in the notice, or that a hearing will beheld if any person objects on relevantgrounds to the granting of the applicationand files a request for a hearing with the di-rector prior to a date given in the notice.

(3) Notice shall be given:(a) By publishing the notice one time in

a newspaper, designated by the director, ofgeneral circulation in the community inwhich the principal office of the proposedassociation is to be located;

(b) By mailing copies to all domestic,foreign and federal associations transactingbusiness in this state; and

(c) By mailing copies of the notice topersons who have requested notice pursuantto ORS 183.335 (8).

(4) If a hearing is held because of a re-quest, notice of the hearing shall be given asprovided by subsection (3) of this section andshall name the time, date and place of thehearing. At any hearing any person may ap-pear in person or by agent or attorney andorally or in writing show cause upon anyrelevant ground why the application shouldor should not be granted.

(5) In the course of investigating anyperson named as incorporators and proposeddirectors and officers in the articles of in-corporation under ORS 722.022, the directormay require the person to provide additionalinformation for the director′s further inquiry.For the purpose of such further inquiry, thedirector may require the person to submit tofingerprinting.

(6) Fingerprints acquired under subsec-tion (5) of this section may be submitted toappropriate law enforcement agencies, in-cluding the Federal Bureau of Investigation,for the purpose of discovering any unlawfulactivities of the person. [1975 c.582 §38; 1977 c.161§5; 1979 c.593 §33; 1979 c.863 §1a; subsections (5) and (6)enacted as 1985 c.786 §56; 2001 c.220 §6]


722.026 Grounds for approval or denialof application for certificate of incorpo-ration; organization. (1) The Director ofthe Department of Consumer and BusinessServices shall approve an application for acertificate of incorporation if the director af-firmatively finds from the data furnishedwith the application, from the evidenceadduced at the public hearing, if any, andfrom the investigation and records of the di-rector, including a review of criminal re-cords, that:

(a) The articles of incorporation and pro-posed bylaws comply with the law and the

other provisions of this chapter have beencomplied with;

(b) The character, financial responsibil-ity, experience and fitness of eachincorporator, each member of the proposedboard of directors and any person or personsdirectly or indirectly controlling the pro-posed association commands confidence andwarrants belief that the business of the pro-posed association will be honestly and effi-ciently conducted in accordance with theintent and purpose of this chapter and thatthe proposed association will have qualifiedfull-time management;

(c) The community stated in the applica-tion as the location of the principal office ofthe proposed association affords a reasonablepromise of adequate support for the associ-ation;

(d) The operation of the proposed associ-ation will not unduly harm any existing as-sociation that has been transacting businessin the community for less than two years;and

(e) The public convenience and advantagewill be promoted.

(2) Upon approval of an application, thedirector shall issue a certificate of incorpo-ration with such conditions and restrictionsas are required by this chapter. After issu-ance of the certificate of incorporation, how-ever, the association shall not do anybusiness, except such business as is incidentto its organization, until the director has is-sued to it a certificate of authority as pro-vided by ORS 722.036. [1975 c.582 §39; 1977 c.166§1]

722.028 Denial of application; right tohearing on denial. If the Director of theDepartment of Consumer and Business Ser-vices denies an application for a certificateof incorporation the director shall enter anorder to that effect, setting out the facts thatare the basis of the denial, and mail the or-der, with a copy of the proposed articles ofincorporation, to the incorporators or theirrepresentatives. The order shall also notifythe incorporators of their right to a hearingon the order. [1975 c.582 §40]


722.032 Function of initial board;surety bond or letter of credit; sub-scriptions to capital; savings accountpledges; completed organization report;time to organize limited. (1) After the or-ganizational meeting, the initial board of di-rectors of an association shall:

(a) File with the Director of the Depart-ment of Consumer and Business Services acorporate surety bond or letter of credit, in



the form and amount required by ORS722.034;

(b) Collect subscriptions to capital or theexpense fund in the amounts required underORS 722.042, but only after the surety bondrequired by paragraph (a) of this subsectionhas been filed with the director;

(c) Obtain subscriptions to savings ac-counts pledged, in the amount required underORS 722.042, to be paid in to the associationupon issuance to it of a certificate of au-thority;

(d) Take such other action as may benecessary to complete the organization of theassociation; and

(e) Report the completion of the organ-ization to the director.

(2) The report shall be filed with the di-rector within six months after the date thecertificate of incorporation is issued. How-ever, the director, upon good cause shownprior to the expiration of the six-month pe-riod, may extend the time for filing the re-port for an additional period not to exceedsix months. [1975 c.582 §41; 1991 c.331 §121]

722.034 Surety bond or letter of creditconditions; designation of escrow agent.(1) Any corporate surety bond or letter ofcredit filed with the Director of the Depart-ment of Consumer and Business Services asprovided by ORS 722.032 shall be executed tothe State of Oregon and shall be in a formand amount, not less than $100,000, approvedby the director. The bond or letter of creditshall assure the safekeeping of the fundssubscribed and collected and their delivery,plus earnings, to the association after theassociation has met all conditions and re-quirements of organization and doing busi-ness in this state, and has commenced publicoperation. In case the certificate of authorityis not issued, or is revoked pursuant to ORS722.052 (2), the bond or letter of credit shallassure the return, to the respective subscrib-ers or their assigns, of the amounts collected,plus earnings, less organizational expensesincurred and within the amount authorized.ORS 742.358 applies to cancellation of sucha bond or letter of credit. Any letter of creditfiled with the director under this sectionshall be an irrevocable letter of credit issuedby an insured institution, as defined in ORS706.008.

(2) Actual organizational expenses of thekind described by ORS 57.116 (1985 Replace-ment Part) may be paid as incurred from thefunds collected under ORS 722.042. However,such payments in the aggregate shall not ex-ceed an amount authorized by the directoras reasonable for organizational expenses.

(3) The initial board of directors of anassociation shall, subject to the approval ofthe director, designate an escrow agent forthe safekeeping and delivery of funds in ac-cordance with this section. [1975 c.582 §42; 1981c.472 §3; 1987 c.197 §13; 1991 c.331 §122; 1997 c.631 §530]


722.036 Issuance or denial of certif-icate of authority; conditions of certif-icate. (1) When the report of the board ofdirectors is filed with the Director of theDepartment of Consumer and Business Ser-vices as provided by ORS 722.032, the direc-tor shall examine the affairs of theassociation. The director shall issue a certif-icate of authority to the association author-izing it to commence business if:

(a) The director finds the association hascomplied with all the provisions of law re-quired to entitle it to transact business;

(b) The director finds no intervening cir-cumstance has occurred to change the find-ings of the director made under ORS 722.026;

(c) The director approves the bylawsadopted by the initial board of directors; and

(d) The association pays the proper an-nual fee for the remainder of the fiscal year.

(2) A certificate when issued continues ineffect unless revoked by the director. A cer-tificate of authority shall be issued condi-tional upon the association securinginsurance of its savings accounts and com-mencing business within the time allowed byORS 722.046.

(3) If the director does not issue a certif-icate of authority to an association, the di-rector shall enter an order denying thecertificate, stating the reasons for the denial,and mail the order to the board of directors.The order shall also notify the board of itsright to a hearing on the order. [1975 c.582 §43]

722.038 Amending articles or bylaws;copies to be furnished to associationmembers. (1) A domestic association may,after securing the approval of the Directorof the Department of Consumer and BusinessServices, amend its articles of incorporationor its bylaws.

(2) When a domestic or foreign savingsassociation amends its articles or bylaws, itshall file a verified copy of the resolutionauthorizing such amendment in the office ofthe director.

(3) Copies of the articles of incorporationand bylaws of a savings association shall befurnished by the association to the membersof the association upon request. [1975 c.582 §44;1977 c.166 §2]




722.042 Minimum capital or expensefund and pledged savings accounts. (1)When the Director of the Department ofConsumer and Business Services issues acertificate of incorporation for a new associ-ation, the director shall include in the cer-tificate, as conditions that must be met priorto the issuance of a certificate of authorityto do business, requirements that in theopinion of the director will justify the initialsuccessful operation of the association. Re-quirements in the certificate of a new asso-ciation shall include, but need not be limitedto:

(a) The minimum amount of stated capi-tal and capital surplus that must be sub-scribed and paid in to a new stockassociation; or

(b) The minimum expense fund that mustbe paid in to a new mutual association; and

(c) The minimum number and value ofsavings accounts that must be subscribed andpledged to a mutual or stock associationupon issuance to it of a certificate of au-thority.

(2) All payments required by this sectionshall be in lawful money of the UnitedStates. [1975 c.582 §45]

722.044 Restrictions on use of capitalsurplus or expense fund; repayment ofexpense fund; nonwithdrawable savingsaccounts of new associations. (1) Until anew stock association is on a profitable op-erating basis as determined by the Directorof the Department of Consumer and BusinessServices, capital surplus collected by the as-sociation under ORS 722.042 shall be re-stricted and may be used only for paymentof the expenses and charges of organization,as described by ORS 57.116 (1985 Replace-ment Part), and for payment of any net op-erating losses of the association, asdetermined after transfers to general re-serves for losses.

(2) Until a new mutual association is ona profitable operating basis as determined bythe director, the expense fund collected bythe association under ORS 722.042 shall beused only for payment of the expenses andcharges of organization, similar to those de-scribed by ORS 57.116 (1985 ReplacementPart), and for payment of any net operatinglosses of the association as determined aftertransfers to general reserves for losses.When the director determines that the asso-ciation is on a profitable operating basis,contributions made to the expense fund maybe repaid pro rata to the contributors, firstfrom the balance, if any, remaining in theexpense fund and then from earned surplus.

(3) In case of the liquidation of a mutualassociation before contributions to the ex-

pense fund have been repaid, any balance inthe expense fund remaining unexpended afterthe payment of expenses of liquidation, allcreditors and the withdrawal value of allsavings accounts shall be repaid to the con-tributors pro rata.

(4) Amounts paid in on savings accountspledged to a new mutual association pursu-ant to ORS 722.042 shall not be withdrawableuntil the director, pursuant to subsection (2)of this section, determines that the associ-ation is on a profitable operating basis. [1975c.582 §46; 1987 c.197 §14]


722.046 Time allowed to secure insur-ance of accounts and commence business.(1) A new association shall secure insuranceof its savings accounts as provided by ORS722.048 and commence business within sixmonths after the date the certificate of au-thority to do business is issued.

(2) If the association does not secure in-surance and commence business within thetime allowed, on application of the associ-ation prior to the expiration of the time andupon good cause shown, the Director of theDepartment of Consumer and Business Ser-vices may extend the time for an additionalperiod not to exceed six months. [1975 c.582 §47]

722.048 Insurers of accounts; repres-entations as to insurance. (1) A savingsassociation shall obtain and maintain insur-ance of its savings accounts from the FederalDeposit Insurance Corporation or other fed-eral or state agency, or from another insurerapproved by the Director of the Departmentof Consumer and Business Services.

(2) Upon receiving an application froman association for approval of an insurer, thedirector shall give reasonable notice to theinsurer and the applicant and conduct apublic hearing on the application. The direc-tor may issue a certificate approving an in-surer if the director determines that thecontract of insurance contemplated:

(a) Is written upon substantially the samebasis as to form, amount, coverage, maturity,voluntary and involuntary termination andother provisions as the insurance contractprovided by the Federal Deposit InsuranceCorporation;

(b) Complies with any further require-ments for protection of account holders thatthe director considers reasonably necessary;and

(c) Is underwritten by an insurer who hasa net worth reasonably commensurate withthe risks underwritten and is authorized totransact insurance in this state.



(3) Subsection (2) of this section appliesto all revisions or modifications of such con-tracts of insurance.

(4) Insured associations may make re-presentations as to insurance of savings ac-counts but all representations shall set forththe name of the insurer. An association orother person shall not advertise, represent,accept or offer to accept any savings ac-counts in this state, unless the accounts areinsured as provided by this section. [1975 c.582§48; 1999 c.107 §13]

722.050 [Repealed by 1975 c.582 §152]

722.052 Revocation of certificate ofauthority; dissolution. (1) The Director ofthe Department of Consumer and BusinessServices may revoke the certificate of au-thority of a domestic or a foreign associationfor violation of the provisions of this chapter.

(2) The director may revoke the certif-icate of authority of a new domestic associ-ation and may dissolve the association whenthe association fails to obtain insurance ofaccounts and commence business within thetime allowed by ORS 722.046.

(3) The director may dissolve a domesticassociation:

(a) When the report of the initial boardof directors is not filed within the time al-lowed by ORS 722.032.

(b) After the effective date of an orderissued under ORS 722.036 denying a certif-icate of authority.

(4) The director shall dissolve an associ-ation as provided by ORS 57.585 (1985 Re-placement Part). The director, prior to thedissolution, may appoint a conservator asprovided by ORS 722.474 if the director findsthat liquidation of the affairs of the associ-ation should precede the dissolution of theassociation. [1975 c.582 §49; 1981 c.633 §79; 1983 c.717§34; 1985 c.728 §105; 1987 c.197 §15]


(Voluntary Corporate Changes)722.056 Conversion from domestic as-

sociation to federal or foreign associationor Oregon savings bank; conditions; ef-fective date. (1) A domestic stock or mutualassociation may convert to a federal associ-ation whose principal office is in this stateor to a foreign mutual or stock associationor to an Oregon savings bank, as defined inORS 706.008, upon an equitable basis subjectto:

(a) The prior approval of the conversionby the Director of the Department of Con-sumer and Business Services;

(b) The approval of the state or federalsupervisory authority having jurisdiction of

the proposed resulting association or bank;and

(c) The approval of the members of theconverting association at a meeting properlycalled to consider such action.

(2) When conversion to an Oregonsavings bank, as defined in ORS 706.008, isproposed, the conversion is subject to therules adopted under ORS 706.790 to carry outthis section.

(3) Upon receipt of the approval of aproposed conversion from the director andother appropriate supervisory authority, aconverting association, under the supervisionof the authority, may carry out the plan ofconversion. A record of all acts or pro-ceedings taken in carrying out the proposedconversion shall be filed with the director.

(4) The effective date of a conversion un-der this section is governed by the law, ifany, governing the resulting association orbank. If there is no law governing the effec-tive date, conversion proposed under thissection is effective upon the date that allprovisions of this chapter and the rulesadopted pursuant thereto have been compliedwith and a new charter or certificate of in-corporation has been issued to the resultingassociation or savings bank. A certified copyof the new charter or certificate of incorpo-ration shall be filed with the director. [1975c.582 §50; 1985 c.762 §56; 1987 c.373 §57; 1987 c.445 §11;1997 c.631 §531]

722.058 Conversion of federal or for-eign mutual association or savings bankto domestic mutual association; conver-sion of stock association or Oregon stocksavings bank to domestic stock associ-ation. (1) A federal mutual associationwhose principal office is in this state, a for-eign mutual association or a savings bankmay convert to a domestic mutual associ-ation and a federal stock association whoseprincipal office is in this state, a foreignstock association or an Oregon stock savingsbank, as defined in ORS 706.008, may convertto a domestic stock association upon an eq-uitable basis subject to:

(a) The laws and regulations governingthe converting association or bank;

(b) The approval of the Director of theDepartment of Consumer and Business Ser-vices;

(c) The approval of the members of theconverting association or bank; and

(d) The rules adopted by the director tocarry out the provisions of ORS 722.056 to722.068.

(2) Upon receipt of the approval of aproposed conversion from the director, aconverting association or bank may, underthe supervision of the director, carry out the



plan of conversion. A record of all acts orproceedings taken by the board of directorsof the converting association or bank in car-rying out the proposed conversion shall befiled with the director.

(3) Notice of a meeting of the membersto approve a conversion under this sectionshall be given as provided by ORS 722.066 (2)and (3), unless otherwise provided by the lawapplicable to the converting association orbank. At a meeting at which a conversionunder this section is voted upon, the mem-bers shall also vote upon the directors whoshall be the directors of the domestic associ-ation after conversion takes effect. The di-rector shall, in the certificate ofincorporation issued to the resulting associ-ation, include a statement that the associ-ation is incorporated by conversion from afederal or foreign association or Oregonsavings bank, as the case may be.

(4) A conversion carried out under thissection is effective on the date that all pro-visions of this chapter and the regulationsadopted pursuant thereto have been compliedwith and a new certificate of incorporationhas been issued by the director.

(5) All provisions regarding property andother rights contained in ORS 722.068 apply,in reverse order, to the conversion into adomestic association under this section, sothat the resulting domestic association shallbe a continuation of the converting associ-ation or bank and continue to have all of itsrights, liabilities, obligations and relations.[1975 c.582 §51; 1987 c.445 §12; 1997 c.631 §532]

722.060 [Amended by 1973 c.368 §1; repealed by 1975c.582 §152]

722.062 Conversion of federal or for-eign mutual association or savings bankto domestic stock association; conversionof stock association to domestic mutualassociation; conditions. (1) A federal mu-tual association whose principal office is inthis state or a foreign or domestic mutualassociation or savings bank may convert toa domestic stock association and a federalstock association whose principal office is inthis state or a foreign or domestic stock as-sociation may convert to a domestic mutualassociation upon an equitable basis subjectto:

(a) The laws and regulations governingthe converting association or savings bank;

(b) The approval of the Director of theDepartment of Consumer and Business Ser-vices;

(c) The approval of the members of theconverting association or bank; and

(d) The rules adopted pursuant to ORS722.064.

(2) ORS 722.058 (2) to (5) apply to a con-version under this section. [1975 c.582 §52]

722.064 Rules and supervision stan-dards in conversions. In adopting rules orissuing orders to carry out ORS 722.056 to722.068, and especially when adopting rulesor supervising conversions proposed underORS 722.062, the Director of the Departmentof Consumer and Business Services shall as-sure that:

(1) Accurate and adequate disclosure ofthe terms and effects of plans of conversionare provided to purchasers of capital stock inresulting associations, including accountholders of converting mutual associationsand savings banks;

(2) Adjustments are made in plans ofconversion to be effected by way of mergeror holding company acquisition necessary orappropriate to accomplish the purpose of thissection;

(3) Plans of conversion and proxy state-ments, offering circulars and related instru-ments and actions implementing such plansare subject to review and approval by theappropriate supervisory authorities;

(4) The capital stock issued as a part ofconversion is fairly and independently valuedand priced;

(5) Such capital stock is allocated anddistributed fairly and without manipulativeor deceptive devices being employed;

(6) Appropriate provision is made regard-ing fractional share interests and minimumcapital stock purchase requirements; and

(7) Plans of conversion are adopted andimplemented in a form and manner so thatstability and continuity of management areencouraged and so that the stability, safetyand soundness of savings associations andother financial institutions are not impaired.[1975 c.582 §53]


722.066 Approval of conversion bymembers. (1) A conversion proposed underORS 722.056 to 722.068 by a domestic associ-ation or Oregon savings bank as defined inORS 706.008 shall, after approval by the su-pervisory authority having jurisdiction of theconverting association or savings bank, besubmitted to the members at an annualmeeting or at a special meeting called toconsider such action. The conversion musthave the approval of the number of votes re-quired by ORS 57.511 (1985 ReplacementPart) to approve a sale of assets.

(2) Notice shall be given of any meetingat which a conversion is to be considered.The notice shall:



(a) Expressly state that a proposed con-version will be submitted for approval ordisapproval;

(b) Include a full and accurate de-scription of the plan of conversion and allother matters to be brought before the meet-ing;

(c) State that a proxy for the meetinggiven previously is revocable; and

(d) State the time, date and place of themeeting.

(3) The notice shall be given at least 20days prior to the date of the meeting to eachvoting member of the converting associationor Oregon savings bank, the Director of theDepartment of Consumer and Business Ser-vices and the other appropriate supervisoryauthority.

(4) A foreign or federal association or anOregon savings bank proposing a conversionunder ORS 722.056 to 722.068 shall complywith the applicable provisions of the law andregulations governing such association orbank regarding approval by the supervisoryauthority and the members of the associationor bank. [1975 c.582 §54; 1987 c.197 §16; 1987 c.445 §13;1997 c.631 §533]

722.068 Effect of conversion. (1) Uponthe effective date of the conversion of a do-mestic association to a federal or foreign as-sociation or an Oregon savings bank, asdefined in ORS 706.008, the converting do-mestic association shall cease to be a do-mestic association incorporated under thelaws of this state. However, it is expresslydeclared that the resulting association orsavings bank shall be merely a continuationof the converting domestic association undera new name and new jurisdiction and suchrevision of its corporate structure as may beconsidered necessary for its proper operationunder such new jurisdiction. All property ofthe converted association, including itsrights, titles and interests in and to allproperty of whatever kind, whether real,personal or mixed; and things in action, andevery right, privilege, interest and asset ofany conceivable value or benefit then exist-ing or pertaining to it, or which would inureto it, shall immediately by operation of lawand without any conveyance or transfer andwithout any further act or deed remain andbe vested in and continue and be the prop-erty of the resulting association or bank. Allthe liabilities and obligations of the convert-ing domestic association shall continue asvalid and subsisting liabilities and obli-gations of the resulting association or bank.The resulting association or bank on the ef-fective date of the conversion shall continueto have and succeed to all the rights, liabil-ities, obligations and relations of the con-verting association. A creditor of a domestic

association shall not by reason of such con-version alone be deprived of or prejudicedwith respect to any claim which the creditormay have against the converting domesticassociation.

(2) All pending actions and other judicialproceedings to which the converting domes-tic association is a party shall not abate ordiscontinue by reason of such conversion,but may be prosecuted to order or judgmentin the same manner as if such conversionhad not been made and such resulting asso-ciation or bank may continue such action inits corporate name. Any order or judgmentmay be rendered for or against it whichmight have been rendered for or against theconverting domestic association theretoforeinvolved in such judicial proceedings. [1975c.582 §55; 1987 c.445 §14; 1997 c.631 §534; 2003 c.576 §552]


722.072 Merger; consolidation; ex-change; sale of assets. (1) A domestic asso-ciation may merge or consolidate with,participate in an exchange with or sell itsassets, including one or more of its branchfacilities, to:

(a) One or more domestic associations;(b) One or more foreign associations;(c) One or more federal associations; or(d) One or more Oregon savings banks.(2) A merger, consolidation, exchange or

sale under this section shall be carried outpursuant to a plan adopted by the board ofdirectors and approved by the Director of theDepartment of Consumer and Business Ser-vices as:

(a) Equitable to the members of the as-sociation;

(b) Not impairing the usefulness andsuccess of other properly conducted associ-ations; and

(c) Promoting the public convenience andadvantage.

(3) The provisions of ORS 57.455 to57.500, 57.506 and 57.511, (1985 ReplacementPart), applicable to a merger, consolidationor exchange of shares with, or sale of assetsto, a foreign corporation also apply to amerger, consolidation or exchange with, or asale to, a federal association.

(4) Notwithstanding ORS chapter 57(1985 Replacement Part), stockholders of thesurviving corporation in a merger acquisitionneed not authorize and approve the plan if:

(a) The association′s charter is notchanged; and

(b) Any stock issued or delivered underthe plan, plus those initially issuable uponconversion of any securities to be issued or



delivered under the plan, does not exceed 15percent of the total shares of voting stock ofthe association outstanding immediatelyprior to the effective date of the merger oracquisition. [1975 c.582 §56; 1979 c.863 §2; 1981 c.472§4; 1983 c.717 §35; 1985 c.798 §4; 1987 c.197 §17; 1987 c.445§15; 1997 c.631 §535]

722.074 Voluntary dissolution. (1) Aconsent to dissolve or a resolution to dis-solve shall not be effective as provided byORS 57.546 (1985 Replacement Part) unlessthe plan for distribution of the assets of theassociation is approved by the Director ofthe Department of Consumer and BusinessServices as equitable to the members.

(2) An association during liquidationshall continue to be subject to the super-vision of the director. The board of directorsof the association shall report the progressof the liquidation to the director from timeto time as the director may require.

(3) The director may take over and con-duct the liquidation as provided by this sec-tion and ORS 722.474 and 722.476 when thedirector considers it to be in the interest ofthe account holders, creditors, stockholdersand other members of the association.

(4) Upon completion of a liquidation bythe board of directors, the board shall file afinal report and accounting of the liquidationwith the director. [1975 c.582 §57; 1987 c.197 §18]

CORPORATE ADMINISTRATION(Directors; Officers; Members;

Borrowers)722.102 Directors′ responsibility; des-

ignation, duties of managing officer andrepresentative; service of process onnonresident director; fee. (1) The board ofdirectors of a savings association shall beresponsible for the business policies of theassociation and for the enforcement of suchpolicies by the managing officer.

(2) The board of each savings associationshall designate a person to serve as themanaging officer. The managing officer shallbe the person responsible to the board of di-rectors for the operation of the association.The board shall also designate a represen-tative for the managing officer who may actfor the managing officer during the tempo-rary absence or inability of such officer toact. For the purposes of this section, themanaging officer of a foreign associationshall be a person in this state who is re-sponsible to the board of directors of the as-sociation for the operations of theassociation in this state.

(3) The board of directors of each associ-ation shall inform the Director of the De-partment of Consumer and Business Servicesof the name of the managing officer and the

managing officer′s representative upon thedesignation, or any change in the desig-nation, of such a person. A board may com-ply with this subsection by mailing thedirector a verified copy of the minutes of theboard meeting at which the managing officeror the managing officer′s representative isdesignated.

(4) Each director of a domestic associ-ation who is not a resident of this stateshall, by service as a director, appoint thedirector as agent for service of process inany proceeding connected with the director′selection or service as a director. Subsections(5) to (7) of this section apply to service ofprocess as authorized by this subsection.

(5) Service shall be made on the directorby:

(a) Service on the director or on a clerkon duty in the Department of Consumer andBusiness Services, of a copy of the process,notice or demand, with any papers requiredby law to be delivered in connection with theservice, and a $2 fee;

(b) Transmittal by the person institutingthe proceedings of notice of the service onthe director and a copy of the process, noticeor demand and accompanying papers to thesavings association being served by certifiedor registered mail:

(A) At the last-registered office of thesavings association as shown by the recordsof the director; and

(B) At such address, the use of which theperson initiating the proceedings knows or,on the basis of reasonable inquiry, has rea-son to believe is most likely to result in ac-tual notice; and

(c) Filing with the appropriate court orother body, as part of the return of service,of the return receipt of mailing and an affi-davit of the person initiating the proceedingsthat this section has been complied with.

(6) The director shall keep a record of allprocesses, notices and demands served underthis section.

(7) Nothing contained in this sectionshall limit or affect the right to serve anyprocess, notice or demand required or per-mitted by law to be served upon a savingsassociation in any other manner now orhereafter permitted by law, or enlarge thepurposes for which service on the director ispermitted where such purposes are limitedby other provisions of law. [1975 c.582 §58; 1983c.717 §36; 1985 c.762 §57]

722.104 Operating and employmentcontracts. A savings association may make,transfer, extend or renew operating and em-ployment contracts. A contract under thissection shall be subject to rules, if any, of



the Director of the Department of Consumerand Business Services adopted to carry outthe purposes of this chapter. An employmentcontract with an officer or employee of anassociation shall provide that upon dischargeof the officer or employee pursuant to ORS722.468, the contract and all obligations ofthe association under the contract terminate;but discharge shall not affect any vestedrights of the parties to such a contract. [1975c.582 §59; 1981 c.472 §5]


722.106 Bonds and insurance coverage;notice of cancellation; exception. (1) Ex-cept as provided in ORS 722.107, everysavings association shall obtain and maintainfidelity and other bonds and insurance cov-erage, with one or more insurers authorizedto do business in this state, of the kinds andin the form and amounts required by therules of the Director of the Department ofConsumer and Business Services to protectthe association, its account holders and othercustomers, and the public.

(2) Every required bond and insurancepolicy shall provide that a cancellationthereof, either by the insurer or the insured,shall not become effective until at least 30days after notice that it is to be canceled ismailed to the director. [1975 c.582 §60; 1987 c.285§3]

722.107 Fund in lieu of bonds and in-surance coverage; rules. NotwithstandingORS 722.106, the Director of the Departmentof Consumer and Business Services may es-tablish by rule a program under which asavings association may create a fund toprovide payment, protection and indemnifica-tion to the association, its officers, directorsand employees, its customers and the publicfor losses incurred or damages sustained. Theestablishment of such a fund shall be in lieuof some or all of the bonding and insurancerequirements of ORS 722.106, and shall onlybe allowed if the director finds that adequatethird-party insurance or bonding protectionis not available, or is only available at ex-cessive rates. Among the provisions of theprogram shall be:

(1) Provisions for creating and adminis-tering the fund. The provisions must requirethe pledging of collateral by the associationwith the Federal Home Loan Bank of Seattleor another pledge holder approved by the di-rector.

(2) A limitation on the amount of collat-eral that an association may pledge to thefund.

(3) Provisions for maintaining the fundand replacing expenditures from the fund.

(4) A requirement that an associationgive notice to its pledge holder before mak-ing any pledge, and authorization to thepledge holder to refuse a pledge when it de-termines the pledge to be inappropriate.

(5) Provisions for claim payments and re-imbursement from the fund. [1987 c.285 §2; 1987c.414 §70a]

722.108 Fiduciary relationship of di-rectors, officers and employees; conflictof interest; liability for violation. (1) Thedirectors, officers and employees of a savingsassociation occupy a fiduciary relationship tothe association. A director, officer or em-ployee of an association shall not engage orparticipate, directly or indirectly, in anybusiness or transaction involving the associ-ation when such person possesses any per-sonal interest, direct or indirect in thebusiness or transaction unless:

(a) Prior thereto, the person fully dis-closes to the board of directors such personalinterest;

(b) The business or transaction is fair tothe association and reasonable; and

(c) The business or transaction has theprior approval of not less than two-thirds ofthe authorized members of the board of di-rectors, the approval is entered in the min-utes of the meeting at which the business ortransaction is authorized and a director withany interest in the business or transactionabstains from voting on the question of ap-proval. However, any business or transactionin which more than one-third of the author-ized members of the board of directors havean interest may be consummated if the Di-rector of the Department of Consumer andBusiness Services approves the business ortransaction before its consummation.

(2) The director may require that a di-rector, officer or employee disclose any per-sonal interest, direct or indirect, in anybusiness or transaction on behalf of or in-volving the association and of the director′s,officer′s or employee′s control of or activeparticipation in an enterprise having activ-ities related to the business of the associ-ation.

(3) In addition to any other penalty pro-vided by law, an officer, director or employeewho violates this section is liable to the as-sociation for any profits inuring to the offi-cer, director or employee and any loss orexcess expense incurred by the associationas a result of such violation. [1975 c.582 §61; 1981c.472 §6]

722.110 [Repealed by 1975 c.582 §152]

722.112 Indemnification or reimburse-ment of director, officer, employee oragent. In addition to the authority grantedan association by ORS 57.255 (1985 Replace-



ment Part), a director, officer, employee oragent may be indemnified by an association,or reimbursed, for reasonable expenses nec-essarily incurred, even though the personwas negligent or committed an act or failedto perform a duty for which there is a com-mon law or a statutory liability if:

(1) The board of directors finds that theperson acted in good faith, in what the per-son believed to be the best interest of theassociation and without knowledge or rea-sonable cause to believe that any such actionor inaction was a violation of any law, andthe board approves the indemnification orreimbursement;

(2) The Director of the Department ofConsumer and Business Services concurs inthe findings of the board adopted under sub-section (1) of this section and approves theindemnification or reimbursement; and

(3) The indemnification or reimbursementis approved at an annual or special meetingof the members by a majority of the voteseligible to be cast. [1975 c.582 §62; 1987 c.197 §19]

722.113 Indemnification fund for offi-cers and directors; rules. The Director ofthe Department of Consumer and BusinessServices may establish by rule a programunder which a savings association may cre-ate a fund for indemnifying its directors andofficers. Among the provisions of the pro-gram shall be the following:

(1) Provisions for creating and adminis-tering the fund which shall require thepledging of collateral by the association withthe Federal Home Loan Bank of Seattle oranother pledge holder approved by the direc-tor.

(2) A limitation on the amount of collat-eral that an association may pledge to thefund.

(3) Provisions for maintaining the fundand replacing expenditures from the fund.

(4) A requirement that an associationgive notice to its pledge holder before mak-ing any pledge, and authorization to thepledge holder to refuse a pledge when it de-termines the pledge to be inappropriate.

(5) A requirement that, notwithstandingORS 60.047 (2)(d), 60.387 to 60.414 and722.112, an association that creates a fundshall indemnify a director or officer to thefull extent that there are resources in thefund in all cases except for fraud or bad faithby the director or officer. [1987 c.224 §2; 1987c.373 §90a; 1987 c.414 §166c; 1987 c.528 §5; 1991 c.883 §14]

722.114 Membership in association;voting; membership records. (1) Member-ships may be granted by the articles of in-corporation or bylaws of an association toborrowers or account holders of the associ-

ation, with such rights and liabilities as areallowed by the articles or bylaws. Unlessotherwise provided in the articles or bylaws,a member may vote in person or by proxy onany matter subject to a vote, at any regularor special meeting of the members. However,the members of a mutual association shallinclude its account holders and members ofa stock association shall include its stock-holders. The articles of incorporation maylimit or deny voting rights of any class ofmembers to the extent not inconsistent withthis chapter.

(2) Membership of an account holder ina mutual or stock association continues untilthe savings account is transferred on thebooks of the association or the account iswithdrawn. When a savings account is issuedby an association in the name of two or morepersons, a proxy is valid if executed by anyone or more of such persons.

(3) Each association shall maintain re-cords of the members of the associationshowing the name and address of each mem-ber and the status of each member as astockholder, account holder or borrower.[1975 c.582 §63; 1981 c.472 §7]


722.116 Member′s right to examinebooks and records; enforcement; attorneyfees. (1) Subject to ORS 722.118 (1), a mem-ber with voting rights has the right to ex-amine in person, or by an agent or anattorney, at reasonable times, for any properpurpose, the relevant books and records ofthe association and to make extracts there-from. If an association refuses to allow sucha member, or the agent or attorney of sucha member, to so examine and make extractsfrom such books and records for a properpurpose, the member may petition any courtof competent jurisdiction for an order com-pelling the production for examination bysuch member of the relevant books and re-cords. The order may be granted if:

(a) The member is acting in good faithand for a proper purpose in making the de-mand; and

(b) The confidentiality of the accountsand records pertaining to savings accountsand personal information in loan records ofother persons is preserved during such pro-duction and examination.

(2) The court may award reasonable at-torney fees to the prevailing party in an ac-tion under this section. [1975 c.582 §64; 1981 c.897§101; 1995 c.618 §125]

722.118 Account holder′s and borrow-er′s right to inspect accounts; member′sright to communicate with members; en-forcement; attorney fees. (1) Every ac-



count holder and borrower has the right toinspect the books and records of a savingsassociation that pertain to the accounts ofthe account holder or borrower. Otherwise,the right of inspection and examination ofthe accounts of account holders or personalinformation in loan records is limited to:

(a) The Director of the Department ofConsumer and Business Services or an au-thorized representative of the director.

(b) Persons authorized to act for the as-sociation.

(c) Any federal or state instrumentalityor agency authorized to inspect or examinethe books and records of an insured associ-ation.

(d) Any person acting under authority ofa court of competent jurisdiction.

(2) A member has the right to communi-cate with other members of the associationwith reference to any question pending or tobe presented for consideration at a meetingof the members. An association may not de-feat such right by a redemption of the mem-ber′s accounts in the association. A memberwho wishes to communicate with othermembers shall submit to the association arequest, subscribed by the member, whichincludes:

(a) The member′s full name and address.(b) The nature and extent of the mem-

ber′s interest in the association at the timethe member′s application for communicationis made.

(c) A statement of the reasons for andpurposes of the communication and that thecommunication is not for any reason otherthan the business welfare of the association.

(d) A copy of the communication.(e) If the communication concerns a

question to be raised at a meeting of themembers of the association, the date of themeeting at which the matter will be pre-sented.

(3) Upon receipt of the request referredto in subsection (2) of this section, the asso-ciation shall, within 10 days, notify the re-questing member of:

(a) The approximate number of the mem-bers and the estimated amount of the rea-sonable costs and expenses of mailing thecommunication; or

(b) Its determination to refuse the re-quest and the specific reasons for its refusal,including its determination whether or notthe request has been made for a proper pur-pose.

(4) Within seven days after receipt of thesum specified pursuant to subsection (3)(a)of this section and sufficient copies of the

communication, the association shall mailthe communication to all its members.

(5) If a request referred to by subsection(2) of this section is refused by the associ-ation, the requesting member may submit therequest and the refusal thereof to the direc-tor for review. The director may issue an or-der denying the request or, if the directorfinds the request is not for any reason otherthan the business welfare of the association,granting the request and directing the asso-ciation to comply with subsection (4) of thissection.

(6) In any action arising out of a requestthat is refused under this section, the courtmay award reasonable attorney fees to theprevailing party. [Formerly 722.303; 1985 c.762 §58;1995 c.618 §126]

722.120 [Repealed by 1975 c.582 §152]

722.122 Applicability of ORS 722.116and 722.118 to federal associations. Insofaras ORS 722.116 and 722.118 are not incon-sistent with federal law, they apply to a fed-eral association whose principal office islocated in this state and to the membersthereof, except that the request permitted byORS 722.118 (5) shall be submitted to theFederal Housing Finance Board, Washington,D.C., in the case of a federal association andforwarded to members only upon the orderand direction of that board. [1975 c.582 §66; 1999c.107 §6]

722.124 Notice of cease and desist or-ders in annual meeting notice. If a domes-tic association or a director, officer,employee or agent of a domestic associationwas issued one or more orders by the Direc-tor of the Department of Consumer andBusiness Services under ORS 722.464 withinthe 12 months immediately preceding thedate of the annual shareholders′ meeting, thedomestic association shall include in everynotice required for the annual meeting underORS 57.150 (1985 Replacement Part):

(1) A copy of ORS 722.464; and(2) A statement that the domestic associ-

ation or a director, officer, employee or agentof the domestic association received such anorder or orders. [1985 c.786 §62; 1987 c.197 §20; 1987c.215 §4]


722.130 [Amended by 1953 c.401 §11; 1959 c.227 §10;1961 c.398 §11; 1971 c.757 §8; 1973 c.368 §2; 1975 c.582 §79;renumbered 722.206]

(Stock; Dividends and Earnings; GeneralReserve and Net Worth Accounts)722.132 Payment for stock issued by a

stock association. The consideration for theissuance of stock of a stock association shallbe paid in money or payment in tangible as-sets at fair market value. When payment of



the consideration for which shares of stockare to be issued has been received by theassociation, such stock shall be consideredfully paid and nonassessable. This sectionshall not be considered to limit or prohibitan association from establishing stock op-tion, performance share or other benefitplans involving stock, or issuing stock undersuch a plan, if the association has receiveda certificate of authority and has satisfied allconditions the Director of the Department ofConsumer and Business Services has at-tached to the certificate. [1975 c.582 §67; 1981c.472 §8]

722.134 Sale or transfer of stock; whenapproval is required. (1) A stock associ-ation, unless it has the prior approval of theDirector of the Department of Consumer andBusiness Services, shall not:

(a) Sell or transfer to any person stockof the association that equals or exceeds 10percent of the total number of outstandingshares; or

(b) Sell or transfer to any person throughone or more transactions any number ofshares of stock adequate to give such personownership or control of 10 percent or moreof the outstanding shares of the association.

(2) No person shall acquire, through oneor more transactions, shares of stock suffi-cient to give such person ownership or con-trol, directly or indirectly, of record orbeneficially, of 10 percent or more of theoutstanding shares of the association, with-out prior approval of the director.

(3) Subsections (1) and (2) of this sectionalso apply:

(a) When a sale or transfer of stock to aperson increases the stock over which theperson has ownership or control from lessthan 25 percent to 25 percent or more of theoutstanding shares; or

(b) When a sale or transfer of stock to aperson increases the stock over which theperson has ownership or control from lessthan 50 percent to 50 percent or more of theoutstanding shares.

(4) As used in this section, “control”means having the power, whether directly orindirectly and whether individually or inconcert with one or more other persons, tocause action to be taken regarding voting orother incidents of ownership of the stock.

(5) The director shall disapprove a sale,transfer or acquisition if the director findsthat the character, financial responsibility,experience and fitness of the person whowould acquire control indicates that approvalwould not be in the interest of the accountholders, borrowers or stockholders of the as-sociation or in the public interest.

(6) If a sale, transfer or acquisition de-scribed by subsection (1), (2) or (3) of thissection is made without the prior approvalof the director, the director may order theassociation to set aside or revoke the sale,transfer or acquisition, or may order theperson to dispose of the shares or take suchother action as is deemed appropriate. [1975c.582 §68; 1979 c.863 §3; 1981 c.472 §9]


722.136 Ascertainment of earnings;payment of expenses. The gross earningsof a savings association shall be ascertainedat least annually on an accrual basis accord-ing to generally accepted accounting princi-ples. The expenses of an association shall bepaid first from its gross earnings, then fromearned surplus and finally from capital sur-plus. With the prior approval of the Directorof the Department of Consumer and BusinessServices, expenses may be paid from statedcapital or from any expense fund of a mutualassociation. [Formerly 722.145]

722.138 Conditions for payment of div-idends, distribution of earned surplus;holding earned surplus. (1) Before paymentof dividends to stockholders of a stock asso-ciation or distribution of earned surplus toaccount holders of a mutual association, anassociation shall provide for:

(a) Its expenses, which shall include in-terest paid on savings accounts;

(b) Its definite fixed obligations; and(c) The general reserve required by ORS

722.142.(2) Nothing contained in this section

prohibits an association from paying differentrates of dividends or interest upon differentclasses of stock or savings accounts.

(3) Accrued unpaid interest delinquentfor a period of more than three months shallnot be considered earnings of an association.

(4) A savings association may, in additionto the general reserve, hold as earned sur-plus such sum as the board of directors may,from time to time, consider necessary or de-sirable. [Formerly 722.155]


722.142 General reserve account forlosses and net worth requirements; rules.(1) A savings association shall establish andmaintain a general reserve account for lossesand other net worth accounts adequate toassure solvency of the association.

(2)(a) Each savings association shall ac-cumulate and maintain as a net worth ac-count a general reserve for the sole purposeof absorbing losses. At the annual closingdate following the anniversary of its certif-



icate of authority and each annual closingdate thereafter, the general reserve shallhave a minimum balance not less than anamount fixed by rule.

(b) The Director of the Department ofConsumer and Business Services by ruleshall fix the required minimum amount ofgeneral reserve accounts of associations. Therule shall provide a uniform schedule ofminimum levels to be reached during thefirst 20 or more years of an association′s op-eration for the purpose of achieving an or-derly accumulation of the general reserveaccount.

(3) The director may permit an associ-ation to cure a deficiency in its general re-serve account by requiring the board ofdirectors of the association to earmarkearned surplus, voluntarily pledged savingsaccounts of a mutual association, capitalcertificates of a mutual association, or capi-tal surplus or stated capital, including pre-ferred stocks, of a stock association, andcapital notes and debentures subordinated tosaving accounts, as part of its general re-serve account in the amounts needed to curethe deficiency. Amounts so earmarked shallbe held for the same purpose as the generalreserve to the extent the earmarked amountsare needed to maintain the required reserveaccount level. An association shall not paydividends or interest from the reserve ac-count or other funds earmarked for the pur-pose of meeting the reserve accountrequirement.

(4) Every savings association shall buildup and maintain its net worth so that at theclose of business on any annual closing dateits net worth accounts shall equal not lessthan the dollar amount determined in accor-dance with the rules to be adequate to assuresolvency of the association. The rules shallprovide for an adjustment of the net worthrequirement during the first years of an as-sociation′s operation in accordance withsubsection (2)(b) of this section. Notwith-standing other provisions of this section, thedirector may consider an association to be incompliance with this section if applicablefederal net worth and reserve requirementsfor federally insured associations are satis-fied. If an association fails to establish ormaintain the general reserve or the networth requirements of this section, the di-rector may in accordance with ORS 722.464require the association to take appropriatecorrective action.

(5) An association may establish reserveaccounts, in addition to the general reserve,as its board of directors may authorize, andmake transfers to and charge such reserveaccounts.

(6) Losses as they are determined, notcharged to other reserve accounts, shall becharged to the general reserve until thegeneral reserve account is exhausted. Afterexhaustion of the general reserve, any re-maining losses not charged to other reserveaccounts shall be charged as determined:

(a) In the case of a stock association, toearned surplus, then capital surplus and thenstated capital; or

(b) In the case of a mutual association,to earned surplus and then the expense fund,if any.

(7) Any insurance reserve required by aninsurer of the savings accounts of an associ-ation shall be considered part of the generalreserve for the purpose of subsection (2) ofthis section. [1975 c.582 §71; 1981 c.472 §10]

722.145 [Amended by 1959 c.227 §11; 1975 c.582 §69;renumbered 722.136]

722.147 [1959 c.227 §2; repealed by 1975 c.582 §152]722.148 [1963 c.288 §4; 1967 c.234 §5; 1971 c.757 §9;

1973 c.368 §3; repealed by 1975 c.582 §152]722.150 [Amended by 1953 c.401 §11; 1959 c.227 §12;

1961 c.398 §12; 1965 c.306 §3; 1967 c.234 §4; repealed by1975 c.582 §152]

(Miscellaneous)722.152 Membership fees prohibited. A

savings association shall not charge or col-lect a membership fee for issuing a savingsaccount or other obligation of the associ-ation. [1975 c.582 §72]

722.154 Publication of financial state-ments. Every association annually shallprepare a printed statement of the financialcondition of the association and make itavailable to the public. The statement shallbe in a form and published at the time pre-scribed by the Director of the Department ofConsumer and Business Services. [1975 c.582§73]

722.155 [Amended by 1953 c.401 §11; 1959 c.227 §13;1961 c.398 §13; 1965 c.306 §9; 1967 c.234 §2; 1975 c.582 §70;renumbered 722.138]

722.156 Records. (1) A savings associ-ation shall keep correct and complete re-cords, books of account and minutes of theproceedings of members, directors and theexecutive committee. Associations shall usesuch forms and observe such accountingprinciples and practices as the Director ofthe Department of Consumer and BusinessServices by rule requires from time to time.

(2) An association may cause any or allrecords kept by the association to be copiedor reproduced by any photostatic, photo-graphic or microfilming process that cor-rectly and permanently copies, reproduces orforms a medium for copying or reproducingthe original records on a film or other dura-ble material, and the association may there-



after dispose of the original record. Suchcopy or reproduction shall be considered anoriginal record for all purposes and shall betreated as an original record in all courts oradministrative agencies for the purpose of itsadmissibility in evidence. A facsimile,exemplification or certified copy of any suchcopy or reproduction reproduced from a filmrecord shall, for all purposes, be considereda facsimile, exemplification or certified copyof the original record. [1975 c.582 §74]

722.158 [1975 c.582 §75; repealed by 1987 c.650 §21]722.160 [Amended by 1959 c.227 §14; repealed by

1975 c.582 §152]

722.162 Conduct of business on holi-days; emergency closing. (1) This sectionapplies to domestic associations and to for-eign or federal associations doing business inthis state.

(2) As used in this section:(a) “Emergency” means any condition or

occurrence which may interfere with theconduct of normal business operations at theprincipal office or one or more of thebranches of an association, or which posesan imminent or existing threat to the safetyor security of persons or property.

(b) “Open for the general conduct of as-sociation business” means the office or of-fices of the association are open for carryingon substantially all business functions of theassociation.

(3) The following days are optional holi-days for purposes of this section:

(a) Each Saturday and Sunday.(b) New Year′s Day on January 1.(c) Martin Luther King, Jr.′s birthday on

the third Monday in January.(d) Presidents Day, on the third Monday

in February.(e) Memorial Day on the last Monday in

May.(f) Independence Day on July 4.(g) Labor Day on the first Monday in

September.(h) Columbus Day on the second Monday

in October.(i) Veterans Day on November 11.(j) Thanksgiving Day on the fourth

Thursday in November.(k) Christmas Day on December 25.(4) When an optional holiday, other than

a Saturday, falls on Saturday, the associationmay observe the holiday either on that dayor on the preceding Friday. When an op-tional holiday, other than a Sunday, falls ona Sunday, the association may observe the

holiday either on that day or on the suc-ceeding Monday.

(5) Except as otherwise provided in thissection, associations shall be open for thegeneral conduct of association business oneach day that is not an optional holiday.

(6) Any savings association may remainclosed on any holiday with respect to all orany of its functions.

(7) Subject to any applicable federal lawor regulation, an office of a savings associ-ation may be closed for any part or all of anyday other than a holiday if the times or dayswhich the office is open are posted on thepremises of the office.

(8) When the Director of the Departmentof Consumer and Business Services deter-mines that an emergency exists, the directormay authorize the closing of the principaloffice or any branch of an association thatmay be affected by the emergency. The of-fice or branch so closed may remain closeduntil the director determines that the emer-gency has ended and for such further timethereafter as may reasonably be required toprepare the office or branch to reopen.

(9) When the officers of an associationdetermine that an emergency exists whichaffects the principal office or a branch of theassociation, they may close the office orbranch without the approval of the directorfor a period not to exceed 48 hours, exclud-ing holidays, during the continuation of theemergency. An association closing an officeor branch under this subsection shall giveprompt notice of its action to the director or,in the case of a foreign or federal associ-ation, to its supervisory authority.

(10) The principal officers of a savingsassociation may close any office of the asso-ciation on any day designated, by proclama-tion of the President of the United States orthe Governor of this state, as a day ofmourning, rejoicing or other specialobservance.

(11) When any obligation payable at, byor through an association, principal office orbranch falls due on a day on which it re-mains closed under this section, it shall bedue and payable on the next day on whichthe association, office or branch is reopened.Any act authorized, required or permitted tobe performed at, by or with respect to anysavings association, office or branch on a dayon which it remains so closed may be per-formed on the next succeeding day on whichthe association, office or branch is reopened;and no liability or loss of rights of any kindshall result from such closing. [Formerly722.185; 1981 c.472 §11; 1985 c.627 §2; 1989 c.582 §2; 1989c.596 §2; 1995 c.373 §2; 1997 c.188 §2; 2001 c.104 §285]



722.164 Sharing of information oncustomers by savings associations andrelated companies. (1) A savings associ-ation may share financial and credit infor-mation concerning its customers:

(a) With any company of which it di-rectly or indirectly controls 50 percent ormore of the voting shares; and

(b) With any parent company that di-rectly or indirectly controls 50 percent ormore of the voting shares of the savings as-sociation.

(2) Any company controlled by a savingsassociation in the manner described in sub-section (1) of this section and any parentcompany of the same savings association, asdescribed in subsection (1) of this section,may share information concerning their cus-tomers with each other, with the savings as-sociation and with any other company socontrolled by the same savings association.

(3) This section shall not be construed asotherwise permitting or limiting the sharingor disclosure of information.

(4) For purposes of this section, “custom-ers” includes but is not limited to depositors,borrowers, credit card holders, lessees, pur-chasers under contracts and applicants forcredit. [1985 c.798 §2]

722.165 [Amended by 1953 c.401 §11; 1961 c.280 §9;1971 c.757 §10; 1975 c.582 §117; renumbered 722.434]

722.167 [1985 c.804 §4; repealed by 1987 c.491 §9]722.170 [Amended by 1971 c.757 §11; 1973 c.368 §4;

repealed by 1975 c.582 §152]722.175 [Amended by 1971 c.743 §418; repealed by

1975 c.582 §152]722.180 [Amended by 1961 c.398 §14; repealed by

1975 c.582 §152]722.185 [Amended by 1975 c.582 §76; renumbered

722.162]722.190 [Amended by 1959 c.169 §2; repealed by 1975

c.582 §152]722.195 [1963 c.288 §17; 1969 c.138 §4; repealed by

1975 c.582 §152]722.200 [1965 c.306 §7; repealed by 1975 c.582 §152]

GENERAL POWERS722.202 General powers of associ-

ations. A savings association has all thepowers conferred by this chapter, or itscharter or certificate of incorporation, bothexpress and implied, and such other rights,privileges and powers as are incidentalthereto or reasonably necessary or appropri-ate to the accomplishment of the purpose ofthe association. Among other rights, privi-leges and powers, and except as otherwiselimited by the provisions of this chapter, asavings association may:

(1) Procure insurance of its real estateand other loans and of its savings accountsfrom any federal, state or private agency or

corporation authorized to write such insur-ance and, in the exercise of such powers,may comply with any requirements of law orrule or order promulgated and execute anycontracts and pay any premiums required inconnection therewith.

(2) Be a member of a Federal Home LoanBank, the Federal Deposit Insurance Corpo-ration or any similar federal or state agency,and do all things required by federal or statelaw to obtain and continue such membership.

(3) Acquire savings and pay earningsthereon, and lend and invest its funds.

(4) Subject to compliance with the re-serve requirements for demand deposits, re-ceive demand deposits any time after theearliest of one of the following dates:

(a) When federal regulatory authoritieseliminate the interest rate differentials be-tween bank time accounts and federal asso-ciation time accounts.

(b) When federal legislation is enactedpermitting charters for federal associationsto include demand deposit authority.

(c) When federal regulatory authoritiespermit demand deposits for federal associ-ations.

(5) Subject to regulations of the UnitedStates Treasury Department, serve as depos-itories for federal taxes or as treasury taxand loan depositories, and satisfy any re-quirements in connection therewith includ-ing establishing tax and loan accounts andnote accounts (which are not classified assavings accounts or savings deposits), whichare subject to the right of immediate with-drawal or call, and may require pledgingcollateral.

(6) Participate in future and optiontransactions through regulated or recognizedmarkets, subject to rules prescribed by theDirector of the Department of Consumer andBusiness Services. [1975 c.582 §77; 1979 c.863 §4;1997 c.631 §536; 1999 c.107 §14]

722.204 Associations may be grantedpowers of federal associations; rules.Notwithstanding any limitation, condition orprohibition in this chapter and to carry outthe purposes of this chapter, the Director ofthe Department of Consumer and BusinessServices may adopt rules permitting associ-ations to exercise any right, power or privi-lege conferred by federal law or regulationon federal associations doing business in thisstate. The director may adopt such a rule ifthe director finds that the exercise of anysuch right, power or privilege serves thepublic convenience and advantage. [1975 c.582§78]




722.206 Power of association to bor-row; limitations, exceptions and prefer-ences. (1) A savings association may borrowmoney for any of its corporate purposes,when authorized by proper resolution of itsboard of directors. However, the aggregateindebtedness of an association outstandingat any one time shall not exceed 35 percentof its assets.

(2) Notwithstanding the limitation insubsection (1) of this section, an associationmay:

(a) Accept savings accounts as providedby ORS 722.252 to 722.268.

(b) Borrow or obtain advances from theFederal Home Loan Bank or other similarfederal or state agency in such amounts andupon such terms as may be prescribed bysuch bank or agency.

(c) Issue capital notes or debentures asprovided by ORS 722.208.

(3) An association may borrow from andlend to other savings associations or federalassociations.

(4) When the Director of the Departmentof Consumer and Business Services considersan indebtedness of an association incurredunder this section to be detrimental to theinterests of its account holders or othercreditors, the director shall require the asso-ciation to change or reduce its indebtednessto an extent the director considers reason-able, giving the association a reasonable timein which to effect such change or reductionof indebtedness.

(5) A savings association may assign orpledge any property of the association, orrepledge any shares of the stock pledged tothe association, as collateral security forloans obtained for any of its corporate pur-poses.

(6) Any pledgee or other lawful holder ofany note or other evidence of indebtednessdue to an association, has the right to en-force, in the pledgee′s or holder′s own nameor in the name of the association, all appro-priate remedies to enforce collection,whether or not the stock described in con-nection with the note is held by such pledgeeor holder.

(7) Obligations of an association are,upon liquidation, payable out of the assets ofthe association in the following order ofpreferences to:

(a) Secured creditors.(b) Financial institutions, as defined in

ORS 706.008.(c) Other creditors, including savings ac-

count holders, unless the bylaws of the asso-ciation provide a different order of

preference between account holders andother creditors.

(d) Stockholders. [Formerly 722.130; 1981 c.472§14; 1997 c.631 §537]

722.208 Capital notes and debentures.(1) A savings association may issue and sellits capital notes or debentures with the priorapproval of the Director of the Departmentof Consumer and Business Services and sub-ject to any sinking fund or other conditionsthe director may impose. An associationshall also have the prior approval of a ma-jority of the stockholders owning a majorityof the issued and outstanding shares of stockof the association to issue convertible capitalnotes or debentures.

(2) Capital notes or debentures issued bya stock association may be converted intostock in accordance with provisions approvedby the director and contained in the capitalnotes or debentures. Convertible capitalnotes or debentures may be issued withoutoffer thereof to existing stockholders if soauthorized by the director provided that theright of preemption does not otherwise exist.

(3) Capital notes and debentures shall bean unsecured indebtedness of the associationand shall be subordinate to the claims of ac-count holders and all other creditors of theassociation, regardless of whether the claimsof account holders or other creditors arosebefore or after the issuance of such deben-tures or capital notes. In the event of liqui-dation, all account holders and othercreditors of the association shall be entitledto be paid in full before any payment shallbe made on account of principal or intereston capital notes or debentures. Capital notesand debentures shall contain a statement ofthe rights and priorities of the lenders.

(4) The amounts of outstanding capitalnotes or debentures legally issued by an as-sociation shall be treated as capital for thepurpose of computing general reserve re-quirements. [1975 c.582 §80; 1979 c.863 §5]

722.210 [Repealed by 1967 c.234 §6 (722.211 enactedin lieu of 722.210)]

722.211 [1967 c.234 §7 (enacted in lieu of 722.210);repealed by 1975 c.582 §152]

722.212 Trust business powers. A do-mestic association may, in addition to otherpowers granted by this chapter, conduct atrust business. In the conduct of a trustbusiness an association may exercise all thepowers of a trust company, as defined byORS 709.150, upon compliance with the lawsof this state relating to the regulation of atrust business. [1975 c.582 §81]

722.214 Acting as trustee or custodianunder Employee Retirement Income Se-curity Act of 1974. A savings associationmay act as trustee or custodian within the



contemplation of subsections (d) and (f) ofsection 401 and subsection (a) of section 408of the Internal Revenue Code of 1954, asamended; however, an association shall nothave the power to invest assets received assuch a trustee or custodian other than insavings accounts of the association unless itcomplies with ORS 722.212. [1975 c.582 §82]

722.215 [Repealed by 1975 c.582 §152]722.220 [Repealed by 1975 c.582 §152]722.225 [Amended by 1975 c.582 §129; renumbered

722.468]722.230 [Amended by 1959 c.227 §15; 1961 c.398 §15;

repealed by 1969 c.138 §15]722.235 [Repealed by 1971 c.743 §432]722.240 [Amended by 1959 c.227 §16; 1963 c.288 §6;

1971 c.743 §419; repealed by 1975 c.582 §152]722.245 [Repealed by 1975 c.582 §152]722.250 [Repealed by 1975 c.582 §152]

SAVINGS OPERATIONS722.252 Account holders as creditors

of association. The relationship between anassociation and its account holders is thatof debtor and creditor. [1975 c.582 §83]

722.254 Savings accounts. (1) A savingsaccount may be opened and owned by anyone or more persons, by a public officer, ora political subdivision or other governmentalunit. Deposits to savings accounts may bemade only in cash or its equivalent. Exceptas limited by the board of directors from timeto time, an account holder may make addi-tions to a savings account in such amountsand at such times as the account holder mayelect. An association may refuse to issue, re-new or continue a savings account.

(2) A savings association may issue anytype of savings account contract not prohib-ited by this chapter or other applicable law,or by the rules adopted pursuant thereto.Any special terms and provisions applicableto a savings account, the ownership thereofand the conditions upon which withdrawalsmay be made shall be clearly and truthfullyset forth in writing.

(3) A savings association shall not offeror issue any savings account contract unlessthe terms of the contract and the forms usedto evidence ownership of the account havebeen approved by the Director of the De-partment of Consumer and Business Services.The evidence of ownership of a savings ac-count is not subject to ORS chapter 78.

(4) Transfer of a savings account or anyinterest therein is not binding upon the as-sociation until the transfer has been madeon the books of the association. The associ-ation may treat the holder of record of asavings account as the owner thereof for allpurposes until a transfer has been made onthe books of the association. This subsection

does not apply to negotiable certificates ofdeposit or other negotiable instruments is-sued or caused to be issued by an associ-ation. [1975 c.582 §84; 1981 c.472 §15; 1985 c.676 §60]

722.256 Withdrawal from savings ac-counts; rules. (1) An account holder maywithdraw part or all of the funds of the ac-count holder subject to the terms applicableto the savings account of the account holder.

(2) The Director of the Department ofConsumer and Business Services shall pre-scribe by rule:

(a) The maximum penalty that may beapplied by an association for prematurewithdrawal from a savings account; and

(b) The conditions under which the pen-alty may be applied.

(3) An account holder may withdraw allor part of the account pledged as security forany purpose only in accordance with theterms of the pledge. [1975 c.582 §85]

722.257 Time period for drawing onitem deposited in savings or federal as-sociation; disclosure. (1) A savings associ-ation or federal association shall allow anaccount holder who deposits an item in theaccount holder′s account to draw against theitem within the time period applicable tothat item under a schedule adopted by theDirector of the Department of Consumer andBusiness Services.

(2) Except as provided in subsection (3)of this section, in any agreement between asavings association or federal association andits customer, the savings association or fed-eral association may not specify a period oftime for purposes of drawing on an item thatis longer than any applicable period specifiedin the schedule adopted by the director.

(3) This section does not prohibit asavings association or federal association andits customer from agreeing to a longer periodthan that specified in the schedule adoptedby the director for drawing against items be-cause of special circumstances, if the agree-ment is not contained in a preprinted formand is entered into by the savings associationor federal association only in special circum-stances.

(4) The provisions of this section do notalter or impair any right or obligation underORS chapter 74.

(5) Savings associations and federal asso-ciations shall disclose in writing the sched-ule adopted by the director and in effect onthe date of the disclosure. For persons whobecame account holders prior to the date onwhich the director adopts a schedule andwho remain account holders thereafter, thedisclosure shall be made within 30 days afterthe director adopts the schedule. For persons



who become account holders after the dateon which the director adopts the schedule,the disclosure shall be made prior to theopening of the account holder′s account.

(6) Every savings association and federalassociation shall post or provide in a con-spicuous location in its principal place ofbusiness and at each branch a notice statingthe schedule adopted by the director.

(7) As used in this section, “item” hasthe meaning given that term in ORS 74.1040and includes, without limitation, checks, ne-gotiable orders of withdrawal and sharedrafts. [1987 c.491 §6; 1997 c.631 §538]

722.258 Payment of accounts of mi-nors and persons under disability. Unlessthe written savings account contract pro-vides otherwise, when a minor or other per-son under legal disability holds a savingsaccount, the association or federal associ-ation may pay out the funds to such personor the assigns of such person with like effectas if such person were of full age and legalcapacity. Such payment shall be in all re-spects valid and a complete discharge of theobligation of the association or federal asso-ciation as to the amount so paid. [1975 c.582§86; 1987 c.658 §2]

722.260 [1967 c.257 §3; repealed by 1975 c.582 §152]

722.262 Payment of savings accountor demand deposit account on death ofholder; affidavit requirements. (1) On thedeath of an account holder or a holder of ademand deposit account, if the savings li-ability of an association or federal associ-ation on all savings accounts of the deceased,and the amounts held in all demand depositaccounts of the deceased, is $25,000 or less,the association or federal association may,upon receipt of an affidavit from the personclaiming the account as provided in subsec-tion (2) of this section, pay the withdrawalvalue of the accounts of the deceased holder:

(a) To the surviving spouse on demandof the surviving spouse at any time after thedeath of the holder;

(b) If there is no surviving spouse, to theDepartment of Human Services, on demandof the department no less than 46 days andno more than 75 days from the death of theholder if the holder received public assist-ance under ORS 411.708, 411.795 or 414.105;

(c) If there is no surviving spouse and nodepartment claim, to the holder′s survivingchildren 18 years of age or older;

(d) If there is no surviving spouse, de-partment claim or surviving child 18 yearsof age or older, to the holder′s survivingparent; or

(e) If there is no surviving spouse, de-partment claim, surviving child 18 years of

age or older or surviving parent, to theholder′s surviving brothers and sisters 18years of age or older.

(2) The affidavit shall:(a) State where and when the account

holder or holder of a demand deposit accountdied;

(b) State that the total withdrawal valueof all savings and demand deposit accountsof the deceased holder in all associations inOregon, including federal associations, doesnot exceed $25,000;

(c) Show the relationship of the affiantto the deceased holder; and

(d) Embody a promise to pay the expensesof last sickness, funeral expenses and justdebts of the deceased holder out of the ac-count to the full extent of the account ifnecessary, in the order of priority prescribedby ORS 115.125, and to distribute any re-maining moneys to the persons who are en-titled to those moneys by law.

(3) In the event the holder died intestatewithout known heirs, an estate administratorof the Department of State Lands appointedunder ORS 113.235 shall be the affiant andshall receive the withdrawal value of the ac-counts as escheat property.

(4) A savings association or federal asso-ciation is under no obligation to determinethe relationship of the affiant to the deceasedholder. Payment made in good faith to theperson or the Department of Human Servicesor an estate administrator of the Departmentof State Lands making the affidavit is a fullacquittance and release of the association orfederal association for the amount so paid.

(5) A probate proceeding is not necessaryto establish the right of the surviving spouse,department, surviving children, survivingparent or surviving brothers and sisters towithdraw an account as provided by thissection. However, if a personal represen-tative is appointed in an estate of a deceasedholder whose account has been withdrawnunder this section, the person withdrawingthe account shall account for it to the per-sonal representative. [1975 c.582 §87; 1981 c.298§4; 1981 c.472 §16; 1987 c.658 §3; 1999 c.594 §1; 2003 c.395§22; 2005 c.381 §27; 2007 c.369 §2]

722.264 Savings accounts as legal in-vestments and as security. (1) Personalrepresentatives, trustees and otherfiduciaries; banks, trust companies, creditunions and similar financial organizations;charitable, educational and eleemosynarycorporations, funds and organizations; andmunicipal and other public corporations andpublic officials may invest funds held bythem, without any order of any court, insavings accounts of savings associations and



federal associations. Such investments shallbe considered legal investments.

(2) A savings association may pledge itsassets to secure public funds as provided un-der ORS chapter 295. For the purposes ofthis section, “public funds” has the meaninggiven that term by ORS 295.001.

(3) When a deposit of securities or a bondwith security is required for any purposeunder the laws of this state or otherwise, asavings account of an association or federalassociation is acceptable for such a depositor security.

(4) This section is supplemental to otherlaws relating to legal investments and to thedeposit of securities and the filing of bondsfor any purpose.

(5) Notwithstanding any other provisionof law, when a savings association or federalassociation pledges securities or any otherassets to secure public funds, the custodianof such public funds shall be a lien creditor,as defined in ORS 79.0102, with respect tothe securities or assets which have beenpledged to secure such funds. [1975 c.582 §88;1989 c.232 §1; 1991 c.67 §191; 2001 c.445 §181]

722.266 Savings accounts as securityfor loans. An association may take thepledge of a savings account of the associ-ation held by a person other than a borroweras security or additional security for anyloan made or purchased by the association.[1975 c.582 §89]

722.268 Service charge on dormantaccounts. (1) A savings association maymake a service charge against a savings ac-count if the liability of the association on theaccount is $25 or less and, at the time thecharge is made, the account holder has notwithin the last two years:

(a) Increased or decreased the amount ofthe account or presented an appropriate re-cord for the crediting of interest or earnings;

(b) Corresponded with the associationconcerning the account; or

(c) Otherwise indicated an interest in theaccount as evidenced by a memorandum onfile with the association.

(2) Service charges shall not be madeunless 30 days prior to making the firstcharge the association mails to the accountholder a notice that service charges will bemade under the conditions described by sub-section (1) of this section. The notice shallbe sent by registered or certified mail to theaccount holder at the last-known address ofthe account holder as shown on the recordsof the association. A service charge madeunder this section shall not exceed 50 centsfor any calendar month. [1975 c.582 §90]

INVESTMENT OPERATIONS(Investment Powers)

722.302 Minimum liquid assets; rules.(1) Every savings association shall have onhand at all times cash and other assetsreadily convertible into cash having a valueof not less than a percentage of its savingsliability fixed by rule as necessary for theprudent conduct of the affairs of the associ-ation. The Director of the Department ofConsumer and Business Services shall fromtime to time by rule define assets readilyconvertible to cash and fix the minimumpercentage of the savings liability of any as-sociation that shall be used to determine thevalue of cash and other assets necessary tocomply with this subsection. The directormay consider an association to be in compli-ance with this section if the association sat-isfies applicable federal liquidityrequirements for federally insured associ-ations.

(2) Cash and assets readily convertible tocash, within the limits required by subsec-tion (1) of this section, shall not be pledgedor otherwise held as security for the paymentof any obligation of the association.

(3) Unless an association is in compli-ance with subsection (1) of this section, itshall not make any loan or investment with-out the prior approval of the director, except:

(a) To invest in cash or other assetsreadily convertible to cash;

(b) To invest in a loan secured wholly bypledge of a savings account issued by the as-sociation; or

(c) To honor a loan commitment madeprior to the association′s failure to meet therequirement of subsection (1) of this section.[1975 c.582 §91; 1981 c.472 §17]

722.303 [1967 c.234 §9; 1975 c.582 §65; renumbered722.118]

722.304 Permitted investments; limita-tions. (1) A savings association may investits assets without limit in:

(a) Assets readily convertible to cash, asdefined under ORS 722.302, and deposits andaccounts in and obligations of banks;

(b) Bonds and other obligations of theUnited States; and

(c) Bonds and other obligations that areguaranteed as to principal and interest bythe United States and issued by any agencyof the United States.

(2) A savings association may invest, andmay have invested at any time, not to exceed30 percent of its assets in:

(a) Bonds, other obligations and stockapproved by the Director of the Departmentof Consumer and Business Services and is-



sued by an agency of the United States or afederally sponsored instrumentality; andbonds and other obligations approved by thedirector and issued by a state, or by a city,county, municipal corporation, political sub-division or special district of any state; thepreferred stock, bonds and obligations of acorporation domiciled in the United States,which are approved by the director and arerated at the time of purchase in one of thefour highest grades by a recognized serviceorganization that has been regularly engagedfor a period of 10 years or more in rating orgrading bonds; or loans secured by such ob-ligations;

(b) Real and personal property interestsas authorized by ORS 722.312 and 722.314;

(c) Stock and obligations of service cor-porations, as authorized by ORS 722.308;

(d) Other prudent investments as author-ized by ORS 722.306;

(e) Loans as authorized by ORS 722.332to 722.342; and

(f) Commercial paper, certificates of de-posit, banker′s acceptances and similar com-mercial items commonly used in trade orbusiness and issued or guaranteed by an in-sured institution, as defined in ORS 706.008.

(3) An association shall not invest anyassets as described by subsection (2)(c) to (f)of this section unless the association on itslast monthly closing date satisfied or couldhave satisfied its minimum general reserveand net worth requirements as determinedunder ORS 722.142.

(4) If the director finds that notwith-standing subsection (3) of this section, it isan unsafe or unsound practice for an associ-ation to exercise the powers granted by sub-section (2)(c) to (f) of this section, thedirector may issue a cease and desist orderdirecting the association to cease exercisingsuch powers. An order issued under thissubsection may be based on, but need not belimited to, a finding that the financial condi-tion or management capability of the associ-ation is not adequate to exercise such powersand assume the risks involved in the exerciseof such powers.

(5) A savings association may invest itsassets in a service corporation as provided inORS 722.309. [1975 c.582 §92; 1977 c.166 §3; 1979 c.863§6; 1981 c.472 §18; 1983 c.321 §5; 1985 c.762 §59; 1987 c.911§17; 1997 c.631 §539; 2005 c.80 §6]


722.306 “Prudent person” investmentrule. (1) A savings association may invest itsassets in a manner not expressly prohibitedby law if such investments are made in theexercise of the judgment and care under thecircumstances then prevailing which persons

of prudence, discretion and intelligence exer-cise in the management of their own affairsnot in regard to speculation but in regard tothe permanent disposition of their funds,considering the probable income as well asthe probable safety of their capital. An asso-ciation shall not invest in the voting commonstock of a corporation unless the associationacquires a majority of the shares of the vot-ing stock of the corporation.

(2) Investments held at any one time un-der this section shall not exceed in the ag-gregate an amount equal to 50 percent of thenet worth accounts of the association on itslast monthly closing date. An association isnot required to divest itself of any invest-ments made under this section if the invest-ments met the requirements of this sectionat the time they were made.

(3) If the Director of the Department ofConsumer and Business Services has reasonto believe that loans or other investmentsmade pursuant to this section are not pru-dent, proper or sound investments or are not,directly or indirectly, yielding an income orbenefit, the director may direct the associ-ation to report to the director under oath theamount and nature of such loans or invest-ments and any security therefor, their mar-ket value and other pertinent information. Ifthe director thereafter determines that anysuch investment is not prudent, proper orsound, the director may issue an order di-recting the association to dispose of such in-vestment within a reasonable time asdesignated by the director. [Formerly 722.497;1979 c.863 §7]

722.308 Investment in service corpo-rations; services performed for associ-ation to be subject to regulation andexamination by director; rules. (1) An as-sociation may invest in the stock and obli-gations of one or more service corporations.However, an association shall not make suchan investment, without the prior approval ofthe Director of the Department of Consumerand Business Services, when any of the vot-ing stock of the service corporation is avail-able for purchase by or owned by personsother than savings associations or federalassociations.

(2) The director shall, by rules adopted tocarry out this section, prescribe a maximumpercentage of assets not to exceed five per-cent that an association may invest in ser-vice corporations.

(3) An association may not cause to beperformed, by contract or otherwise, any ofthe services for itself, whether on or off itspremises, unless assurances satisfactory tothe director are furnished to the director byboth the association and the person or or-ganization performing the services that the



performance of the services will be subjectto regulation and examination by the direc-tor to the same extent as if the services wereperformed by the association itself on its ownpremises.

(4) This section does not apply to a ser-vice corporation described in ORS 722.309.[1975 c.582 §94; 1983 c.37 §36; 1983 c.321 §6; 1997 c.631§540]

722.309 Service corporations under-taking public projects; authority to investand organize; conditions; corporate form;functions. (1) As provided in this section:

(a) A savings association may invest itsassets in a service corporation described inthis section.

(b) A savings association may organize aservice corporation described in this sectionas a wholly owned subsidiary of the savingsassociation and invest the savings associ-ation′s assets in the corporation.

(2) A savings association may invest inor organize and invest in a service corpo-ration under subsection (1) of this section ifthe following conditions are satisfied:

(a) The projects undertaken by the ser-vice corporation must be predominantly of acivic, community or public nature, and notmerely of a private or entrepreneurial na-ture.

(b) The savings association′s investmentsin the service corporation must comply withthe prudent investment rule under ORS722.306.

(c) The savings association′s aggregateinvestment in service corporations and theirprojects must not exceed one percent of theassets of the savings association.

(d) The savings association must submitto the Director of the Department of Con-sumer and Business Services its proposal forinvesting in or organizing and investing in aservice corporation and the proposal mustreceive the director′s approval.

(e) The membership of the board of di-rectors of the community development cor-poration must be representative of thecommunity in which the corporation is tooperate.

(f) If the corporation is organized underthe Oregon Nonprofit Corporation Law, thestock of the corporation purchased by thesavings association, or the savings associ-ation′s membership in the corporation if itdoes not issue stock, shall be carried on thebooks of the savings association at a valuenot exceeding $1.

(3) A service corporation may be organ-ized under this section as a for-profit corpo-ration under ORS chapter 60 or as a

nonprofit corporation under the OregonNonprofit Corporation Law.

(4) A service corporation to which thissection applies is a corporation that is au-thorized under its articles of incorporationto:

(a) Acquire real estate. This paragraphdoes not authorize real estate investmentthat is primarily speculative in nature.

(b) Make equity investments in smallbusinesses and in development projects thatprimarily benefit small businesses.

(c) Participate in joint ventures withoutside partners. [1983 c.321 §8; 1987 c.197 §21]

Note: 722.309 and 722.311 were added to and madea part of ORS chapter 722 by legislative action but werenot added to any smaller series therein. See Preface toOregon Revised Statutes for further explanation.


722.311 Proposal to invest in or or-ganize service corporation for publicprojects; approval by director. (1) Asavings association shall submit to the Di-rector of the Department of Consumer andBusiness Services, on an application formdesigned by the director, its proposal to or-ganize or invest in a service corporation un-der ORS 722.309. The savings associationshall describe in detail on the application thescope of development activities that the ser-vice corporation will undertake. The directorshall approve or disapprove the applicationas provided in this section. If the directorapproves an application to organize a servicecorporation, the savings association shall in-corporate the proposed corporation as pro-vided by law.

(2) The director may submit an applica-tion to any appropriate state agency or city,county or other local government for its ad-vice and assistance on determining the needand practicability of the projects proposed inthe application. [1983 c.321 §9]

Note: See note under 722.309.

722.312 Real property investments;limit on property, improvements andfurnishings for association′s business of-fices. (1) An association may invest its fundsin real property, including property conven-ient for locations for the transaction of itsbusiness.

(2) An association shall not invest or ob-ligate itself to invest more than 10 percentof its assets in the total cost of real property,including improvements thereon, for its busi-ness locations, without the prior approval ofthe Director of the Department of Consumerand Business Services.

(3) An association may invest a reason-able amount in property such as furniture,



fixtures and equipment, for use in carryingon its own business.

(4) An association shall not enter, or atany time carry on its books, the real prop-erty and improvements thereon owned by itunder subsection (1) of this section at a val-uation exceeding actual cost to the associ-ation. Investments in improvements to realproperty held under this section and invest-ments under subsection (3) of this sectionshall be reduced annually by direct depreci-ation or creation of a depreciation reserve.[1975 c.582 §95]

722.314 Real property acquired byforeclosure; valuation. (1) A savings asso-ciation may purchase at any sale, public orprivate, any real property upon which it hasa mortgage, judgment, lien or other claim. Itmay lease, sell, convey, exchange or mort-gage such property, without regard to therequirements of ORS 722.322 (7), or the asso-ciation may hold such property as an invest-ment under ORS 722.312.

(2) An association shall not enter or, ex-cept as provided by subsection (3) of thissection, carry on its books real property ac-quired pursuant to subsection (1) of this sec-tion at a value in excess of the amountexpended by the association in the acquisi-tion of the property. The amount expendedmay include the principal balance on theloan and taxes, insurance, attorney fees andcourt costs, to the date of acquisition of theproperty, less the withdrawal value of anysavings account pledged as security for theloan.

(3) If an association makes permanentimprovements on property acquired by theassociation pursuant to this section, it mayadd the cost of such improvements to thevalue of the property. [1975 c.582 §96]

722.315 [Amended by 1953 c.401 §11; 1957 c.224 §1;1961 c.398 §18; 1963 c.288 §7; 1967 c.257 §5; repealed by1975 c.582 §152]


(Loans)722.322 Real estate loans. (1) A savings

association may invest any percentage of itsassets in loans secured by mortgages or realestate contracts on interests in real property.Investments made by an association underthis section shall be made in accordancewith sound lending practices and the rulesadopted by the Director of the Departmentof Consumer and Business Services to carryout this section.

(2) A loan on the security of a mortgageshall not exceed 100 percent of the appraisedvalue of the security. The term of a straightloan shall not exceed five years.

(3) If a loan is secured by a mortgagewhich is junior to prior mortgages or liens,the sum of the loan amount and the amountunpaid upon prior encumbrances, excludingtaxes not due, shall not exceed the applicablelimitations of this chapter.

(4) If a loan is secured by a leasehold in-terest, the loan shall provide that:

(a) The loan will be completely paidwithin a period of four-fifths of the term ofthe leasehold; and

(b) The association is entitled to be sub-rogated to all rights of the lessee under theleasehold.

(5) A mortgage shall not be subject toany prior mortgage, liens or encumbrancesagainst the property unless the aggregateamount of such mortgage and any priormortgage, liens and encumbrances does notexceed 100 percent of the appraised value ofthe property.

(6) An association may invest in real es-tate contracts if the principal amount dueunder the contract does not exceed 100 per-cent of the appraised value of the propertyand the association holds or acquires the ti-tle to the property covered by the contract.

(7) Unless the excess is guaranteed orinsured, or an excess reserve is established,as provided by ORS 722.326, an associationshall not:

(a) Make a loan upon the security of aninterest in real property in excess of 90 per-cent of the appraised value thereof; or

(b) Invest in a real estate contract havinga balance due in excess of 90 percent of theappraised value of the property.

(8) An association may renew or extenda loan made or contract purchased underthis section if, as renewed or extended, theloan or contract complies with the limita-tions and conditions provided under this sec-tion at the time of the renewal or extension.

(9) As used in this section:(a) “Mortgage” includes a first or second

mortgage, a trust deed or a first lien on aleasehold.

(b) “Prior liens and encumbrances” doesnot include:

(A) A lease, in case the loan is securedby a mortgage on an interest, other than aleasehold interest, in real property.

(B) A sublease, in case the loan is se-cured by a mortgage on a leasehold interest.[1975 c.582 §97; 1979 c.863 §8]

722.324 Appraisal of property prior toloan. A savings association shall not makeor acquire a loan secured by an interest inreal property except upon the report, inwriting, of an appraiser appointed by the as-



sociation. The report shall state the fairmarket value of the property to be used assecurity. Each appraisal report shall containsufficient information and data concerningthe appraised real property interest to sub-stantiate the fair market value of the prop-erty as determined by the appraiser. [1975 c.582§98]


722.326 Real estate loans in excess of95 percent of appraised value; reserve forpayment of loss. (1) An association maymake a loan or invest in a real estate con-tract described by ORS 722.322 (7) if the ex-cess is guaranteed or insured against loss bya mortgage guarantee insurance company li-censed to transact insurance in this state.When the excess does not exceed 95 percentof the appraised value, an association may,in lieu of such guarantee or insurance, es-tablish an excess reserve account for thepayment of losses.

(2) When an excess reserve account isestablished under subsection (1) of this sec-tion, the association shall from time to timeplace in the excess reserve account sums ad-equate to maintain a balance in the accountequal to five percent of the entire unpaidbalance on all such loans and contracts. Anylosses on such loans and contracts shall becharged to the excess reserve account untilit is exhausted and, after that, such lossesmay be charged to earned surplus or otherreserve accounts. [1975 c.582 §99; 1979 c.863 §9]

722.328 Loans to account holders. Asavings association may invest its assets inloans to its account holders on the securityof its savings accounts, but any such loanshall not exceed 100 percent of the with-drawal value of the security given. [Formerly722.415]


722.332 Loans secured by life insur-ance policies; education loans. (1) Asavings association may invest its funds inloans secured by the pledge of policies of lifeinsurance. Any such loan shall not exceedthe cash value of the policy. The assignmentof the policy shall be acknowledged by theinsurer.

(2) A savings association may invest itsfunds in loans for the payment of expensesof college or professional education if theloans are insured or guaranteed as providedby ORS 722.352 (2). For the purpose of thissubsection:

(a) “College education” means educationat an institution that provides an educationalprogram for which it awards a bachelor′s orhigher degree, or at an institution that pro-vides not less than a two-year program which

is acceptable for full credit toward such adegree.

(b) “Professional education” means anycourse of study or training designed to in-crease the ability of a person to obtain oradvance in employment of any kind. [1975 c.582§101; 1995 c.343 §70]

722.334 Secured and unsecured loansrelated to real property; advance of creditfor manufactured dwelling financing orhome construction; loans to certain sub-sidiaries. A savings association may investits assets in:

(1) Loans, with or without security, forthe alteration, repair or improvement of realproperty;

(2) Loans, with or without security, forthe equipping or furnishing of residentialproperty;

(3) Loans, advances of credit and thepurchase of obligations representing loansand advances of credit for the purpose of fi-nancing the sale or purchase of manufac-tured dwellings; and

(4) Advances of credit for the purpose offinancing the construction of residentialproperty.

(5) Loans to nonservice corporation sub-sidiaries not to exceed two percent of asso-ciation assets provided that the associationcontrols a majority of the shares of votingstock of the subsidiary. [1975 c.582 §102; 1979 c.863§9a]

722.335 [Repealed by 1959 c.227 §32]

722.336 Personal loans. A savings asso-ciation may make personal loans, secured orunsecured, evidenced by promissory notes.Each note shall require repayment in fullwithin a period not to exceed 10 years fromthe date of the note. An association shallnot, under this section, lend more than$20,000 to one individual at any one time.The aggregate amount of such loans shallnot exceed 10 percent of the assets of theassociation. [1975 c.582 §103; 1977 c.368 §1; 1979 c.863§10]

722.338 Loans to officer or employeeto purchase association stock. (1) A stockassociation may invest its assets in loans tothe employees, including officers, of the as-sociation and any wholly owned subsidiary,to enable them to purchase stock of the as-sociation or in a service corporation ownedby the association, but:

(a) The aggregate amount of such loansoutstanding at any one time shall not exceedone percent of its assets;

(b) The amount so loaned to any oneperson shall not exceed 90 percent of the fairmarket value or cost of the stock, whicheveris lower, at the time of the purchase;



(c) The association shall obtain or retaina security interest in the stock so acquireduntil the loan is paid in full;

(d) The maximum amount due on suchloans to one person at any one time shall notexceed $20,000; and

(e) The terms of the loan must providefor repayment within a period of not morethan 10 years.

(2) Except as provided by subsection (1)of this section, an association shall not loanany of its funds upon the security of its ownstock. [Formerly 722.424; 1979 c.863 §11]


722.342 Loans to directors, officersand persons related to them; conditions;exemptions; rules. (1) Except as providedby subsection (2) of this section, an associ-ation shall not directly or indirectly make aloan to or for the benefit or use of an indi-vidual, partnership, association or corpo-ration or subsidiary thereof if:

(a) Any officer or director of the lenderhas, or represents to the public to have, acontract or right to control or manage theborrower;

(b) Any officer or director of the lenderis the proprietor of or a partner in the bor-rower; or

(c) Twenty-five percent or more of thestock of the borrower is owned or controlled,by option or otherwise, by any one or moreof the officers or directors of the lender.

(2) An association may make any loan toa director or officer of the association thatis authorized under ORS 722.302 to 722.356.However, if the loan is made to an executiveofficer or director, all of the following condi-tions must be met:

(a) An independent appraiser shall beemployed by the lending association to ap-praise the security for the loan.

(b) The loan shall have the prior approvalof not less than two-thirds of the authorizedmembers of the board of directors and theapproval shall be entered in the minutes ofthe meeting at which the loan is approved.

(c) A director who is directly or indi-rectly interested in the loan shall fully dis-close to the other directors on the board ofthe lending association the director′s interestin the loan or in the borrower. The directorshall abstain from voting on the question ofapproval of the loan.

(d) The loan must be made under a writ-ten agreement.

(3) The directors of a savings association,if the association makes loans to its direc-

tors, officers or employees, shall establishwritten procedures for approving such loans.

(4) The Director of the Department ofConsumer and Business Services by rule mayexclude from the applicability of subsection(2) of this section any indebtedness for whichthe requirements of subsection (2) of thissection create, according to the director, anexcessive burden in regard either to thesavings association or to the borrower with-out an offsetting regulatory benefit.

(5) Notwithstanding the conditions de-scribed in subsection (2)(a), (b) and (c) of thissection, the directors of the lending associ-ation need not first approve a loan to anexecutive officer or director unless the loan,when aggregated with all other loans to theexecutive officer or director and to all re-lated interests of the executive officer or di-rector, as defined by ORS 722.458, exceeds$25,000. [1975 c.582 §105; 1979 c.863 §12; 1985 c.786 §59]



(General Provisions)722.352 Participation, insured or guar-

anteed loans. (1) A savings association mayparticipate with another lender or lenders inmaking loans of any type that an associationmay otherwise make, if the other lender oreach of the other lenders is:

(a) An instrumentality or agency of theUnited States or this state;

(b) Insured by the Federal Deposit Insur-ance Corporation;

(c) An insurance company supervised bya federal or state agency;

(d) A Federal Housing Administrationapproved mortgagee; or

(e) Another lender approved by the Di-rector of the Department of Consumer andBusiness Services.

(2) Without regard to any term or loan-to-security limitation provided by ORS722.302 to 722.356, a savings association maymake, buy and sell any loan, secured or un-secured, if the loan is insured or guaranteed.A loan shall be considered insured or guar-anteed if:

(a) It is insured or guaranteed in anymanner in part or in full by the UnitedStates or this state, or an instrumentalitythereof; or

(b) A commitment so to insure or guar-antee or a conditional guarantee has beenissued.

(3) A savings association may buy, sellor participate in the purchase or sale, withor without servicing, of all or a portion of



any loan or of a pool of loans which may beevidenced by a participation certificate,mortgage-backed bond or note, or mortgagepass-through certificate. The loans must beof a type eligible for origination and invest-ment under this chapter. If the association isa buyer, the originator and services mustqualify under subsection (1) of this section.[Formerly 722.422; 1979 c.863 §13; 1999 c.107 §15]

722.354 Maximum loans to one personor on one property; interest. (1) A savingsassociation shall lend no more than five per-cent of its total assets on the security of oneproperty or to one person. However, an as-sociation with assets under $500,000 maylend up to a maximum of $40,000 in loans onone property or to one person.

(2) ORS 708A.255 applies to interest orother charges a savings association or a fed-eral association may contract for and receivefor a loan or the use of money. [1975 c.582 §107;1977 c.791 §5; 1981 c.412 §5; 1981 c.472 §19; 1997 c.631§541]


722.356 Types of investments andloans limited; effect of unauthorized loanor investment; liability of officers. (1) Asavings association shall not make, purchaseor hold any investments or loans except in-vestments and loans of the kinds authorizedby ORS 722.302 to 722.356. However, a loanor investment made in violation of this sub-section shall be due and payable accordingto its terms and the obligation thereof shallnot be impaired.

(2) A director or officer of an associationwho knowingly violates, participates in orassents to a violation of, or who knowinglypermits any of the officers or agents of theassociation to violate, subsection (1) of thissection is liable individually for all lossesthat the association, its account holders orstockholders sustain in consequence of suchviolation.

(3) The Director of the Department ofConsumer and Business Services may requirea director or officer of an association whoknowingly violates, participates in or assentsto a violation of subsection (1) of this sec-tion, or who knowingly permits any officeror agent of the association to violate subsec-tion (1) of this section, to deposit with theassociation an indemnity bond, insurance orcollateral. Such deposit shall be of a kindand amount sufficient to indemnify the asso-ciation against losses that the association, itsaccount holders or stockholders may sustainin consequence of such violation. Theamount considered sufficient to indemnifythe association shall be determined by thedirector. When an unauthorized investmenthas been sold or disposed of without re-

course, the director shall direct all or thatpart of the indemnity remaining after de-ducting any loss to be released. When thebalance of an unauthorized loan has beenreduced to an amount which would permitthe loan to be made in accordance with ORS722.302 to 722.356, the director shall directthe indemnity to be released. In making adetermination under this section, the direc-tor may require an independent appraisal ofthe investment or the loan security.

(4) In addition to subsections (2) and (3)of this section, whenever the director deter-mines that an association has made an in-vestment or loan that is unsafe or unsound,or is not authorized by ORS 722.302 to722.356, the director may order the associ-ation to do one or both of the following:

(a) Dispose of the investment or loan; or(b) Establish a specific reserve not to ex-

ceed the book value of the investment or theunpaid balance of the loan and to maintainsuch reserve until the investment is disposedof or the loan is paid. [1975 c.582 §108]






722.385 [Repealed by 1969 c.591 §305]722.402 [1975 c.582 §109; repealed by 1985 c.762 §196]722.404 [1975 c.582 §110; repealed by 1985 c.762 §196]722.405 [Amended by 1969 c.138 §5; repealed by 1975

c.582 §152]722.406 [1975 c.582 §111; repealed by 1985 c.762 §196]722.407 [1969 c.138 §2; repealed by 1971 c.757 §18]

SUPERVISION AND ENFORCEMENT(Supervision)

722.408 Rules. (1) In accordance withORS chapter 183, the Director of the De-partment of Consumer and Business Servicesmay adopt rules for the purpose of carryingout this chapter.

(2) In addition to the notice requirementsof ORS chapter 183, before the directoradopts a rule, the director shall submit acopy of the rule to each savings association.[1975 c.582 §112; 1985 c.762 §63]

722.410 [Amended by 1959 c.227 §22; 1961 c.398 §29;1963 c.288 §9; 1969 c.138 §6; 1973 c.368 §6; repealed by1975 c.582 §152]

722.412 [1975 c.582 §113; repealed by 1985 c.762 §196]722.414 [1975 c.582 §114; 1981 c.472 §20; repealed by

1985 c.786 §70]722.415 [Amended by 1959 c.227 §23; 1961 c.398 §30;

1975 c.582 §100; renumbered 722.328]



722.416 Publication of statutes, rulesand opinions. The Director of the Depart-ment of Consumer and Business Servicesshall publish or revise at least once everytwo years, for distribution to savings associ-ations and such other persons as may be in-terested, this chapter and related statutes,together with rules adopted by the directorand decisions, opinions and rulings made re-garding any rule or section. The directormay fix and collect a reasonable charge, notto exceed the cost of publication, for copiesof such publications. [1975 c.582 §115; 1985 c.762§67]

722.419 Public inspection of records ofdepartment pertaining to this chapter;exemptions. (1) Except as provided in sub-sections (2) and (3) of this section, the re-cords of the Department of Consumer andBusiness Services pertaining to the adminis-tration of this chapter are available for pub-lic inspection unless the Director of theDepartment of Consumer and Business Ser-vices determines in the particular instancethat the public interest in disclosure of therecords is outweighed by the interests of anassociation or its directors, officers, em-ployees, members and customers in keepingthe records confidential, or that the recordsare exempt from disclosure under ORS192.501 to 192.505. A determination by thedirector under this subsection is subject toreview under ORS 192.410 to 192.505.

(2) Except as provided in subsections (6)and (7) of this section, the following recordsof the department pertaining to the adminis-tration of this chapter are exempt from dis-closure or production and shall be treated asconfidential as provided in ORS 705.137:

(a) Examination reports and work papers,directives, orders and correspondence thatrelate to examination reports.

(b) Investigatory information concerningpersons subject to investigation by the direc-tor under ORS 722.024, 722.026, 722.036,722.134, 722.459 or 722.506, and financialstatements of such persons.

(c) Proprietary information.(d) Audits submitted to the director un-

der ORS 722.434 (3).(e) Reports submitted to the director un-

der ORS 722.458.(f) Stockholder lists.(g) The name of a depositor or debtor de-

scribed in subsection (3) of this section andthe amount of the person′s deposit or debt.

(3) The director or any other person em-ployed by the department and acting underthis chapter shall not knowingly disclose thename of any person who is a depositor ordebtor of an association, or the amount of

the person′s deposit or debt, except that thedirector or the employee may disclose suchinformation as may be necessary in the per-formance of the director′s or employee′s offi-cial duty including any duty under ORS295.018.

(4) Statements of financial condition filedunder ORS 722.434 (1) are not confidential.

(5) A civil penalty imposed by the direc-tor shall become subject to public inspectionafter the 20th day after the director imposesthe civil penalty.

(6) Notwithstanding subsection (2) of thissection, the director may disclose any recordof the section specified in this subsectionpertaining to an association that has beenliquidated if the director determines in theparticular instance that the public interestin disclosure of the record outweighs the in-terests of the association or its directors,stockholders, officers, employees or custom-ers in keeping the record confidential. Underno circumstances, however, shall the directordisclose any such record or portion thereofthat contains any proprietary information orany information relating to the individual fi-nancial activities or affairs of persons unlessthe director concludes that those activitiesor affairs were a direct and substantial con-tributing factor in the failure of the associ-ation. This subsection applies to thefollowing records of the section:

(a) Examination reports and work papers,directives, orders and correspondence relat-ing to examination reports;

(b) Investigatory information concerningpersons subject to investigation by the direc-tor under ORS 722.024, 722.026, 722.036,722.134, 722.459 or 722.506;

(c) Audits submitted to the director un-der ORS 722.434 (3); and

(d) Reports filed under ORS 722.458.(7) Notwithstanding ORS 40.270, an offi-

cer of the department may be examined con-cerning records that are exempt fromdisclosure under subsection (1), (2) or (3) ofthis section and the records are subject toproduction if the court before which a civilor criminal action is pending finds that suchexamination and production is essential forestablishing a claim or defense. In making afinding under this subsection, if the courtviews the records, the court shall do so incamera.

(8) In addition to the authority grantedthe director in ORS 705.137, all records ofthe department pertaining to the conditionof associations may be furnished to:

(a) Representatives of savings and loandepartments of other states.



(b) Representatives of the Federal Hous-ing Finance Board, Washington, D.C., a Fed-eral Home Loan Bank or other federal orstate financial agency organized under thelaws of the United States or of this state andauthorized to loan to or otherwise act as areserve or insuring agency for savings asso-ciations.

(c) The State Treasurer if the associationis a depository of public fund deposits.

(9) If the director is requested to discloseany record subject to this section and therecord contains both material that is exemptfrom disclosure under this section or anyother provision of law and material that isnot exempt from disclosure, the directorshall separate the exempt and nonexemptmaterial and shall disclose only the nonex-empt material. [1985 c.786 §60; 1985 c.762 §66a; 1987c.373 §58; 1999 c.107 §7; 2001 c.377 §24]


722.422 [1963 c.288 §10; 1975 c.582 §106; renumbered722.352]

722.424 [1967 c.257 §2; 1975 c.582 §104; renumbered722.338]



722.432 Communications from direc-tor; notices generally. (1) Every approvalor rejection by the Director of the Depart-ment of Consumer and Business Servicesgiven pursuant to this chapter and everycommunication having the effect of an orderor instruction to any association shall be:

(a) In writing, signed by the director;(b) Mailed to the affected association,

addressed to the president at the principaloffice of the association; and

(c) Presented to the board of directors ofsuch association at its next regular meetingor at a special meeting called for such pur-pose and noted in the minutes of the meet-ing.

(2) All notices required by this chaptershall be in writing. All notices issued or re-quired to be issued by the director shall besent by mail and shall become effective upondeposit of the notice in the mail. [1975 c.582§116]

722.434 Financial statements and au-dits. (1) Every savings association shall, onJanuary 1 of each year, or within 30 daysthereafter, file with the Director of the De-partment of Consumer and Business Servicesa full detailed statement of its financial con-dition on the last day of the preceding monthand of the business transacted during thepreceding year. The statement shall be veri-fied and shall set forth the amount and the

character of its assets and liabilities andshall contain such other information and bein such form as the director may prescribe.

(2) The director may require additionalstatements from any or all associations, asof the close of business at any date. The di-rector shall allow not less than 10 days inwhich to prepare and file a report under thissubsection.

(3) Every savings association shall onceeach year cause an audit to be made of itsfinancial condition by an independent audi-tor. A copy in full of the audit required bythis subsection, and of any other audit madeby an association, with findings of the audi-tor and all statements, comments and recom-mendations made by the auditor on the audit,shall be filed with the director forthwith butnot later than 120 days after the last day ofthe period audited. The director shall reviewall audits and reports and may approve orreject any report, in whole or in part.[Formerly 722.165]


722.436 Examinations by director; re-port; examination program with federalregulators; acceptance of federal or otherstate examinations. (1) Except as providedunder subsections (4) and (5) of this section,every two years, or more often if the Direc-tor of the Department of Consumer andBusiness Services considers it advisable, thedirector, either in person or through an ex-aminer, shall make an examination of thebooks, records and affairs of every domesticand foreign association.

(2) The examiner shall prepare a reportof the examiner′s findings and file it with thedirector. The examiner shall include in thereport any violation of law or any unauthor-ized or unsafe practices of the associationdisclosed by the examination.

(3) The director shall furnish a copy ofthe report to the association examined and,upon request, may furnish a copy of or ex-cerpts from the report to the Federal Hous-ing Finance Board, Federal Home Loan Bankor other federal or state agency authorizedto loan to or otherwise act as an insuringagency for savings and loan associations.When the director furnishes a copy of a re-port of an association to an agency underthis subsection, the director shall imme-diately inform the association of the agencymaking the request and the part of the re-port furnished.

(4) The director may participate in anyprogram offered by the Federal Housing Fi-nance Board, a Federal Home Loan Bank orthe Federal Deposit Insurance Corporationthat provides for joint alternate examinationsof savings associations by the director and



the Federal Housing Finance Board, a Fed-eral Home Loan Bank or the Federal DepositInsurance Corporation.

(5) Instead of performing an examinationunder subsection (1) of this section, the di-rector may accept an examination or reportmade by the Federal Housing Finance Boardor a Federal Home Loan Bank or by theregulator of savings associations in anotherstate. [1975 c.582 §118; 1981 c.472 §21; 1985 c.762 §68;1985 c.786 §61; 1987 c.373 §58a; 1991 c.67 §192; 1999 c.107§8]

722.438 Extended audit, examinationor revaluation; payment of costs. (1) If inthe opinion of the Director of the Depart-ment of Consumer and Business Services theexamination conducted under ORS 722.436fails to disclose the true financial conditionof an association, the director may in orderto ascertain its true financial condition:

(a) Make an extended audit or examina-tion of the association or cause such an au-dit or examination to be made by anindependent auditor.

(b) Make an extended revaluation of anyof the assets or liabilities of the associationor cause an independent appraiser to makesuch a revaluation.

(2) The director shall collect from theassociation a reasonable sum for actual andnecessary expenses of such an audit, exam-ination or revaluation. [1975 c.582 §119]

722.440 [Repealed by 1975 c.582 §152]

722.442 Right of access to books andrecords of association; authority to issuesubpoenas, administer oaths and examinewitnesses. (1) Except as provided by ORS40.225 to 40.295, the Director of the Depart-ment of Consumer and Business Services andany of the examiners, auditors and appraisersof the Department of Consumer and BusinessServices:

(a) Shall have free access to all booksand records of an association, its subsidiariesand affiliates, that relate to its business, andthe books and records kept by any officer,agent or employee, relating to or upon whichany record of its business is kept;

(b) May subpoena witnesses and adminis-ter oaths or affirmations in the examinationof any director, officer, agent or employee ofan association, its subsidiaries or affiliatesor of any other person in relation to its af-fairs, transactions and conditions; and

(c) May require the production of re-cords, books, papers, contracts and otherdocuments.

(2) Each witness who appears before thedirector under a subpoena shall receive thefees and mileage provided for witnesses inORS 44.415 (2).

(3) If a person fails to comply with asubpoena so issued or a party or witness re-fuses to testify on any matters, the judge ofthe circuit court for any county, on the ap-plication of the director, shall compel obedi-ence by proceedings for contempt as in thecase of disobedience of the requirements ofa subpoena issued from such court or a re-fusal to testify in such court. [1975 c.582 §120;1981 c.892 §97; 1985 c.762 §69; 1989 c.980 §20]

722.444 Appraisal of association prop-erty by director. (1) The Director of theDepartment of Consumer and Business Ser-vices may cause property owned by an asso-ciation or securing the loans of anassociation to be appraised when, in con-nection with an examination or otherwise,information with respect to any property orpolicies, practices, operating results andtrends of an association give evidence that:

(a) Any appraisal or valuation of the as-sociation may be excessive or overstated; or

(b) Appraisal policies and practices maynot conform with generally accepted profes-sional standards.

(2) In lieu of causing such appraisals tobe made, the director may accept an ap-praisal caused to be made by a Federal HomeLoan Bank, the Federal Housing FinanceBoard or by the Federal Deposit InsuranceCorporation or other insuring agency of aninsured association.

(3) Unless otherwise ordered by the di-rector, appraisal of property pursuant to thissection shall be made by an appraiser se-lected by the director. The cost of such ap-praisal shall be paid promptly by theassociation directly to the appraiser uponreceipt by the association of a statement ofthe cost approved by the director. The direc-tor shall furnish a copy of the report of anappraisal made pursuant to this section tothe association forthwith but no later than60 days following the completion of the ap-praisal and may furnish a copy to the insur-ing agency. [1975 c.582 §121; 1999 c.107 §9]


722.446 Authority to establish branchfacility; approval of director required tochange location of branch or principaloffice; applicability of ORS 722.448 and722.452. (1) The board of directors of asavings association may, with the approvalof the Director of the Department of Con-sumer and Business Services, establish abranch facility. An association shall notchange the location of a branch facility orthe principal office of the association withoutprior notice to and approval of the director.

(2) Except for the filing fee required un-der ORS 722.448, ORS 722.448 and 722.452



shall not apply to a change of location of anexisting branch facility or principal officewhen the distance involved is less than onemile, nor shall ORS 722.448 and 722.452 applyto the establishment of a drive-in facility oran automatic teller machine within 500 feetof an existing branch facility or principal of-fice as an adjunct to the branch facility orprincipal office. [1975 c.582 §122; 1981 c.472 §22]

722.448 Application for approval to es-tablish branch or change location ofbranch; notice and hearing. (1) When asavings association wants to establish a newbranch facility, or change the location of abranch facility or its principal office, it shallsubmit to the Director of the Department ofConsumer and Business Services an applica-tion for approval of the branch or thechange. An application shall state the com-munity where the branch or principal officeis to be located or relocated and such otherinformation as the director requires to de-termine if the establishment or change of thebranch facility or principal office will servethe public convenience and advantage.

(2) Upon receipt of an application withthe proper filing fee the director shallpromptly examine and investigate whetherthe application should be granted. The direc-tor shall proceed in accordance with ORS722.024 (1) to (4) to give notice and to con-duct a hearing, if requested. [1975 c.582 §123]


722.452 Approval of branch applica-tion; right to hearing if approval denied;list of branch facilities. (1) The Director ofthe Department of Consumer and BusinessServices shall approve an application filedunder ORS 722.448 if:

(a) The population in the communitywhere the branch facility or principal officeis to be located, relocated or operated affordsa reasonable promise of adequate support forthe branch facility or principal office;

(b) The financial structure and earningsof the association are adequate to supportthe expense of establishing the branch or re-locating the branch or principal office; and

(c) The establishment and operation ofthe branch facility or relocation of thebranch or principal office will serve the pub-lic convenience and advantage.

(2) If an application is denied, the ordershall contain a statement of the reason forthe denial and notify the applicant of itsright to a contested case hearing under ORSchapter 183.

(3) If an association does not commenceoperation of a branch facility or change thelocation of a branch facility or the principaloffice within a reasonable time after the date

of the order approving the application, theapproval shall be revoked by the director.

(4) The director shall maintain a recordof the number and location of all branch fa-cilities of associations. [1975 c.582 §124; 1985 c.762§70]

722.454 Discontinuance of branch; re-vocation of approval by director. (1) Theboard of directors of an association, afternotice to the Director of the Department ofConsumer and Business Services, may dis-continue the operation of a branch facility.The association shall keep the director in-formed in the matter and deliver to the di-rector a certificate of the date operation ofthe branch facility is discontinued.

(2) The director may for good cause re-voke approval of the operation of a branchfacility by written notice to the association.The notice shall fix a reasonable time afterwhich the association shall cease to operatethe branch facility. [1975 c.582 §125]


722.456 Director to be notified of cer-tain illegal acts. The Director of the De-partment of Consumer and Business Servicesshall be notified promptly, and in writing,stating the facts whenever it is establishedthat fraud, embezzlement, or misappropri-ation of funds or other illegal acts exists, orapparently exists and is being investigatedby the association due to dishonesty of a di-rector, officer, attorney, agent or employeeand the sums involved exceed or could ex-ceed $500. [1979 c.863 §15]

722.457 Giving false document, state-ment or report prohibited. A person maynot knowingly give or cause to be given tothe Department of Consumer and BusinessServices any document or any oral or writtenstatement or report that is false in any ma-terial respect, in the course of any investi-gation, examination or audit by thedepartment. [1987 c.215 §2]

722.458 Records of extensions of creditby domestic associations; rules. (1) As re-quired by rule of the Director of the Depart-ment of Consumer and Business Services,each domestic association shall file with thedirector each calendar quarter a report ofoutstanding extensions of credit by the do-mestic association to the following personsas of the last day of the immediately preced-ing calendar quarter:

(a) The managing officer and each direc-tor of the domestic association and, if theassociation is a stock association, each prin-cipal shareholder of the association.

(b) Each related interest of each persondescribed in paragraph (a) of this subsection.



(2) The report shall show for each bor-rower the borrower′s position or class, theoriginal amount of each outstanding exten-sion of credit, the balance due on each out-standing extension of credit and whether anypayment or portion of the balance is cur-rently past due.

(3) For purposes of this section:(a) A principal shareholder of a stock as-

sociation or of a business entity described inparagraph (b)(A) of this subsection is anyperson who, directly or indirectly or actingthrough or in concert with one or more per-sons, owns, controls or has the power to votemore than 25 percent of any class of votingstock of the association or business entity.For purposes of this paragraph, a “businessentity” includes but is not limited to a cor-poration, partnership, trust, soleproprietorship, association or labor union.

(b) A related interest of a person de-scribed in subsection (1) of this section in-cludes either of the following:

(A) Any business entity described in par-agraph (a) of this subsection in which theperson is a director, partner, principalshareholder, officer, sole owner or trustee.

(B) A borrower whose extension of creditis cosigned or indorsed by a director, man-aging officer or principal shareholder of adomestic association.

(c) An extension of credit is a making ofa loan, a granting of a line of credit or anyother manner of credit extended to a person.

(4) The director shall adopt rules govern-ing the submission of reports under subsec-tion (1) of this section. The director mayrequire any other information in the reportsthat the director decides is necessary. Thedirector may exclude from the reporting re-quirement:

(a) Any advance payment against accruedsalary or other accrued compensation, or anadvance for the payment of expenses in-curred or to be incurred on behalf of the do-mestic association.

(b) Indebtedness, to a maximum set bythe director, that arises by reason of anygeneral arrangement by which a domesticassociation acquires charge or time creditaccounts, or makes payments to or on behalfof participants in a credit card plan, checkcredit plan, interest-bearing overdraft creditplan or any similar open-end credit plan.

(c) Any other indebtedness that the di-rector declares by rule not to be subject tothe reporting requirements under subsection(1) of this section. The director may excludeany indebtedness under this paragraph thereporting of which, according to the director,

is not necessary for proper supervision ofsavings associations or creates an excessiveburden without an offsetting regulatory ben-efit.

(5) The director may require a domesticassociation to file additional reports underthis section more often than quarterly, as thedirector determines is necessary. [1985 c.786§58]

722.459 Investigation of new director,president and managing officer; finger-printing; disapproval of election or ap-pointment. (1) After a certificate ofauthority to commence business has been is-sued to a savings association, before a personfirst takes office as director, president ormanaging officer, the name of the personshall be submitted to the Director of the De-partment of Consumer and Business Services,with any information about the person thatthe director may require.

(2) The director shall investigate eachperson whose name is submitted under thissection to determine the character, honesty,financial responsibility and competence ofthe person. In the course of investigating anyperson under this section, the director mayrequire the person to provide additional in-formation for the director′s further inquiry.For the purpose of such further inquiry, thedirector may require the person to submit tofingerprinting. Fingerprints acquired underthis subsection may be submitted to appro-priate law enforcement agencies, includingthe Federal Bureau of Investigation, for thepurpose of discovering any unlawful activ-ities of the person.

(3) The director may disapprove theelection or appointment of the person if thedirector determines that the person′s charac-ter, honesty, financial responsibility, experi-ence or fitness does not command confidenceor warrant the belief that the person willhonestly and efficiently conduct the businessof the savings association. The director shallissue the disapproval in writing to the boardof directors that submitted the person′sname. A copy of the disapproval shall beserved personally or by certified mail uponthe disapproved person. The disapproval maybe issued without a prior administrativehearing. A disapproval under this sectionmust be made within 30 days after the nameis submitted to the director. Thereafter, dis-approval may be made only as provided inORS 722.468.

(4) A person whom the director disap-proves under this section may appeal thedisapproval as a contested case pursuant toORS 183.415 to 183.500. [1985 c.786 §57]




(Enforcement)722.462 Enforcement generally; au-

thority to require specific reserves. (1)The Director of the Department of Consumerand Business Services may institute such ac-tions or other lawful proceedings as the di-rector may consider necessary for theenforcement of this chapter or any rule, or-der or action adopted, issued or taken by thedirector pursuant to law.

(2) If the director, from any informationavailable to the director, finds that an asso-ciation has either overstated its assets orunderstated its liabilities, the director mayorder the association to establish specific re-serves equal in amount to the overstatementof true assets or the understatement of trueliabilities. Such specific reserves shall becarried as liabilities. [1975 c.582 §126]

722.464 Cease and desist orders. (1) Onany of the following grounds, the Director ofthe Department of Consumer and BusinessServices may issue and serve upon an asso-ciation or a director, officer, employee oragent of an association an order to cease anddesist from an unsafe or unsound practice ora violation if:

(a) The director has reasonable cause tobelieve that the person to whom the order isdirected is engaging, has engaged or is aboutto engage in an unsafe or unsound practicein conducting the business of the association.

(b) The director has reasonable cause tobelieve that the person to whom the order isdirected is violating, has violated or is aboutto violate a law or rule, an order of the di-rector or any provision of the articles of in-corporation or bylaws of the association.

(2) An order under subsection (1) of thissection shall include the following:

(a) A statement of the facts constitutingthe alleged unsafe or unsound practice or vi-olation.

(b) A provision requiring the personnamed in the order to cease and desist fromthe practice or violation. The provision maybe mandatory or otherwise.

(c) The effective date of the order.(d) A notice to the person named in the

order of the right to a contested case hearingunder ORS chapter 183.

(3) When the unsafe or unsound practiceor the violation specified in the order, or thecontinuation of the practice or violation, islikely to prejudice the interest of the accountholders or stockholders of an association, thedirector may issue an order effective imme-diately or at a later date. In all other cases,the order shall be effective 30 days after thedate of the order unless the person named inthe order requests a hearing thereon.

(4) An order remains in effect until it iswithdrawn by the director after a hearing orby a court order. [1975 c.582 §127; 1985 c.762 §71;1987 c.215 §3; 1987 c.373 §59]


722.466 [1975 c.582 §128; 1983 c.696 §28; 1985 c.762§72a; 1985 c.786 §63; 1987 c.373 §60; 1991 c.734 §96; re-numbered 722.991 in 2001]

722.468 Removal of association officeror employee. (1) The Director of the De-partment of Consumer and Business Servicesshall immediately inform the board of direc-tors of an association and may order thesuspension or discharge of an officer or em-ployee of the savings association, if the di-rector finds that the officer or employee has:

(a) Directly or indirectly willfully mis-represented the association, its types of ser-vice, its contracts or membership toprospective members, stockholders, depos-itors or borrowers;

(b) Engaged in dishonest practices in theconduct of the association′s business; or

(c) Been convicted of a misdemeanor, anessential element of which is fraud, or of afelony.

(2) The board of directors of the associ-ation, as well as any officer or employee ad-dressed in an order issued under this section,may request a contested case hearing pursu-ant to ORS chapter 183.

(3) An officer who is suspended or re-moved under this section shall not act in anyofficial capacity, conduct any of the businessof the association or have access to thebooks, records or assets of the associationeither as an officer, director or stockholder,without receiving permission from the direc-tor. [Formerly 722.225; 1977 c.166 §4; 1985 c.762 §73]


722.472 [1975 c.582 §130; repealed by 1985 c.762 §196]

(Conservatorship)722.474 Appointment of conservator;

duties; compensation. (1) The Director ofthe Department of Consumer and BusinessServices may appoint a conservator for anassociation if the director, as a result of anyexamination or from any report made to thedirector, reasonably believes that the publicinterest will be served by the appointment ofa conservator and if the director finds thatthe association:

(a) Is in an impaired condition;(b) Is engaging in practices that threaten

to result in an impaired condition;(c) Is in violation of an order of the di-

rector issued under this chapter and the or-



der has become final by operation of law oron appeal; or

(d) Is in violation of an injunction issuedunder this chapter.

(2) The conservator may be the director,an examiner or any other person. Upon theappointment of a conservator, the directorshall apply immediately to the circuit courtfor the county in which one or more officesof the association is located for confirmationof the appointment and proceedings in ac-cordance with this section. The court shallconfirm the appointment if it finds that oneor more grounds exist for the appointment.In conservatorship proceedings the circuitcourts have full power to conserve the assetsand business of the association or to liqui-date and dissolve the association.

(3) If the association is an institution in-sured by a federal agency, the agency or anappointee of the agency may be tendered ap-pointment as conservator or co-conservator.If the agency or appointee accepts the ap-pointment, it may, nevertheless, make loanson the security of, or purchase at public orprivate sale, any part or all of the assets ofthe association of which it is conservator orco-conservator, if such loan or purchase isapproved by the court.

(4) A conservator shall endeavorpromptly to remedy the situations com-plained of by the director in the applicationfor confirmation of such appointment. Withinsix months after the date of the appointment,or within a reasonable time thereafter if thecourt extends the six months′ period:

(a) The conservator shall return the as-sociation to the board of directors thereofand thereafter it shall be managed and oper-ated as if no conservator had been appointed;or

(b) The conservator shall proceed to liq-uidate and dissolve the association.

(5) If the director or an examiner is ap-pointed conservator, the director or examinershall receive no additional compensation.However, if another person is appointed,then the compensation of the conservator, asdetermined by the court, shall be paid by theassociation.

(6) For purposes of this section, “im-paired condition” means a condition in whichthe assets of a savings association in the ag-gregate do not have a fair value equal to theaggregate amount of liabilities of the associ-ation to its creditors plus an amount equalto the minimum general reserve requiredunder ORS 722.142. Liabilities to creditorsinclude savings liabilities, capital notes anddebentures and liabilities to all other per-sons. [1975 c.582 §131; 1985 c.762 §74]

722.475 [Repealed by 1975 c.582 §152]

722.476 Powers of conservator. (1) Aconservator may take immediate possessionand control of the property and affairs of anassociation and act to protect the interest ofthe members, account holders and othercreditors and stockholders. A conservatorhas all the rights, powers and privileges ofthe officers, the board of directors and themembers of the association, including thepower to liquidate and dissolve the associ-ation. A conservator has the power and au-thority provided by this chapter and suchother power and authority as may be ex-pressed in the order of the court.

(2) The directors and officers shall re-main in office and the employees shall re-main in their respective positions, but theconservator may remove any officer or em-ployee, if the order of removal of an officeris approved in writing by the Director of theDepartment of Consumer and Business Ser-vices.

(3) While an association is in the chargeof a conservator, the association shall con-tinue to take payments in accordance withthe terms and conditions of contracts. Theconservator, in the discretion of the conser-vator, may permit account holders to with-draw their accounts from the associationpursuant to the provisions of this chapter orunder and subject to such rules as the direc-tor may prescribe. A conservator may acceptsavings accounts and additions to savingsaccounts, but any such amounts received bythe conservator shall be segregated if the di-rector so orders in writing. If so ordered,such amounts shall not be subject to offsetand shall not be used to liquidate any in-debtedness of the association existing at thetime the conservator was appointed for it orany subsequent indebtedness incurred for thepurposes of liquidating any such indebted-ness. All expenses of the association duringa conservatorship shall be paid by the asso-ciation. [1975 c.582 §132]

722.478 Acquiring possession of con-tents of safety deposit vaults, safes andboxes. (1) The Director of the Departmentof Consumer and Business Services may, af-ter the director has taken possession of theproperty and business of a domestic or for-eign savings association under ORS 722.474to 722.484, apply to the circuit court of thecounty in which the conservatorship pro-ceedings are pending, for an order directingthe director to cause any safe, safety vaultor safety deposit box held anywhere by suchassociation to be thereafter opened and thecontents listed. A safe, vault or box shall beopened in the presence of:

(a) The director or an examiner;



(b) A notary public not an officer of or inthe employ of such association or of thesavings and loan office; and

(c) An officer of the association, if avail-able.

(2) One signed copy of the list of thecontents of the safe, vault or box shall bedelivered to the director; a second signedcopy shall be retained by the notary public;and a third signed copy shall be delivered tothe officer of the association.

(3) The contents shall be enclosed in acontainer distinctly marked by the notarypublic and delivered to the director. Thecontainer shall be kept by the director in thecustody of the director and control for use inthe administration of the affairs of thesavings association, as provided by law. Thecontents shall be held subject to the paymentof any rent that may be unpaid for the useof such safe, vault or box, also any expensesincurred in opening thereof, and also reason-able compensation for the safekeeping of thecontents after their removal from the safe,vault or box. [Formerly 722.785]


722.482 Contest of conservatorship ap-pointment by association officers. A di-rector or officer of an association in officeat the time of the initiation of a proceedingunder ORS 722.474 may contest the proceed-ing and shall be reimbursed for reasonableexpenses and attorney fees by the associationor from its assets. A court having such aproceeding before it shall allow and orderpaid reasonable expenses and attorney feesfor such directors and officers. [1975 c.582 §134]

722.484 Correction of allegedwrongdoings by unimpaired association.A conservator shall not be appointed, or pri-vate property seized under this chapter,when any association is not in an impairedcondition as defined in ORS 722.474 if thealleged wrongdoing can be otherwise cor-rected as provided by this chapter or byother law. [1975 c.582 §135; 1985 c.762 §75]

722.485 [Repealed by 1975 c.582 §152]



722.497 [1971 c.757 §17; 1975 c.582 §93; renumbered722.306]

722.498 [1973 c.288 §5 (enacted in lieu of 722.499);repealed by 1975 c.582 §152]

722.499 [1971 c.104 §2; repealed by 1973 c.288 §4(722.498 enacted in lieu of 722.499)]

FOREIGN ASSOCIATIONS722.502 Certificate of authority re-

quired to transact business in Oregon. Aforeign association shall not transact savingsand loan business in this state unless it re-ceives from the Director of the Departmentof Consumer and Business Services a certif-icate of authority to do so. [1975 c.582 §136; 1981c.472 §23]

722.504 Application for certificate ofauthority; payment of filing fee. A foreignassociation may apply to the Director of theDepartment of Consumer and Business Ser-vices for a certificate of authority to transactbusiness in this state. With such applicationit also shall pay the proper filing fee and file:

(1) A copy of its articles of incorporationand bylaws certified as a true copy by thepublic officer or association officer havingcustody of the original articles or bylaws;

(2) Evidence satisfactory to the directorthat its savings accounts are insured by theFederal Deposit Insurance Corporation orother insurer as required by ORS 722.048;

(3) A designation of the community inwhich the principal office within this stateshall be located; and

(4) Other information the director mayrequire. [1975 c.582 §137; 1981 c.472 §24; 1999 c.107 §16]

722.505 [Repealed by 1975 c.582 §152]

722.506 Issuance of certificate to for-eign association. (1) The Director of theDepartment of Consumer and Business Ser-vices shall issue a certificate of authority tothe association to conduct savings and loanbusiness in this state when:

(a) A foreign association has compliedwith ORS 722.504;

(b) The director has examined and inves-tigated according to the procedures set forthin ORS 722.024 (1) to (4), whether the appli-cation of the association should be granted;and

(c) The director has verified the financialstatus of the association by examination ofits assets and its records for the purpose ofascertaining whether they meet the require-ments of this chapter.

(2) Notwithstanding subsection (1) of thissection, the director shall not issue the cer-tificate under subsection (1) of this sectionunless:

(a) The director is satisfied that the as-sociation is in sound financial condition, andthat it is conducting its business, and willconduct its business in this state in a man-ner consistent with the laws of this state;

(b) The director regards the associationas safe, reliable and entitled to public confi-dence;



(c) The association pays the proper an-nual fee; and

(d) The director finds that the appropri-ate standards for approval of the applicationset forth in ORS 722.026 are satisfied.

(3) The certificate of authority continuesin effect unless revoked as authorized byORS 722.516. [Formerly 722.835; 1981 c.472 §25]

722.508 Law applicable to contracts.Any contract made by a foreign savings as-sociation with any person who is residing inor a foreign corporation authorized to dobusiness in this state, shall be considered anOregon contract, and shall be construed ac-cording to the laws of this state. [Formerly722.845]


722.512 Applicability of Business Cor-poration Act. Except as otherwise providedby ORS 722.502 to 722.516, a foreign associ-ation shall comply with the provisions ofORS 57.655 to 57.745 (1985 Replacement Part)governing the admission of foreign corpo-rations to transact business in this state.[1975 c.582 §140; 1987 c.197 §22]

722.514 Prohibition against operationof certain foreign associations; exception;prohibition against savings and loanbusiness by entity based in foreign coun-try. (1) Except as provided in subsection (2)of this section, when the laws, regulationsor administrative actions of any other stateor any territory of the United States prohibitor unfairly impede an Oregon savings associ-ation from transacting business in the stateor territory, then the savings associations ofthe other state or territory are prohibitedfrom transacting business in this state, in-cluding but not limited to the establishmentof new branch facilities.

(2) Subsection (1) of this section shall notgovern the transaction of a savings and loanbusiness in this state by an association ofanother state or territory if ORS 722.072 au-thorizes the transaction.

(3) Associations or comparable corpo-ration or business entities headquartered ina foreign country are prohibited from trans-acting a savings and loan business in thisstate. [1975 c.582 §141; 1981 c.472 §26; 1985 c.798 §5]


722.516 Revocation of certificate ofauthority. In the manner specified for issu-ance of an order under ORS 722.464, the Di-rector of the Department of Consumer andBusiness Services may revoke a certificateof authority of a foreign association if:

(1) The association fails to conduct itsbusiness in this state in a manner consistentwith the laws of this state;

(2) The affairs of the association are inan unsafe condition;

(3) The association refuses to permit ex-amination of the financial condition of theassociation by the director; or

(4) The association fails to pay the properannual fee. [1975 c.582 §142; 1987 c.215 §5]





722.540 [Repealed by 1959 c.227 §32]722.545 [Amended by 1961 c.398 §41; repealed by

1975 c.582 §152]722.550 [Repealed by 1975 c.582 §152]722.555 [Amended by 1961 c.398 §42; repealed by



1975 c.582 §152]722.570 [Repealed by 1975 c.582 §152]722.575 [Amended by 1961 c.398 §45; repealed by

1975 c.582 §152]722.580 [Repealed by 1975 c.582 §152]722.585 [Repealed by 1975 c.582 §152]722.590 [Amended by 1961 c.398 §46; repealed by


1975 c.582 §152]722.600 [Repealed by 1975 c.582 §152]

FEES AND CHARGES722.602 Filing fees; charges for exam-

inations. (1) The Director of the Departmentof Consumer and Business Services shallcharge and collect fees for filing:

(a) An application for a certificate of in-corporation, $500 payable by theincorporators.

(b) An application for approval to estab-lish a branch facility, $200, or to change thelocation of the principal office or a branchfacility, $100.

(c) Proposed amendments to bylaws orarticles of incorporation for approval, $50.

(d) An application by a foreign associ-ation for a certificate of authority, $500.

(e) An application for approval of amerger, consolidation, exchange of shares orsale of assets, $500 payable by the associ-ations involved.

(f) An application for approval of a dis-solution, $500.

(g) An application by a domestic associ-ation for approval of a conversion, $500.



(h) An application by a foreign or federalassociation or a savings bank for approval ofa conversion, $500.

(2) No part of a fee paid under subsection(1) of this section shall be refunded if theapplication is denied or approval is refused.

(3) The director may by rule establishcharges to be collected from associations forexaminations conducted under ORS 722.438.[1975 c.582 §143; 1983 c.717 §37]

722.604 [1975 c.582 §144; repealed by 1985 c.762 §196;1985 c.786 §69]


722.606 Annual fees paid by savingsassociations. (1) Each savings associationshall pay to the Director of the Departmentof Consumer and Business Services eachyear the fee determined by reference to theschedule adopted by the director under ORS705.620. The fee shall be paid by the date setby the director in the rule establishing theschedule.

(2) In addition to any fee collected underthis section, whenever the director devotesany extra attention to the affairs of a savingsassociation, either upon determination by thedirector or upon request of the savings asso-ciation, the fee for the extra service shall bethe actual cost thereof. [1985 c.762 §76; 1987 c.171§5; 1987 c.373 §61]


722.615 [Repealed by 1975 c.582 §152]722.620 [Repealed by 1975 c.582 §152]722.625 [Amended by 1961 c.398 §50; repealed by


1975 c.582 §152]722.635 [Amended by 1961 c.398 §52; 1971 c.743 §420;

repealed by 1975 c.582 §152]722.640 [Amended by 1971 c.743 §421; repealed by


1975 c.582 §152]722.650 [Amended by 1973 c.368 §8; repealed by 1975

c.582 §152]

MISCELLANEOUS722.652 Effect of laws on existing as-

sociations. (1) Savings associations formedor existing on January 1, 1976, shall not beimpaired by the enactment of the SavingsAssociation Act, by any change in the re-quirements for the formation of associationsor by any amendment or repeal of the lawsunder which they were formed or created.Except as otherwise expressly provided, theSavings Association Act shall not affect anyliability or penalty incurred under the pro-visions of such laws prior to repeal.

(2) All obligations of an existing savingsassociation contracted prior to January 1,1976, are enforceable by the association. Anyliability, penalty, demand, claim and right ofaction against such an association may beenforced against it as fully and completelyas it might have been enforced prior to Jan-uary 1, 1976.

(3) Proceedings commenced pursuant tostatutes repealed by section 152, chapter 582,Oregon Laws 1975, shall be terminated, com-pleted or enforced pursuant to the provisionsof such statutes which for such purpose shallremain in full force and effect as to suchproceedings. [1975 c.582 §145]

722.654 Reserve fund associations re-designated stock associations. A reservefund association formed under the laws ofthis state and existing on January 1, 1976,shall be known as a stock association afterJanuary 1, 1976. After January 1, 1976:

(1) All reserve fund stock of such an as-sociation shall be known as capital stock andshall be considered part of the stated capitalof such an association.

(2) All persons owning reserve fundshares of such an association shall be con-sidered stockholders of such an association.[1975 c.582 §146]

722.656 Certain outstanding shares,share accounts and investment certif-icates considered savings accounts. AfterJanuary 1, 1976, any shares, share accounts,passbook accounts, certificates and invest-ment certificates (except reserve fund stock)that an association subject to the SavingsAssociation Act has issued and which isoutstanding on January 1, 1976, shall beconsidered a savings account as defined byORS 722.004; and the holder thereof shallhave all the rights and privilegesappertaining to the holder of a savings ac-count under the Savings Association Act aswell as any valid contractual or other legalrights in respect thereto preserved by ORS722.652; except that any such outstandingshare or share account which is not entitledto dividends shall not by virtue of any pro-vision of the Savings Association Act becomeso entitled. [1975 c.582 §147; 1985 c.762 §77]

722.658 Limitation on personal liabilityfor good faith acts or omissions. A personmay not be held personally liable for an actdone or omitted by the person in good faithand in compliance with a rule or order of theDirector of the Department of Consumer andBusiness Services under this chapter regard-less of whether the rule or order is lateramended, rescinded or determined to be in-valid by judicial or other authority. [1987 c.445§2]



722.660 Procedures for opening safedeposit box after death of person whowas sole lessee or last surviving lessee ofbox. (1) This section applies to the safe de-posit box of any person who is the sole lesseeor last surviving lessee of the box and whohas died.

(2) Upon being furnished with a certifiedcopy of the decedent′s death certificate orother evidence of death satisfactory to thesavings association, the savings associationwithin which the box is located shall causeor permit the box to be opened and the con-tents of the box examined at the request ofan individual who furnishes an affidavitstating:

(a) That the individual believes the boxmay contain the will of the decedent, a trustinstrument creating a trust of which the de-cedent was a trustor or a trustee at the timeof the decedent′s death, documents pertain-ing to the disposition of the remains of thedecedent, documents pertaining to propertyof the estate of the decedent or property ofthe estate of the decedent; and

(b) That the individual is an interestedperson as defined in this section and wishesto open the box to conduct a will search ortrust instrument search, obtain documentsrelating to the disposition of the decedent′sremains or inventory the contents of the box.

(3) For the purpose of this section, “in-terested person” means any of the following:

(a) A person named as personal repre-sentative of the decedent in a purported willof the decedent;

(b) The surviving spouse or any heir ofthe decedent;

(c) A person who was serving as thecourt-appointed guardian or conservator ofthe decedent or as trustee for the decedentimmediately prior to the decedent′s death;

(d) A person named as successor trusteein a purported trust instrument creating atrust of which the decedent was a trustor ora trustee at the time of the decedent′s death;

(e) A person designated by the decedentin a writing that is acceptable to the savingsassociation and is filed with it prior to thedecedent′s death;

(f) A person who immediately prior to thedeath of the decedent had the right of accessto the box as an agent of the decedent undera durable power of attorney; or

(g) If there are no heirs of the decedent,an estate administrator of the Department ofState Lands appointed under ORS 113.235.

(4) If the box is opened for the purposeof conducting a will search, the savings as-sociation shall remove any document thatappears to be a will, make a true and correct

copy of it and deliver the original will to aperson designated in the will to serve as thedecedent′s personal representative, or if nosuch person is designated or the savings as-sociation cannot, despite reasonable efforts,determine the whereabouts of such person,the savings association shall retain the willor deliver it to a court having jurisdiction ofthe estate of the decedent. A copy of the willshall be retained in the box. At the requestof the interested person, a copy of the will,together with copies of any documents per-taining to the disposition of the remains ofthe decedent, may be given to the interestedperson.

(5) If the box is opened for the purposeof conducting a trust instrument search, thesavings association shall remove any docu-ment that appears to be a trust instrumentcreating a trust of which the decedent wasa trustor or trustee at the time of the dece-dent′s death, make a true and correct copyof it and deliver the original trust instrumentto a person designated in the trust instru-ment to serve as the successor trustee on thedeath of the decedent. If no such person isdesignated or the savings association cannot,despite reasonable efforts, determine thewhereabouts of such person, the savings as-sociation shall retain the trust instrument.A copy of the trust instrument shall be re-tained in the box. At the request of any in-terested person, a copy of the trustinstrument may be given to the interestedperson.

(6) If the box is opened for the purposeof obtaining documents pertaining to thedisposition of the decedent′s remains, thesavings association shall comply with sub-section (4) of this section with respect to anywill of the decedent found in the box, andmay in its discretion either:

(a) Make and retain in the box a copy ofany documents pertaining to the dispositionof the remains of the decedent and tenderthe original documents to the interested per-son; or

(b) Provide a copy of any documents per-taining to the disposition of the remains ofthe decedent to the interested person andretain the original documents in the box.

(7) If the box is opened for the purposeof making an inventory of its contents, thesavings association shall comply with sub-section (4) or (5) of this section with respectto any will or trust instrument of the dece-dent that is found in the box, and shall causethe inventory to be made. The inventoryshall be attested to by a representative of thesavings association and may be attested toby the interested person, if the interestedperson is present when the inventory ismade. The savings association shall retain



the original inventory in the box, and shallfurnish a copy of the inventory to the inter-ested person upon request.

(8) The savings association may presumethe truth of any statement contained in theaffidavit required to be furnished under thissection, and when acting in reliance uponsuch an affidavit, the savings association isdischarged as if it had dealt with the per-sonal representative of the decedent. Thesavings association is not responsible for theadequacy of the description of any propertyincluded in an inventory of the contents ofa box, or for the conversion of the propertyin connection with actions performed underthis section, except for conversion by inten-tional acts of the savings association or itsemployees, directors, officers or agents. If thesavings association is not satisfied that therequirements of this section have been satis-fied, the savings association may decline toopen the box.

(9) If the interested person does not fur-nish the key needed to open the box, and thesavings association must incur expense ingaining entry to the box, the savings associ-ation may require that the interested personpay the expense of opening the box.

(10) Any examination of the contents ofa box under this section shall be conductedin the presence of at least one employee ofthe savings association. [1999 c.506 §9; 2003 c.395§23]

722.670 [1965 c.226 §2; repealed by 1975 c.582 §152]722.675 [1965 c.226 §1; repealed by 1975 c.582 §152]722.680 [1965 c.226 §3; 1971 c.734 §32; repealed by

1975 c.582 §152]722.685 [1965 c.226 §4; repealed by 1975 c.582 §152]722.705 [Amended by 1961 c.398 §54; repealed by



1975 c.582 §152]722.720 [Repealed by 1975 c.582 §152]722.725 [Amended by 1961 c.398 §57; 1967 c.234 §3;

repealed by 1975 c.582 §152]722.730 [Repealed by 1975 c.582 §152]722.735 [Repealed by 1975 c.582 §152]722.740 [Amended by 1957 c.670 §34; 1961 c.398 §58;

repealed by 1975 c.582 §152]722.745 [Repealed by 1975 c.582 §152]722.750 [Repealed by 1975 c.582 §152]722.755 [Amended by 1961 c.398 §59; repealed by


1975 c.582 §152]722.765 [Repealed by 1975 c.582 §152]722.770 [Repealed by 1975 c.582 §152]722.775 [Repealed by 1975 c.582 §152]722.780 [Repealed by 1975 c.582 §152]722.785 [Amended by 1975 c.582 §133; renumbered

722.478]

722.790 [Repealed by 1975 c.582 §152]722.795 [Repealed by 1975 c.582 §152]722.805 [Amended by 1961 c.398 §61; 1963 c.288 §12;

repealed by 1975 c.582 §152]722.810 [Repealed by 1975 c.582 §152]722.815 [Amended by 1961 c.398 §62; 1963 c.288 §13;

1971 c.743 §422; repealed by 1975 c.582 §152]722.820 [Repealed by 1975 c.582 §152]722.825 [Amended by 1961 c.398 §63; repealed by

1975 c.582 §152]722.830 [Amended by 1961 c.398 §64; 1963 c.288 §14;

repealed by 1975 c.582 §152]722.835 [Amended by 1975 c.582 §138; renumbered

722.506]722.840 [Amended by 1963 c.288 §15; repealed by

1975 c.582 §152]722.845 [Amended by 1975 c.582 §139; renumbered

722.508]722.850 [Amended by 1961 c.398 §65; repealed by



1975 c.582 §152]722.990 [Amended by 1963 c.288 §16; 1971 c.743 §423;

repealed by 1975 c.582 §152]

PENALTIES722.991 Civil penalties. (1) The Director

of the Department of Consumer and BusinessServices may assess an association or anyofficer, director, agent or employee of an as-sociation who violates any provision of thischapter, or any rule or final order issuedpursuant thereto, a civil penalty of not morethan $2,000 for each violation or $10,000 inthe aggregate for all violations within anythree-month period. In the case of an indi-vidual agent or employee, the civil penaltyshall be not more than $1,000 for each vio-lation or $5,000 in the aggregate for all vio-lations within any three-month period. Eachday a violation continues shall be considereda separate violation.

(2) In addition to the civil penalty pro-vided by subsection (1) of this section, anassociation or officer, director, agent or em-ployee of an association who violates anyprovision of this chapter, or any rule or finalorder issued pursuant thereto, may be as-sessed a civil penalty in an amount deter-mined by the director but not to exceed theamount by which the person profited as aresult of such violation.

(3) Civil penalties under this sectionshall be imposed as provided in ORS 183.745.

(4) All moneys collected under this sec-tion shall be paid to the State Treasurer andcredited to the Consumer and Business Ser-vices Fund created by ORS 705.145.



(5) If a civil penalty is assessed againsta director, officer, agent or employee of asavings association, unless the director pro-vides otherwise, the director, officer, agentor employee shall forfeit the penalty and the

penalty shall not be paid either directly orindirectly by the savings association.[Formerly 722.466]


Documents

TITLE 54 LOAN ASSOCIATIONS AND LENDING INSTITUTIONS ... · 725. Consumer Finance; Title and Payday Loans 726. Pawnbrokers Chapter 722 2007 EDITION Savings Associations GENERAL PROVISIONS