Oregon Statute | Act | Code |Title 54 Loan Associations And Lending Institutions| US Code - US Statute

As
used in this chapter, unless the context otherwise requires, words shall
have the meanings assigned by ORS 722.004. [1975 c.582 §2]

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

(2) “Borrower” means a person who is an obligor under a loan
agreement entered into by a savings association as obligee.

(3) “Branch facility” or “branch” means an established place of
business or a mobile or other facility of an association, other than the
principal office, at which any savings and loan business activity is
carried on.

(4) “Community” means a centralized area or locality in which a
body of inhabitants is gathered in one group having common residential,
social or business interests. The term does not necessarily mean a city,
county or other political subdivision and need not but may be limited by
lines and boundaries and a large, populous area under one or more forms
of government may be composed of several communities.

(5) “Demand deposit” means a deposit in an account that is payable
on demand upon the presentation of a negotiable check or draft.

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

(7) “Depositor” means a person who deposits money in a savings
account in an association.

(8) “Director” means the Director of the Department of Consumer and
Business Services.

(9) “Domestic association” means a corporation that transacts
savings and loan business under articles of incorporation issued by this
state.

(10) “Federal association” means a corporation that transacts
savings and loan business in this state under authority to do so issued
under federal law.

(11) “Foreign association” means a corporation, other than a
federal association, organized to transact savings and loan business
under the laws of any other state or territory of the United States.

(12) “Independent auditor” means a public accountant or a certified
public accountant authorized to practice as a public accountant or as a
certified public accountant under the laws of this state, or a firm of
such accountants.

(13) “Managing officer” means an officer of a savings association
designated by the board of directors of the association as provided by
ORS 722.102.

(14)(a) “Member,” in a mutual association, means an account holder
and any other person who is a member of a class of persons granted
membership rights by the articles of incorporation or the bylaws.

(b) “Member,” in a stock association, means a stockholder and any
other person who is a member of a class of persons granted membership
rights by the articles of incorporation or the bylaws.

(15) “Mutual association” means a savings association formed
without authority to issue stock.

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

(17) “Savings account” means the interest of an account holder in
the savings liability of a savings association.

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

(19) “Savings Association Act” means this chapter.

(20) “Savings bank” has the meaning given that term by ORS 706.008,
except as otherwise provided in ORS 722.014 relating to name.

(21) “Savings liability” means the total amount on deposit in all
savings accounts of a savings association plus interest earned on such
accounts.

(22) “Service corporation” means a corporation:

(a) That is engaged, or proposes to engage, in a business activity
related to savings and loan business; and

(b) In which at least 80 percent of the shares of stock having
voting rights are owned by one or more saving associations or federal
associations.

(23) “Stock association” means a savings association formed with
authority to issue stock.

(24) “Stockholder” means a person who appears on the records of a
savings association as the owner of one or more shares of stock of the
association.

(25) “To transact savings and loan business” means to engage in
business activities to promote savings and home building and ownership,
to acquire funds of the public to invest in loans and to make repayments
to savers as provided in savings plans.

(26) “Withdrawal value” means the amount of a savings account, less
lawful deductions. [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] (1)
The Legislative Assembly adopts the Savings Association Act:

(a) To provide for the safe and sound conduct of the business of
savings associations, the conservation of their assets and the
maintenance of public confidence in savings associations;

(b) To provide for the protection of the interests of account
holders and the public interest in the soundness of the savings and loan
system;

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

(A) To remain competitive with each other and with savings and
financial institutions existing under other laws of this and other
states, the United States and foreign countries; and

(B) To serve effectively the convenience and advantage of customers
and to improve and expand their services and facilities for such purposes;

(d) To provide the opportunity for managements of associations to
exercise business judgment in conducting the affairs of associations to
the extent compatible with the purposes recited in this subsection; and

(e) To provide adequate rulemaking power and administrative
discretion so that the regulation and supervision of associations is
readily responsive to changes in economic conditions and in savings and
loan practices.

(2) The purposes of the Savings Association Act stated in
subsection (1) of this section constitute standards to be observed by the
Director of the Department of Consumer and Business Services in the
exercise of discretionary powers under the Act, in the adoption of rules,
in the examination and supervision of associations subject to the Act and
in all matters of construction and application of the Act required for
any determination or action by the director. [1975 c.582 §32; 1985 c.762
§54]FORMATION, ORGANIZATION, VOLUNTARY CORPORATE CHANGES(Formation and Organization of Association)
(1) A person shall not transact savings and loan business in this state
unless the person has been issued a certificate of authority as provided
by this chapter or is authorized to do so by articles of incorporation
granted prior to June 6, 1931. Unless a person is so authorized and
actually engaged in savings and loan business in this state, a person
transacting business in this state shall not:

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

(b) Use any sign, or circulate or use any letterhead, billhead,
circular or paper whatsoever, or advertise in any manner that is
calculated to lead the public to believe that it is transacting savings
and loan business.

(2) Subsection (1) of this section does not apply to a federal
association. [1975 c.582 §33] (1) The name of a domestic
association, or the name authorized and used by a foreign association
doing business in this state, shall terminate with the words “Savings
Association,” “Savings and Loan Association” or “Savings Bank.” The name
“Savings Bank” may be so used notwithstanding any other provision of
Oregon law limiting or prohibiting the use of the name “Savings Bank” or
“Bank.” A domestic or foreign association may not use the word “bank” to
refer to itself or to any services it provides unless “bank” is modified
by “savings.”

(2) In addition to the requirements of ORS 57.045 (4)(a) (1985
Replacement Part), the name of a savings association shall not so
resemble the name of another savings association or an existing federal
association doing business in this state or a bank as defined in ORS
706.008 as to be likely to cause confusion or mistake, or to deceive.
This subsection applies only to:

(a) A domestic association formed after January 1, 1976.

(b) A foreign association issued a certificate of authority after
January 1, 1976. [1975 c.582 §34; 1985 c.374 §2; 1985 c.728 §106; 1987
c.197 §11; 1997 c.631 §529](1) A domestic association shall be incorporated, either as a stock
or a mutual association.

(2) ORS chapter 57 (1985 Replacement Part) applies to domestic
associations and to foreign associations except where inconsistent with
the express provisions of this chapter and, where inconsistent, this
chapter applies.

(3) The following provisions of ORS chapter 57 (1985 Replacement
Part) do not apply 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 apply to savings associations.

(b) In addition to the sections referred to in paragraph (a) of
this subsection, ORS 57.080 to 57.111, 57.121 to 57.137, 57.216, 57.390
to 57.411 and 57.870 to 57.890 do not apply to mutual associations.

(4) In applying ORS chapter 57 (1985 Replacement Part) and
provisions of ORS chapter 60, as provided by this section, unless the
context requires otherwise:

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

(b) “Corporation Commissioner,” “commissioner” or “Secretary of
State” means the Director of the Department of Consumer and Business
Services.

(c) “Corporation” or “domestic corporation” means a domestic
association.

(d) “Shareholder” means an account holder of a mutual association,
a stockholder of a stock association and includes account holders and
borrowers of a stock association if designated as members of the
association in the articles and bylaws of the association.

(e) Any reference in ORS chapter 57 (1985 Replacement Part) to
filing fees, annual license fees and other money payable by corporations
to the commissioner shall be considered a reference to the provisions of
this chapter governing filing fees, annual fees and other money payable
by associations to the director.

(f) Written notice of meetings to stockholders of a stock
association shall be delivered and the books of the association may be
closed not less than 10 nor more than 60 days before the date of the
meeting in the manner prescribed in ORS 57.150 and 57.155 (1985
Replacement Part).

(5) ORS 60.131 and 60.134 apply to stock savings associations.

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

(7) Notwithstanding ORS 57.355, articles of incorporation of a
savings association may be amended to set forth and apply the provisions
of ORS 60.047 (2)(d). [1975 c.582 §35; 1979 c.863 §1; 1981 c.472 §2; 1981
c.633 §78; 1983 c.717 §40; 1983 c.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] Any individuals desiring to
transact savings and loan business may, by complying with this chapter,
become a body corporate for that purpose. The articles of incorporation
for a savings association shall state:

(1) That the association is organized for the purpose of
transacting savings and loan business.

(2) Whether the association is organized as a stock association or
a mutual association and, if as a mutual association, state who has
membership rights and the relative rights of different classes of members
of the association. [1975 c.582 §36] When incorporators of a
domestic association deliver articles of incorporation to the Director of
the Department of Consumer and Business Services, they shall submit an
application for a certificate of incorporation, signed and verified by a
majority of the incorporators, together with the proper filing fee. The
application shall set forth:

(1) The names and addresses of the incorporators and proposed
directors and officers of the association.

(2) A statement of the character, financial responsibility,
experience and fitness of the directors and officers to engage in the
savings and loan business.

(3) Statements of estimated receipts, expenditures, earnings and
financial condition of the association for the first two years or such
longer period as the director may require.

(4) A showing that the association will have a reasonable chance to
succeed in the community in which it proposes to operate.

(5) A showing that the public convenience and advantage will be
promoted by the formation of the proposed association.

(6) Proposed bylaws.

(7) Any other matters the director may require. [1975 c.582 §37](1)
Upon receipt of an application and the documents described by ORS
722.022, the Director of the Department of Consumer and Business Services
shall promptly examine and investigate whether the formation of the
association should be allowed and the application granted.

(2) Not less than 20 days prior to taking action on an application
for a certificate of incorporation, the director shall give notice of the
filing of the application as provided by subsection (3) of this section.
The notice shall state:

(a) That the application has been filed and name the community
where the principal office is to be located; and

(b) That either a hearing will be held on the application at a
time, date and place given in the notice, or that a hearing will be held
if any person objects on relevant grounds to the granting of the
application and files a request for a hearing with the director 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, of general circulation in the community in which the
principal office of the proposed association is to be located;

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

(c) By mailing copies of the notice to persons who have requested
notice pursuant to ORS 183.335 (8).

(4) If a hearing is held because of a request, notice of the
hearing shall be given as provided by subsection (3) of this section and
shall name the time, date and place of the hearing. At any hearing any
person may appear in person or by agent or attorney and orally or in
writing show cause upon any relevant ground why the application should or
should not be granted.

(5) In the course of investigating any person named as
incorporators and proposed directors and officers in the articles of
incorporation under ORS 722.022, the director may require the person to
provide additional information for the director’s further inquiry. For
the purpose of such further inquiry, the director may require the person
to submit to fingerprinting.

(6) Fingerprints acquired under subsection (5) of this section may
be submitted to appropriate law enforcement agencies, including the
Federal Bureau of Investigation, for the purpose of discovering any
unlawful activities 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](1) The Director of the
Department of Consumer and Business Services shall approve an application
for a certificate of incorporation if the director affirmatively finds
from the data furnished with the application, from the evidence adduced
at the public hearing, if any, and from the investigation and records of
the director, including a review of criminal records, that:

(a) The articles of incorporation and proposed bylaws comply with
the law and the other provisions of this chapter have been complied with;

(b) The character, financial responsibility, experience and fitness
of each incorporator, each member of the proposed board of directors and
any person or persons directly or indirectly controlling the proposed
association commands confidence and warrants belief that the business of
the proposed association will be honestly and efficiently conducted in
accordance with the intent and purpose of this chapter and that the
proposed association will have qualified full-time management;

(c) The community stated in the application as the location of the
principal office of the proposed association affords a reasonable promise
of adequate support for the association;

(d) The operation of the proposed association will not unduly harm
any existing association that has been transacting business in the
community for less than two years; and

(e) The public convenience and advantage will be promoted.

(2) Upon approval of an application, the director shall issue a
certificate of incorporation with such conditions and restrictions as are
required by this chapter. After issuance of the certificate of
incorporation, however, the association shall not do any business, except
such business as is incident to its organization, until the director has
issued to it a certificate of authority as provided by ORS 722.036. [1975
c.582 §39; 1977 c.166 §1] If the
Director of the Department of Consumer and Business Services denies an
application for a certificate of incorporation the director shall enter
an order to that effect, setting out the facts that are the basis of the
denial, and mail the order, with a copy of the proposed articles of
incorporation, to the incorporators or their representatives. The order
shall also notify the incorporators of their right to a hearing on the
order. [1975 c.582 §40](1) After the organizational meeting,
the initial board of directors of an association shall:

(a) File with the Director of the Department of Consumer and
Business Services a corporate surety bond or letter of credit, in the
form and amount required by ORS 722.034;

(b) Collect subscriptions to capital or the expense fund in the
amounts required under ORS 722.042, but only after the surety bond
required by paragraph (a) of this subsection has been filed with the
director;

(c) Obtain subscriptions to savings accounts pledged, in the amount
required under ORS 722.042, to be paid in to the association upon
issuance to it of a certificate of authority;

(d) Take such other action as may be necessary to complete the
organization of the association; and

(e) Report the completion of the organization to the director.

(2) The report shall be filed with the director within six months
after the date the certificate of incorporation is issued. However, the
director, upon good cause shown prior to the expiration of the six-month
period, may extend the time for filing the report for an additional
period not to exceed six months. [1975 c.582 §41; 1991 c.331 §121](1) Any corporate surety bond or letter of credit filed
with the Director of the Department of Consumer and Business Services as
provided by ORS 722.032 shall be executed to the State of Oregon and
shall be in a form and amount, not less than $100,000, approved by the
director. The bond or letter of credit shall assure the safekeeping of
the funds subscribed and collected and their delivery, plus earnings, to
the association after the association has met all conditions and
requirements of organization and doing business in this state, and has
commenced public operation. In case the certificate of authority is not
issued, or is revoked pursuant to ORS 722.052 (2), the bond or letter of
credit shall assure the return, to the respective subscribers or their
assigns, of the amounts collected, plus earnings, less organizational
expenses incurred and within the amount authorized. ORS 742.358 applies
to cancellation of such a bond or letter of credit. Any letter of credit
filed with the director under this section shall be an irrevocable letter
of credit issued by an insured institution, as defined in ORS 706.008.

(2) Actual organizational expenses of the kind described by ORS
57.116 (1985 Replacement Part) may be paid as incurred from the funds
collected under ORS 722.042. However, such payments in the aggregate
shall not exceed an amount authorized by the director as reasonable for
organizational expenses.

(3) The initial board of directors of an association shall, subject
to the approval of the director, designate an escrow agent for the
safekeeping and delivery of funds in accordance with this section. [1975
c.582 §42; 1981 c.472 §3; 1987 c.197 §13; 1991 c.331 §122; 1997 c.631
§530](1) When the report of the board of directors is filed
with the Director of the Department of Consumer and Business Services as
provided by ORS 722.032, the director shall examine the affairs of the
association. The director shall issue a certificate of authority to the
association authorizing it to commence business if:

(a) The director finds the association has complied with all the
provisions of law required to entitle it to transact business;

(b) The director finds no intervening circumstance has occurred to
change the findings of the director made under ORS 722.026;

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

(d) The association pays the proper annual fee for the remainder of
the fiscal year.

(2) A certificate when issued continues in effect unless revoked by
the director. A certificate of authority shall be issued conditional upon
the association securing insurance of its savings accounts and commencing
business within the time allowed by ORS 722.046.

(3) If the director does not issue a certificate of authority to an
association, the director shall enter an order denying the certificate,
stating the reasons for the denial, and mail the order to the board of
directors. The order shall also notify the board of its right to a
hearing on the order. [1975 c.582 §43](1) A domestic association may, after securing the
approval of the Director of the Department of Consumer and Business
Services, amend its articles of incorporation or its bylaws.

(2) When a domestic or foreign savings association amends its
articles or bylaws, it shall file a verified copy of the resolution
authorizing such amendment in the office of the director.

(3) Copies of the articles of incorporation and bylaws of a savings
association shall be furnished by the association to the members of the
association upon request. [1975 c.582 §44; 1977 c.166 §2](1) When the Director of the Department of Consumer and
Business Services issues a certificate of incorporation for a new
association, the director shall include in the certificate, as conditions
that must be met prior to the issuance of a certificate of authority to
do business, requirements that in the opinion of the director will
justify the initial successful operation of the association. Requirements
in the certificate of a new association shall include, but need not be
limited to:

(a) The minimum amount of stated capital and capital surplus that
must be subscribed and paid in to a new stock association; or

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

(c) The minimum number and value of savings accounts that must be
subscribed and pledged to a mutual or stock association upon issuance to
it of a certificate of authority.

(2) All payments required by this section shall be in lawful money
of the United States. [1975 c.582 §45](1) Until a new stock association is on a profitable
operating basis as determined by the Director of the Department of
Consumer and Business Services, capital surplus collected by the
association under ORS 722.042 shall be restricted and may be used only
for payment of the expenses and charges of organization, as described by
ORS 57.116 (1985 Replacement Part), and for payment of any net operating
losses of the association, as determined after transfers to general
reserves for losses.

(2) Until a new mutual association is on a profitable operating
basis as determined by the director, the expense fund collected by the
association under ORS 722.042 shall be used only for payment of the
expenses and charges of organization, similar to those described by ORS
57.116 (1985 Replacement Part), and for payment of any net operating
losses of the association as determined after transfers to general
reserves for losses. When the director determines that the association is
on a profitable operating basis, contributions made to the expense fund
may be repaid pro rata to the contributors, first from the balance, if
any, remaining in the expense fund and then from earned surplus.

(3) In case of the liquidation of a mutual association before
contributions to the expense fund have been repaid, any balance in the
expense fund remaining unexpended after the payment of expenses of
liquidation, all creditors and the withdrawal value of all savings
accounts shall be repaid to the contributors pro rata.

(4) Amounts paid in on savings accounts pledged to a new mutual
association pursuant to ORS 722.042 shall not be withdrawable until the
director, pursuant to subsection (2) of this section, determines that the
association is on a profitable operating basis. [1975 c.582 §46; 1987
c.197 §14](1) A new association shall secure insurance of its savings
accounts as provided by ORS 722.048 and commence business within six
months after the date the certificate of authority to do business is
issued.

(2) If the association does not secure insurance and commence
business within the time allowed, on application of the association prior
to the expiration of the time and upon good cause shown, the Director of
the Department of Consumer and Business Services may extend the time for
an additional period not to exceed six months. [1975 c.582 §47] (1)
A savings association shall obtain and maintain insurance of its savings
accounts from the Federal Deposit Insurance Corporation or other federal
or state agency, or from another insurer approved by the Director of the
Department of Consumer and Business Services.

(2) Upon receiving an application from an association for approval
of an insurer, the director shall give reasonable notice to the insurer
and the applicant and conduct a public hearing on the application. The
director may issue a certificate approving an insurer if the director
determines that the contract of insurance contemplated:

(a) Is written upon substantially the same basis as to form,
amount, coverage, maturity, voluntary and involuntary termination and
other provisions as the insurance contract provided by the Federal
Deposit Insurance Corporation;

(b) Complies with any further requirements for protection of
account holders that the director considers reasonably necessary; and

(c) Is underwritten by an insurer who has a net worth reasonably
commensurate with the risks underwritten and is authorized to transact
insurance in this state.

(3) Subsection (2) of this section applies to all revisions or
modifications of such contracts of insurance.

(4) Insured associations may make representations as to insurance
of savings accounts but all representations shall set forth the name of
the insurer. An association or other person shall not advertise,
represent, accept or offer to accept any savings accounts in this state,
unless the accounts are insured as provided by this section. [1975 c.582
§48; 1999 c.107 §13] (1)
The Director of the Department of Consumer and Business Services may
revoke the certificate of authority of a domestic or a foreign
association for violation of the provisions of this chapter.

(2) The director may revoke the certificate of authority of a new
domestic association and may dissolve the association when the
association fails to obtain insurance of accounts and commence business
within the time allowed by ORS 722.046.

(3) The director may dissolve a domestic association:

(a) When the report of the initial board of directors is not filed
within the time allowed by ORS 722.032.

(b) After the effective date of an order issued under ORS 722.036
denying a certificate of authority.

(4) The director shall dissolve an association as provided by ORS
57.585 (1985 Replacement Part). The director, prior to the dissolution,
may appoint a conservator as provided by ORS 722.474 if the director
finds that liquidation of the affairs of the association should precede
the dissolution of the association. [1975 c.582 §49; 1981 c.633 §79; 1983
c.717 §34; 1985 c.728 §105; 1987 c.197 §15](Voluntary Corporate Changes)(1) A
domestic stock or mutual association may convert to a federal association
whose principal office is in this state or to a foreign mutual or stock
association or to an Oregon savings bank, as defined in ORS 706.008, upon
an equitable basis subject to:

(a) The prior approval of the conversion by the Director of the
Department of Consumer and Business Services;

(b) The approval of the state or federal supervisory authority
having jurisdiction of the proposed resulting association or bank; and

(c) The approval of the members of the converting association at a
meeting properly called to consider such action.

(2) When conversion to an Oregon savings bank, as defined in ORS
706.008, is proposed, the conversion is subject to the rules adopted
under ORS 706.790 to carry out this section.

(3) Upon receipt of the approval of a proposed conversion from the
director and other appropriate supervisory authority, a converting
association, under the supervision of the authority, may carry out the
plan of conversion. A record of all acts or proceedings taken in carrying
out the proposed conversion shall be filed with the director.

(4) The effective date of a conversion under this section is
governed by the law, if any, governing the resulting association or bank.
If there is no law governing the effective date, conversion proposed
under this section is effective upon the date that all provisions of this
chapter and the rules adopted pursuant thereto have been complied with
and a new charter or certificate of incorporation has been issued to the
resulting association or savings bank. A certified copy of the new
charter or certificate of incorporation shall be filed with the director.
[1975 c.582 §50; 1985 c.762 §56; 1987 c.373 §57; 1987 c.445 §11; 1997
c.631 §531](1) A federal mutual association whose principal office is in this state,
a foreign mutual association or a savings bank may convert to a domestic
mutual association and a federal stock association whose principal office
is in this state, a foreign stock association or an Oregon stock savings
bank, as defined in ORS 706.008, may convert to a domestic stock
association upon an equitable basis subject to:

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

(b) The approval of the Director of the Department of Consumer and
Business Services;

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

(d) The rules adopted by the director to carry out the provisions
of ORS 722.056 to 722.068.

(2) Upon receipt of the approval of a proposed conversion from the
director, a converting association or bank may, under the supervision of
the director, carry out the plan of conversion. A record of all acts or
proceedings taken by the board of directors of the converting association
or bank in carrying out the proposed conversion shall be filed with the
director.

(3) Notice of a meeting of the members to approve a conversion
under this section shall be given as provided by ORS 722.066 (2) and (3),
unless otherwise provided by the law applicable to the converting
association or bank. At a meeting at which a conversion under this
section is voted upon, the members shall also vote upon the directors who
shall be the directors of the domestic association after conversion takes
effect. The director shall, in the certificate of incorporation issued to
the resulting association, include a statement that the association is
incorporated by conversion from a federal or foreign association or
Oregon savings bank, as the case may be.

(4) A conversion carried out under this section is effective on the
date that all provisions of this chapter and the regulations adopted
pursuant thereto have been complied with and a new certificate of
incorporation has been issued by the director.

(5) All provisions regarding property and other rights contained in
ORS 722.068 apply, in reverse order, to the conversion into a domestic
association under this section, so that the resulting domestic
association shall be a continuation of the converting association or bank
and continue to have all of its rights, liabilities, obligations and
relations. [1975 c.582 §51; 1987 c.445 §12; 1997 c.631 §532](1) A federal
mutual association whose principal office is in this state or a foreign
or domestic mutual association or savings bank may convert to a domestic
stock association and a federal stock association whose principal office
is in this state or a foreign or domestic stock association may convert
to a domestic mutual association upon an equitable basis subject to:

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

(b) The approval of the Director of the Department of Consumer and
Business Services;

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

(d) The rules adopted pursuant to ORS 722.064.

(2) ORS 722.058 (2) to (5) apply to a conversion under this
section. [1975 c.582 §52] In adopting
rules or issuing orders to carry out ORS 722.056 to 722.068, and
especially when adopting rules or supervising conversions proposed under
ORS 722.062, the Director of the Department of Consumer and Business
Services shall assure that:

(1) Accurate and adequate disclosure of the terms and effects of
plans of conversion are provided to purchasers of capital stock in
resulting associations, including account holders of converting mutual
associations and savings banks;

(2) Adjustments are made in plans of conversion to be effected by
way of merger or holding company acquisition necessary or appropriate to
accomplish the purpose of this section;

(3) Plans of conversion and proxy statements, offering circulars
and related instruments and actions implementing such plans are subject
to review and approval by the appropriate supervisory authorities;

(4) The capital stock issued as a part of conversion is fairly and
independently valued and priced;

(5) Such capital stock is allocated and distributed fairly and
without manipulative or deceptive devices being employed;

(6) Appropriate provision is made regarding fractional share
interests and minimum capital stock purchase requirements; and

(7) Plans of conversion are adopted and implemented in a form and
manner so that stability and continuity of management are encouraged and
so that the stability, safety and soundness of savings associations and
other financial institutions are not impaired. [1975 c.582 §53] (1) A conversion
proposed under ORS 722.056 to 722.068 by a domestic association or Oregon
savings bank as defined in ORS 706.008 shall, after approval by the
supervisory authority having jurisdiction of the converting association
or savings bank, be submitted to the members at an annual meeting or at a
special meeting called to consider such action. The conversion must have
the approval of the number of votes required by ORS 57.511 (1985
Replacement Part) to approve a sale of assets.

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

(a) Expressly state that a proposed conversion will be submitted
for approval or disapproval;

(b) Include a full and accurate description of the plan of
conversion and all other matters to be brought before the meeting;

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

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

(3) The notice shall be given at least 20 days prior to the date of
the meeting to each voting member of the converting association or Oregon
savings bank, the Director of the Department of Consumer and Business
Services and the other appropriate supervisory authority.

(4) A foreign or federal association or an Oregon savings bank
proposing a conversion under ORS 722.056 to 722.068 shall comply with the
applicable provisions of the law and regulations governing such
association or bank regarding approval by the supervisory authority and
the members of the association or bank. [1975 c.582 §54; 1987 c.197 §16;
1987 c.445 §13; 1997 c.631 §533] (1) Upon the effective date of the
conversion of a domestic association to a federal or foreign association
or an Oregon savings bank, as defined in ORS 706.008, the converting
domestic association shall cease to be a domestic association
incorporated under the laws of this state. However, it is expressly
declared that the resulting association or savings bank shall be merely a
continuation of the converting domestic association under a new name and
new jurisdiction and such revision of its corporate structure as may be
considered necessary for its proper operation under such new
jurisdiction. All property of the converted association, including its
rights, titles and interests in and to all property of whatever kind,
whether real, personal or mixed; and things in action, and every right,
privilege, interest and asset of any conceivable value or benefit then
existing or pertaining to it, or which would inure to it, shall
immediately by operation of law and without any conveyance or transfer
and without any further act or deed remain and be vested in and continue
and be the property of the resulting association or bank. All the
liabilities and obligations of the converting domestic association shall
continue as valid and subsisting liabilities and obligations of the
resulting association or bank. The resulting association or bank on the
effective date of the conversion shall continue to have and succeed to
all the rights, liabilities, obligations and relations of the converting
association. A creditor of a domestic association shall not by reason of
such conversion alone be deprived of or prejudiced with respect to any
claim which the creditor may have against the converting domestic
association.

(2) All pending actions and other judicial proceedings to which the
converting domestic association is a party shall not abate or discontinue
by reason of such conversion, but may be prosecuted to order or judgment
in the same manner as if such conversion had not been made and such
resulting association or bank may continue such action in its corporate
name. Any order or judgment may be rendered for or against it which might
have been rendered for or against the converting domestic association
theretofore involved in such judicial proceedings. [1975 c.582 §55; 1987
c.445 §14; 1997 c.631 §534; 2003 c.576 §552] (1) A
domestic association may merge or consolidate with, participate in an
exchange with or sell its assets, including one or more of its branch
facilities, 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 out pursuant to a plan adopted by the board of directors
and approved by the Director of the Department of Consumer and Business
Services as:

(a) Equitable to the members of the association;

(b) Not impairing the usefulness and success of other properly
conducted associations; and

(c) Promoting the public convenience and advantage.

(3) The provisions of ORS 57.455 to 57.500, 57.506 and 57.511,
(1985 Replacement Part), applicable to a merger, consolidation or
exchange of shares with, or sale of assets to, a foreign corporation also
apply to a merger, consolidation or exchange with, or a sale to, a
federal association.

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

(a) The association’s charter is not changed; and

(b) Any stock issued or delivered under the plan, plus those
initially issuable upon conversion of any securities to be issued or
delivered under the plan, does not exceed 15 percent of the total shares
of voting stock of the association outstanding immediately prior to the
effective date of the merger or acquisition. [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] (1) A consent to dissolve or a
resolution to dissolve shall not be effective as provided by ORS 57.546
(1985 Replacement Part) unless the plan for distribution of the assets of
the association is approved by the Director of the Department of Consumer
and Business Services as equitable to the members.

(2) An association during liquidation shall continue to be subject
to the supervision of the director. The board of directors of the
association shall report the progress of the liquidation to the director
from time to time as the director may require.

(3) The director may take over and conduct the liquidation as
provided by this section and ORS 722.474 and 722.476 when the director
considers it to be in the interest of the account holders, creditors,
stockholders and other members of the association.

(4) Upon completion of a liquidation by the board of directors, the
board shall file a final report and accounting of the liquidation with
the director. [1975 c.582 §57; 1987 c.197 §18]CORPORATE ADMINISTRATION(Directors; Officers; Members; Borrowers)(1) The board of directors of a savings association shall be responsible
for the business policies of the association and for the enforcement of
such policies by the managing officer.

(2) The board of each savings association shall designate a person
to serve as the managing officer. The managing officer shall be the
person responsible to the board of directors for the operation of the
association. The board shall also designate a representative for the
managing officer who may act for the managing officer during the
temporary absence or inability of such officer to act. For the purposes
of this section, the managing officer of a foreign association shall be a
person in this state who is responsible to the board of directors of the
association for the operations of the association in this state.

(3) The board of directors of each association shall inform the
Director of the Department of Consumer and Business Services of the name
of the managing officer and the managing officer’s representative upon
the designation, or any change in the designation, of such a person. A
board may comply with this subsection by mailing the director a verified
copy of the minutes of the board meeting at which the managing officer or
the managing officer’s representative is designated.

(4) Each director of a domestic association who is not a resident
of this state shall, by service as a director, appoint the director as
agent for service of process in any proceeding connected with the
director’s election or service as a director. Subsections (5) to (7) of
this section apply to service of process as authorized by this subsection.

(5) Service shall be made on the director by:

(a) Service on the director or on a clerk on duty in the Department
of Consumer and Business Services, of a copy of the process, notice or
demand, with any papers required by law to be delivered in connection
with the service, and a $2 fee;

(b) Transmittal by the person instituting the proceedings of notice
of the service on the director and a copy of the process, notice or
demand and accompanying papers to the savings association being served by
certified or registered mail:

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

(B) At such address, the use of which the person initiating the
proceedings knows or, on the basis of reasonable inquiry, has reason to
believe is most likely to result in actual notice; and

(c) Filing with the appropriate court or other body, as part of the
return of service, of the return receipt of mailing and an affidavit of
the person initiating the proceedings that this section has been complied
with.

(6) The director shall keep a record of all processes, notices and
demands served under this section.

(7) Nothing contained in this section shall limit or affect the
right to serve any process, notice or demand required or permitted by law
to be served upon a savings association in any other manner now or
hereafter permitted by law, or enlarge the purposes for which service on
the director is permitted where such purposes are limited by other
provisions of law. [1975 c.582 §58; 1983 c.717 §36; 1985 c.762 §57] A savings association
may make, transfer, extend or renew operating and employment contracts. A
contract under this section shall be subject to rules, if any, of the
Director of the Department of Consumer and Business Services adopted to
carry out the purposes of this chapter. An employment contract with an
officer or employee of an association shall provide that upon discharge
of the officer or employee pursuant to ORS 722.468, the contract and all
obligations of the association under the contract terminate; but
discharge shall not affect any vested rights of the parties to such a
contract. [1975 c.582 §59; 1981 c.472 §5](1) Except as provided in ORS 722.107, every savings
association shall obtain and maintain fidelity and other bonds and
insurance coverage, with one or more insurers authorized to do business
in this state, of the kinds and in the form and amounts required by the
rules of the Director of the Department of Consumer and Business Services
to protect the association, its account holders and other customers, and
the public.

(2) Every required bond and insurance policy shall provide that a
cancellation thereof, either by the insurer or the insured, shall not
become effective until at least 30 days after notice that it is to be
canceled is mailed to the director. [1975 c.582 §60; 1987 c.285 §3]
Notwithstanding ORS 722.106, the Director of the Department of Consumer
and Business Services may establish by rule a program under which a
savings association may create a fund to provide payment, protection and
indemnification to the association, its officers, directors and
employees, its customers and the public for losses incurred or damages
sustained. The establishment of such a fund shall be in lieu of some or
all of the bonding and insurance requirements of ORS 722.106, and shall
only be allowed if the director finds that adequate third-party insurance
or bonding protection is not available, or is only available at excessive
rates. Among the provisions of the program shall be:

(1) Provisions for creating and administering the fund. The
provisions must require the pledging of collateral by the association
with the Federal Home Loan Bank of Seattle or another pledge holder
approved by the director.

(2) A limitation on the amount of collateral that an association
may pledge to the fund.

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

(4) A requirement that an association give notice to its pledge
holder before making any pledge, and authorization to the pledge holder
to refuse a pledge when it determines the pledge to be inappropriate.

(5) Provisions for claim payments and reimbursement from the fund.
[1987 c.285 §2; 1987 c.414 §70a](1) The
directors, officers and employees of a savings association occupy a
fiduciary relationship to the association. A director, officer or
employee of an association shall not engage or participate, directly or
indirectly, in any business or transaction involving the association when
such person possesses any personal interest, direct or indirect in the
business or transaction unless:

(a) Prior thereto, the person fully discloses to the board of
directors such personal interest;

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

(c) The business or transaction has the prior approval of not less
than two-thirds of the authorized members of the board of directors, the
approval is entered in the minutes of the meeting at which the business
or transaction is authorized and a director with any interest in the
business or transaction abstains from voting on the question of approval.
However, any business or transaction in which more than one-third of the
authorized members of the board of directors have an interest may be
consummated if the Director of the Department of Consumer and Business
Services approves the business or transaction before its consummation.

(2) The director may require that a director, officer or employee
disclose any personal interest, direct or indirect, in any business or
transaction on behalf of or involving the association and of the
director’s, officer’s or employee’s control of or active participation in
an enterprise having activities related to the business of the
association.

(3) In addition to any other penalty provided by law, an officer,
director or employee who violates this section is liable to the
association for any profits inuring to the officer, director or employee
and any loss or excess expense incurred by the association as a result of
such violation. [1975 c.582 §61; 1981 c.472 §6]In addition to the authority granted an association by
ORS 57.255 (1985 Replacement Part), a director, officer, employee or
agent may be indemnified by an association, or reimbursed, for reasonable
expenses necessarily incurred, even though the person was negligent or
committed an act or failed to perform a duty for which there is a common
law or a statutory liability if:

(1) The board of directors finds that the person acted in good
faith, in what the person believed to be the best interest of the
association and without knowledge or reasonable cause to believe that any
such action or inaction was a violation of any law, and the board
approves the indemnification or reimbursement;

(2) The Director of the Department of Consumer and Business
Services concurs in the findings of the board adopted under subsection
(1) of this section and approves the indemnification or reimbursement; and

(3) The indemnification or reimbursement is approved at an annual
or special meeting of the members by a majority of the votes eligible to
be cast. [1975 c.582 §62; 1987 c.197 §19] The
Director of the Department of Consumer and Business Services may
establish by rule a program under which a savings association may create
a fund for indemnifying its directors and officers. Among the provisions
of the program shall be the following:

(1) Provisions for creating and administering the fund which shall
require the pledging of collateral by the association with the Federal
Home Loan Bank of Seattle or another pledge holder approved by the
director.

(2) A limitation on the amount of collateral that an association
may pledge to the fund.

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

(4) A requirement that an association give notice to its pledge
holder before making any pledge, and authorization to the pledge holder
to refuse a pledge when it determines the pledge to be inappropriate.

(5) A requirement that, notwithstanding ORS 60.047 (2)(d), 60.387
to 60.414 and 722.112, an association that creates a fund shall indemnify
a director or officer to the full extent that there are resources in the
fund in all cases except for fraud or bad faith by the director or
officer. [1987 c.224 §2; 1987 c.373 §90a; 1987 c.414 §166c; 1987 c.528
§5; 1991 c.883 §14] (1)
Memberships may be granted by the articles of incorporation or bylaws of
an association to borrowers or account holders of the association, with
such rights and liabilities as are allowed by the articles or bylaws.
Unless otherwise provided in the articles or bylaws, a member may vote in
person or by proxy on any matter subject to a vote, at any regular or
special meeting of the members. However, the members of a mutual
association shall include its account holders and members of a stock
association shall include its stockholders. The articles of incorporation
may limit or deny voting rights of any class of members to the extent not
inconsistent with this chapter.

(2) Membership of an account holder in a mutual or stock
association continues until the savings account is transferred on the
books of the association or the account is withdrawn. When a savings
account is issued by an association in the name of two or more persons, a
proxy is valid if executed by any one or more of such persons.

(3) Each association shall maintain records of the members of the
association showing the name and address of each member and the status of
each member as a stockholder, account holder or borrower. [1975 c.582
§63; 1981 c.472 §7](1) Subject to ORS 722.118 (1), a member with voting
rights has the right to examine in person, or by an agent or an attorney,
at reasonable times, for any proper purpose, the relevant books and
records of the association and to make extracts therefrom. If an
association refuses to allow such a member, or the agent or attorney of
such a member, to so examine and make extracts from such books and
records for a proper purpose, the member may petition any court of
competent jurisdiction for an order compelling the production for
examination by such member of the relevant books and records. The order
may be granted if:

(a) The member is acting in good faith and for a proper purpose in
making the demand; and

(b) The confidentiality of the accounts and records pertaining to
savings accounts and personal information in loan records of other
persons is preserved during such production and examination.

(2) The court may award reasonable attorney fees to the prevailing
party in an action under this section. [1975 c.582 §64; 1981 c.897 §101;
1995 c.618 §125](1) Every account holder and borrower has the right to inspect the books
and records of a savings association that pertain to the accounts of the
account holder or borrower. Otherwise, the right of inspection and
examination of the accounts of account holders or personal information in
loan records is limited to:

(a) The Director of the Department of Consumer and Business
Services or an authorized representative of the director.

(b) Persons authorized to act for the association.

(c) Any federal or state instrumentality or agency authorized to
inspect or examine the books and records of an insured association.

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

(2) A member has the right to communicate with other members of the
association with reference to any question pending or to be presented for
consideration at a meeting of the members. An association may not defeat
such right by a redemption of the member’s accounts in the association. A
member who wishes to communicate with other members shall submit to the
association a request, subscribed by the member, which includes:

(a) The member’s full name and address.

(b) The nature and extent of the member’s interest in the
association at the time the member’s application for communication is
made.

(c) A statement of the reasons for and purposes of the
communication and that the communication is not for any reason other than
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 the members of the association, the date of the meeting at
which the matter will be presented.

(3) Upon receipt of the request referred to in subsection (2) of
this section, the association shall, within 10 days, notify the
requesting member of:

(a) The approximate number of the members and the estimated amount
of the reasonable costs and expenses of mailing the communication; or

(b) Its determination to refuse the request and the specific
reasons for its refusal, including its determination whether or not the
request has been made for a proper purpose.

(4) Within seven days after receipt of the sum specified pursuant
to subsection (3)(a) of this section and sufficient copies of the
communication, the association shall mail the communication to all its
members.

(5) If a request referred to by subsection (2) of this section is
refused by the association, the requesting member may submit the request
and the refusal thereof to the director for review. The director may
issue an order denying the request or, if the director finds the request
is not for any reason other than the business welfare of the association,
granting the request and directing the association to comply with
subsection (4) of this section.

(6) In any action arising out of a request that is refused under
this section, the court may award reasonable attorney fees to the
prevailing party. [Formerly 722.303; 1985 c.762 §58; 1995 c.618 §126]Insofar as ORS 722.116 and 722.118 are not inconsistent
with federal law, they apply to a federal association whose principal
office is located in this state and to the members thereof, except that
the request permitted by ORS 722.118 (5) shall be submitted to the
Federal Housing Finance Board, Washington, D.C., in the case of a federal
association and forwarded to members only upon the order and direction of
that board. [1975 c.582 §66; 1999 c.107 §6]
If a domestic association or a director, officer, employee or agent of a
domestic association was issued one or more orders by the Director of the
Department of Consumer and Business Services under ORS 722.464 within the
12 months immediately preceding the date of the annual shareholders’
meeting, the domestic association shall include in every notice required
for the annual meeting under ORS 57.150 (1985 Replacement Part):

(1) A copy of ORS 722.464; and

(2) A statement that the domestic association or a director,
officer, employee or agent of the domestic association received such an
order or orders. [1985 c.786 §62; 1987 c.197 §20; 1987 c.215 §4](Stock; Dividends and Earnings; General Reserve and Net Worth Accounts) The
consideration for the issuance of stock of a stock association shall be
paid in money or payment in tangible assets at fair market value. When
payment of the consideration for which shares of stock are to be issued
has been received by the association, such stock shall be considered
fully paid and nonassessable. This section shall not be considered to
limit or prohibit an association from establishing stock option,
performance share or other benefit plans involving stock, or issuing
stock under such a plan, if the association has received a certificate of
authority and has satisfied all conditions the Director of the Department
of Consumer and Business Services has attached to the certificate. [1975
c.582 §67; 1981 c.472 §8] (1) A
stock association, unless it has the prior approval of the Director of
the Department of Consumer and Business Services, shall not:

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

(b) Sell or transfer to any person through one or more transactions
any number of shares of stock adequate to give such person ownership or
control of 10 percent or more of the outstanding shares of the
association.

(2) No person shall acquire, through one or more transactions,
shares of stock sufficient to give such person ownership or control,
directly or indirectly, of record or beneficially, of 10 percent or more
of the outstanding shares of the association, without prior approval of
the director.

(3) Subsections (1) and (2) of this section also apply:

(a) When a sale or transfer of stock to a person increases the
stock over which the person has ownership or control from less than 25
percent to 25 percent or more of the outstanding shares; or

(b) When a sale or transfer of stock to a person increases the
stock over which the person has ownership or control from less than 50
percent to 50 percent or more of the outstanding shares.

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

(5) The director shall disapprove a sale, transfer or acquisition
if the director finds that the character, financial responsibility,
experience and fitness of the person who would acquire control indicates
that approval would not be in the interest of the account holders,
borrowers or stockholders of the association or in the public interest.

(6) If a sale, transfer or acquisition described by subsection (1),
(2) or (3) of this section is made without the prior approval of the
director, the director may order the association to set aside or revoke
the sale, transfer or acquisition, or may order the person to dispose of
the shares or take such other action as is deemed appropriate. [1975
c.582 §68; 1979 c.863 §3; 1981 c.472 §9] The gross
earnings of a savings association shall be ascertained at least annually
on an accrual basis according to generally accepted accounting
principles. The expenses of an association shall be paid first from its
gross earnings, then from earned surplus and finally from capital
surplus. With the prior approval of the Director of the Department of
Consumer and Business Services, expenses may be paid from stated capital
or from any expense fund of a mutual association. [Formerly 722.145](1) Before payment of dividends to
stockholders of a stock association or distribution of earned surplus to
account holders of a mutual association, an association shall provide for:

(a) Its expenses, which shall include interest 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 different rates of dividends or interest upon different classes of
stock or savings accounts.

(3) Accrued unpaid interest delinquent for a period of more than
three months shall not be considered earnings of an association.

(4) A savings association may, in addition to the general reserve,
hold as earned surplus such sum as the board of directors may, from time
to time, consider necessary or desirable. [Formerly 722.155](1) A savings association shall establish and
maintain a general reserve account for losses and other net worth
accounts adequate to assure solvency of the association.

(2)(a) Each savings association shall accumulate and maintain as a
net worth account a general reserve for the sole purpose of absorbing
losses. At the annual closing date following the anniversary of its
certificate of authority and each annual closing date thereafter, the
general reserve shall have a minimum balance not less than an amount
fixed by rule.

(b) The Director of the Department of Consumer and Business
Services by rule shall fix the required minimum amount of general reserve
accounts of associations. The rule shall provide a uniform schedule of
minimum levels to be reached during the first 20 or more years of an
association’s operation for the purpose of achieving an orderly
accumulation of the general reserve account.

(3) The director may permit an association to cure a deficiency in
its general reserve account by requiring the board of directors of the
association to earmark earned surplus, voluntarily pledged savings
accounts of a mutual association, capital certificates of a mutual
association, or capital surplus or stated capital, including preferred
stocks, of a stock association, and capital notes and debentures
subordinated to saving accounts, as part of its general reserve account
in the amounts needed to cure the deficiency. Amounts so earmarked shall
be held for the same purpose as the general reserve to the extent the
earmarked amounts are needed to maintain the required reserve account
level. An association shall not pay dividends or interest from the
reserve account or other funds earmarked for the purpose of meeting the
reserve account requirement.

(4) Every savings association shall build up and maintain its net
worth so that at the close of business on any annual closing date its net
worth accounts shall equal not less than the dollar amount determined in
accordance with the rules to be adequate to assure solvency of the
association. The rules shall provide for an adjustment of the net worth
requirement during the first years of an association’s operation in
accordance with subsection (2)(b) of this section. Notwithstanding other
provisions of this section, the director may consider an association to
be in compliance with this section if applicable federal net worth and
reserve requirements for federally insured associations are satisfied. If
an association fails to establish or maintain the general reserve or the
net worth requirements of this section, the director may in accordance
with ORS 722.464 require the association to take appropriate corrective
action.

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

(6) Losses as they are determined, not charged to other reserve
accounts, shall be charged to the general reserve until the general
reserve account is exhausted. After exhaustion of the general reserve,
any remaining losses not charged to other reserve accounts shall be
charged as determined:

(a) In the case of a stock association, to earned surplus, then
capital surplus and then stated 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 an insurer of the savings
accounts of an association shall be considered part of the general
reserve for the purpose of subsection (2) of this section. [1975 c.582
§71; 1981 c.472 §10](Miscellaneous) A savings association shall not
charge or collect a membership fee for issuing a savings account or other
obligation of the association. [1975 c.582 §72] Every association
annually shall prepare a printed statement of the financial condition of
the association and make it available to the public. The statement shall
be in a form and published at the time prescribed by the Director of the
Department of Consumer and Business Services. [1975 c.582 §73] (1) A savings association shall keep correct and
complete records, books of account and minutes of the proceedings of
members, directors and the executive committee. Associations shall use
such forms and observe such accounting principles and practices as the
Director of the Department of Consumer and Business Services by rule
requires from time to time.

(2) An association may cause any or all records kept by the
association to be copied or reproduced by any photostatic, photographic
or microfilming process that correctly and permanently copies, reproduces
or forms a medium for copying or reproducing the original records on a
film or other durable material, and the association may thereafter
dispose of the original record. Such copy or reproduction shall be
considered an original record for all purposes and shall be treated as an
original record in all courts or administrative agencies for the purpose
of its admissibility in evidence. A facsimile, exemplification or
certified copy of any such copy or reproduction reproduced from a film
record shall, for all purposes, be considered a facsimile,
exemplification or certified copy of the original record. [1975 c.582 §74] (1)
This section applies to domestic associations and to foreign or federal
associations doing business in this state.

(2) As used in this section:

(a) “Emergency” means any condition or occurrence which may
interfere with the conduct of normal business operations at the principal
office or one or more of the branches of an association, or which poses
an imminent or existing threat to the safety or security of persons or
property.

(b) “Open for the general conduct of association business” means
the office or offices of the association are open for carrying on
substantially all business functions of the association.

(3) The following days are optional holidays 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 association may observe the holiday either on that day or
on the preceding Friday. When an optional holiday, other than a Sunday,
falls on a Sunday, the association may observe the holiday either on that
day or on the succeeding Monday.

(5) Except as otherwise provided in this section, associations
shall be open for the general conduct of association business on each day
that is not an optional holiday.

(6) Any savings association may remain closed on any holiday with
respect to all or any of its functions.

(7) Subject to any applicable federal law or regulation, an office
of a savings association may be closed for any part or all of any day
other than a holiday if the times or days which the office is open are
posted on the premises of the office.

(8) When the Director of the Department of Consumer and Business
Services determines that an emergency exists, the director may authorize
the closing of the principal office or any branch of an association that
may be affected by the emergency. The office or branch so closed may
remain closed until the director determines that the emergency has ended
and for such further time thereafter as may reasonably be required to
prepare the office or branch to reopen.

(9) When the officers of an association determine that an emergency
exists which affects the principal office or a branch of the association,
they may close the office or branch without the approval of the director
for a period not to exceed 48 hours, excluding holidays, during the
continuation of the emergency. An association closing an office or branch
under this subsection shall give prompt notice of its action to the
director or, in the case of a foreign or federal association, to its
supervisory authority.

(10) The principal officers of a savings association may close any
office of the association on any day designated, by proclamation of the
President of the United States or the Governor of this state, as a day of
mourning, rejoicing or other special observance.

(11) When any obligation payable at, by or through an association,
principal office or branch falls due on a day on which it remains closed
under this section, it shall be due and payable on the next day on which
the association, office or branch is reopened. Any act authorized,
required or permitted to be performed at, by or with respect to any
savings association, office or branch on a day on which it remains so
closed may be performed on the next succeeding day on which the
association, office or branch is reopened; and no liability or loss of
rights of any kind shall result from such closing. [Formerly 722.185;
1981 c.472 §11; 1985 c.627 §2; 1989 c.582 §2; 1989 c.596 §2; 1995 c.373
§2; 1997 c.188 §2; 2001 c.104 §285](1) A savings association may share financial and
credit information concerning its customers:

(a) With any company of which it directly or indirectly controls 50
percent or more of the voting shares; and

(b) With any parent company that directly or indirectly controls 50
percent or more of the voting shares of the savings association.

(2) Any company controlled by a savings association in the manner
described in subsection (1) of this section and any parent company of the
same savings association, as described in subsection (1) of this section,
may share information concerning their customers with each other, with
the savings association and with any other company so controlled by the
same savings association.

(3) This section shall not be construed as otherwise permitting or
limiting the sharing or disclosure of information.

(4) For purposes of this section, “customers” includes but is not
limited to depositors, borrowers, credit card holders, lessees,
purchasers under contracts and applicants for credit. [1985 c.798 §2]GENERAL POWERS A savings association has
all the powers conferred by this chapter, or its charter or certificate
of incorporation, both express and implied, and such other rights,
privileges and powers as are incidental thereto or reasonably necessary
or appropriate to the accomplishment of the purpose of the association.
Among other rights, privileges and powers, and except as otherwise
limited by the provisions of this chapter, a savings association may:

(1) Procure insurance of its real estate and other loans and of its
savings accounts from any federal, state or private agency or corporation
authorized to write such insurance and, in the exercise of such powers,
may comply with any requirements of law or rule or order promulgated and
execute any contracts and pay any premiums required in connection
therewith.

(2) Be a member of a Federal Home Loan Bank, the Federal Deposit
Insurance Corporation or any similar federal or state agency, and do all
things required by federal or state law to obtain and continue such
membership.

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

(4) Subject to compliance with the reserve requirements for demand
deposits, receive demand deposits any time after the earliest of one of
the following dates:

(a) When federal regulatory authorities eliminate the interest rate
differentials between bank time accounts and federal association time
accounts.

(b) When federal legislation is enacted permitting charters for
federal associations to include demand deposit authority.

(c) When federal regulatory authorities permit demand deposits for
federal associations.

(5) Subject to regulations of the United States Treasury
Department, serve as depositories for federal taxes or as treasury tax
and loan depositories, and satisfy any requirements in connection
therewith including establishing tax and loan accounts and note accounts
(which are not classified as savings accounts or savings deposits), which
are subject to the right of immediate withdrawal or call, and may require
pledging collateral.

(6) Participate in future and option transactions through regulated
or recognized markets, subject to rules prescribed by the Director of the
Department of Consumer and Business Services. [1975 c.582 §77; 1979 c.863
§4; 1997 c.631 §536; 1999 c.107 §14]Notwithstanding any limitation, condition or prohibition in this
chapter and to carry out the purposes of this chapter, the Director of
the Department of Consumer and Business Services may adopt rules
permitting associations to exercise any right, power or privilege
conferred by federal law or regulation on federal associations doing
business in this state. The director may adopt such a rule if the
director finds that the exercise of any such right, power or privilege
serves the public convenience and advantage. [1975 c.582 §78](1) A savings association may borrow money for any of its
corporate purposes, when authorized by proper resolution of its board of
directors. However, the aggregate indebtedness of an association
outstanding at any one time shall not exceed 35 percent of its assets.

(2) Notwithstanding the limitation in subsection (1) of this
section, an association may:

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

(b) Borrow or obtain advances from the Federal Home Loan Bank or
other similar federal or state agency in such amounts and upon such terms
as may be prescribed by such bank or agency.

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

(3) An association may borrow from and lend to other savings
associations or federal associations.

(4) When the Director of the Department of Consumer and Business
Services considers an indebtedness of an association incurred under this
section to be detrimental to the interests of its account holders or
other creditors, the director shall require the association to change or
reduce its indebtedness to an extent the director considers reasonable,
giving the association a reasonable time in which to effect such change
or reduction of indebtedness.

(5) A savings association may assign or pledge any property of the
association, or repledge any shares of the stock pledged to the
association, as collateral security for loans obtained for any of its
corporate purposes.

(6) Any pledgee or other lawful holder of any note or other
evidence of indebtedness due to an association, has the right to enforce,
in the pledgee’s or holder’s own name or in the name of the association,
all appropriate remedies to enforce collection, whether or not the stock
described in connection with the note is held by such pledgee or holder.

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

(a) Secured creditors.

(b) Financial institutions, as defined in ORS 706.008.

(c) Other creditors, including savings account holders, unless the
bylaws of the association provide a different order of preference between
account holders and other creditors.

(d) Stockholders. [Formerly 722.130; 1981 c.472 §14; 1997 c.631
§537] (1) A savings association may
issue and sell its capital notes or debentures with the prior approval of
the Director of the Department of Consumer and Business Services and
subject to any sinking fund or other conditions the director may impose.
An association shall also have the prior approval of a majority of the
stockholders owning a majority of the issued and outstanding shares of
stock of the association to issue convertible capital notes or debentures.

(2) Capital notes or debentures issued by a stock association may
be converted into stock in accordance with provisions approved by the
director and contained in the capital notes or debentures. Convertible
capital notes or debentures may be issued without offer thereof to
existing stockholders if so authorized by the director provided that the
right of preemption does not otherwise exist.

(3) Capital notes and debentures shall be an unsecured indebtedness
of the association and shall be subordinate to the claims of account
holders and all other creditors of the association, regardless of whether
the claims of account holders or other creditors arose before or after
the issuance of such debentures or capital notes. In the event of
liquidation, all account holders and other creditors of the association
shall be entitled to be paid in full before any payment shall be made on
account of principal or interest on capital notes or debentures. Capital
notes and debentures shall contain a statement of the rights and
priorities of the lenders.

(4) The amounts of outstanding capital notes or debentures legally
issued by an association shall be treated as capital for the purpose of
computing general reserve requirements. [1975 c.582 §80; 1979 c.863 §5] A domestic association may, in
addition to other powers granted by this chapter, conduct a trust
business. In the conduct of a trust business an association may exercise
all the powers of a trust company, as defined by ORS 709.150, upon
compliance with the laws of this state relating to the regulation of a
trust business. [1975 c.582 §81]A savings association may act as trustee or
custodian within the contemplation of subsections (d) and (f) of section
401 and subsection (a) of section 408 of the Internal Revenue Code of
1954, as amended; however, an association shall not have the power to
invest assets received as such a trustee or custodian other than in
savings accounts of the association unless it complies with ORS 722.212.
[1975 c.582 §82]SAVINGS OPERATIONS The
relationship between an association and its account holders is that of
debtor and creditor. [1975 c.582 §83] (1) A savings account may be opened and
owned by any one or more persons, by a public officer, or a political
subdivision or other governmental unit. Deposits to savings accounts may
be made only in cash or its equivalent. Except as limited by the board of
directors from time to time, an account holder may make additions to a
savings account in such amounts and at such times as the account holder
may elect. An association may refuse to issue, renew or continue a
savings account.

(2) A savings association may issue any type of savings account
contract not prohibited by this chapter or other applicable law, or by
the rules adopted pursuant thereto. Any special terms and provisions
applicable to a savings account, the ownership thereof and the conditions
upon which withdrawals may be made shall be clearly and truthfully set
forth in writing.

(3) A savings association shall not offer or issue any savings
account contract unless the terms of the contract and the forms used to
evidence ownership of the account have been approved by the Director of
the Department of Consumer and Business Services. The evidence of
ownership of a savings account is not subject to ORS chapter 78.

(4) Transfer of a savings account or any interest therein is not
binding upon the association until the transfer has been made on the
books of the association. The association may treat the holder of record
of a savings account as the owner thereof for all purposes until a
transfer has been made on the books of the association. This subsection
does not apply to negotiable certificates of deposit or other negotiable
instruments issued or caused to be issued by an association. [1975 c.582
§84; 1981 c.472 §15; 1985 c.676 §60] (1) An account
holder may withdraw part or all of the funds of the account holder
subject to the terms applicable to the savings account of the account
holder.

(2) The Director of the Department of Consumer and Business
Services shall prescribe by rule:

(a) The maximum penalty that may be applied by an association for
premature withdrawal from a savings account; and

(b) The conditions under which the penalty may be applied.

(3) An account holder may withdraw all or part of the account
pledged as security for any purpose only in accordance with the terms of
the pledge. [1975 c.582 §85](1) A savings association or federal
association shall allow an account holder who deposits an item in the
account holder’s account to draw against the item within the time period
applicable to that item under a schedule adopted by the Director of the
Department of Consumer and Business Services.

(2) Except as provided in subsection (3) of this section, in any
agreement between a savings association or federal association and its
customer, the savings association or federal association may not specify
a period of time for purposes of drawing on an item that is longer than
any applicable period specified in the schedule adopted by the director.

(3) This section does not prohibit a savings association or federal
association and its customer from agreeing to a longer period than that
specified in the schedule adopted by the director for drawing against
items because of special circumstances, if the agreement is not contained
in a preprinted form and is entered into by the savings association or
federal association only in special circumstances.

(4) The provisions of this section do not alter or impair any right
or obligation under ORS chapter 74.

(5) Savings associations and federal associations shall disclose in
writing the schedule adopted by the director and in effect on the date of
the disclosure. For persons who became account holders prior to the date
on which the director adopts a schedule and who remain account holders
thereafter, the disclosure shall be made within 30 days after the
director adopts the schedule. For persons who become account holders
after the date on which the director adopts the schedule, the disclosure
shall be made prior to the opening of the account holder’s account.

(6) Every savings association and federal association shall post or
provide in a conspicuous location in its principal place of business and
at each branch a notice stating the schedule adopted by the director.

(7) As used in this section, “item” has the meaning given that term
in ORS 74.1040 and includes, without limitation, checks, negotiable
orders of withdrawal and share drafts. [1987 c.491 §6; 1997 c.631 §538]
Unless the written savings account contract provides otherwise, when a
minor or other person under legal disability holds a savings account, the
association or federal association may pay out the funds to such person
or the assigns of such person with like effect as if such person were of
full age and legal capacity. Such payment shall be in all respects valid
and a complete discharge of the obligation of the association or federal
association as to the amount so paid. [1975 c.582 §86; 1987 c.658 §2](1) On the death of an account holder or a holder of a
demand deposit account, if the savings liability of an association or
federal association on all savings accounts of the deceased, and the
amounts held in all demand deposit accounts of the deceased, is $25,000
or less, the association or federal association may, upon receipt of an
affidavit from the person claiming the account, pay the withdrawal value
of the accounts of the deceased holder:

(a) To the surviving spouse;

(b) If there is no surviving spouse, to the surviving children 18
years of age or older;

(c) If there is no surviving spouse or surviving children 18 years
of age or older, to the surviving parents; or

(d) If there is no surviving spouse, surviving child 18 years of
age or older or surviving parent, to the surviving brothers and sisters
18 years of age or older.

(2) If the deceased account holder or holder of a demand deposit
account received public assistance pursuant to ORS chapter 411 or 414,
the Department of Human Services may claim such withdrawal value by
filing an affidavit in the form prescribed by subsection (3) of this
section and the Department of Human Services shall be preferred to all
other claimants except a surviving spouse.

(3) The affidavit of the person or the Department of Human Services
claiming the account shall:

(a) State where and when the account holder or holder of a demand
deposit account died;

(b) State that the total withdrawal value of all savings and demand
deposit accounts of the deceased holder in all associations in Oregon,
including federal associations, does not exceed $25,000;

(c) Show the relationship of the affiant or affiants to the
deceased holder; and

(d) Embody a promise to pay the expenses of last sickness, funeral
expenses and just debts of the deceased out of the account to the full
extent of the account if necessary, in the order of priority prescribed
by ORS 115.125, and to distribute any remaining moneys to the persons who
are entitled to those moneys by law.

(4) In the event the decedent died intestate without known heirs,
an estate administrator of the Department of State Lands appointed under
ORS 113.235 shall be the affiant and shall receive the withdrawal value
of the accounts as escheat property.

(5) A savings association or federal association is under no
obligation to determine the relationship of the affiant to the deceased.
Payment made in good faith to the person or the Department of Human
Services or an estate administrator of the Department of State Lands
making the affidavit is a full acquittance and release of the association
or federal association for the amount so paid.

(6) A probate proceeding is not necessary to establish the right of
the surviving spouse, surviving children, surviving parent or surviving
brothers and sisters to withdraw an account as provided by this section.
However, if a personal representative is appointed in an estate of a
deceased person whose account has been withdrawn under this section, the
person or the Department of Human Services withdrawing the account shall
account for it to the personal 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] (1)
Personal representatives, trustees and other fiduciaries; banks, trust
companies, credit unions and similar financial organizations; charitable,
educational and eleemosynary corporations, funds and organizations; and
municipal and other public corporations and public officials may invest
funds held by them, without any order of any court, in savings accounts
of savings associations and federal associations. Such investments shall
be considered legal investments.

(2) A savings association may pledge its assets to secure public
funds as provided under ORS chapter 295. For the purposes of this
section, “public funds” has the meaning given that term by ORS 295.005.

(3) When a deposit of securities or a bond with security is
required for any purpose under the laws of this state or otherwise, a
savings account of an association or federal association is acceptable
for such a deposit or security.

(4) This section is supplemental to other laws relating to legal
investments and to the deposit of securities and the filing of bonds for
any purpose.

(5) Notwithstanding any other provision of law, when a savings
association or federal association pledges securities or any other assets
to secure public funds, the custodian of such public funds shall be a
lien creditor, as defined in ORS 79.0102, with respect to the securities
or assets which have been pledged to secure such funds. [1975 c.582 §88;
1989 c.232 §1; 1991 c.67 §191; 2001 c.445 §181]Note: For transition provisions regarding secured transactions, see
notes under 79.0628. An association may
take the pledge of a savings account of the association held by a person
other than a borrower as security or additional security for any loan
made or purchased by the association. [1975 c.582 §89] (1) A savings
association may make a service charge against a savings account if the
liability of the association on the account is $25 or less and, at the
time the charge is made, the account holder has not within the last two
years:

(a) Increased or decreased the amount of the account or presented
an appropriate record for the crediting of interest or earnings;

(b) Corresponded with the association concerning the account; or

(c) Otherwise indicated an interest in the account as evidenced by
a memorandum on file with the association.

(2) Service charges shall not be made unless 30 days prior to
making the first charge the association mails to the account holder a
notice that service charges will be made under the conditions described
by subsection (1) of this section. The notice shall be sent by registered
or certified mail to the account holder at the last-known address of the
account holder as shown on the records of the association. A service
charge made under this section shall not exceed 50 cents for any calendar
month. [1975 c.582 §90]INVESTMENT OPERATIONS(Investment Powers) (1) Every savings association shall
have on hand at all times cash and other assets readily convertible into
cash having a value of not less than a percentage of its savings
liability fixed by rule as necessary for the prudent conduct of the
affairs of the association. The Director of the Department of Consumer
and Business Services shall from time to time by rule define assets
readily convertible to cash and fix the minimum percentage of the savings
liability of any association that shall be used to determine the value of
cash and other assets necessary to comply with this subsection. The
director may consider an association to be in compliance with this
section if the association satisfies applicable federal liquidity
requirements for federally insured associations.

(2) Cash and assets readily convertible to cash, within the limits
required by subsection (1) of this section, shall not be pledged or
otherwise held as security for the payment of any obligation of the
association.

(3) Unless an association is in compliance with subsection (1) of
this section, it shall not make any loan or investment without the prior
approval of the director, except:

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

(b) To invest in a loan secured wholly by pledge of a savings
account issued by the association; or

(c) To honor a loan commitment made prior to the association’s
failure to meet the requirement of subsection (1) of this section. [1975
c.582 §91; 1981 c.472 §17] (1) A savings
association may invest its assets without limit in:

(a) Assets readily convertible to cash, as defined under ORS
722.302, and deposits and accounts in and obligations of banks;

(b) Bonds and other obligations of the United States; and

(c) Bonds and other obligations that are guaranteed as to principal
and interest by the United States and issued by any agency of the United
States.

(2) A savings association may invest, and may have invested at any
time, not to exceed 30 percent of its assets in:

(a) Bonds, other obligations and stock approved by the Director of
the Department of Consumer and Business Services and issued by an agency
of the United States or a federally sponsored instrumentality; and bonds
and other obligations approved by the director and issued by a state, or
by a city, county, municipal corporation, political subdivision or
special district of any state; the preferred stock, bonds and obligations
of a corporation domiciled in the United States, which are approved by
the director and are rated at the time of purchase in one of the four
highest grades by a recognized service organization that has been
regularly engaged for a period of 10 years or more in rating or grading
bonds; or loans secured by such obligations;

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

(c) Stock and obligations of service corporations, as authorized by
ORS 722.308;

(d) Other prudent investments as authorized by ORS 722.306;

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

(f) Commercial paper, certificates of deposit, banker’s acceptances
and similar commercial items commonly used in trade or business and
issued or guaranteed by an insured institution, as defined in ORS 706.008.

(3) An association shall not invest any assets as described by
subsection (2)(c) to (f) of this section unless the association on its
last monthly closing date satisfied or could have satisfied its minimum
general reserve and net worth requirements as determined under ORS
722.142.

(4) If the director finds that notwithstanding subsection (3) of
this section, it is an unsafe or unsound practice for an association to
exercise the powers granted by subsection (2)(c) to (f) of this section,
the director may issue a cease and desist order directing the association
to cease exercising such powers. An order issued under this subsection
may be based on, but need not be limited to, a finding that the financial
condition or management capability of the association is not adequate to
exercise such powers and assume the risks involved in the exercise of
such powers.

(5) A savings association may invest its assets in a service
corporation as provided in ORS 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] (1) A savings association
may invest its assets in a manner not expressly prohibited by law if such
investments are made in the exercise of the judgment and care under the
circumstances then prevailing which persons of prudence, discretion and
intelligence exercise in the management of their own affairs not in
regard to speculation but in regard to the permanent disposition of their
funds, considering the probable income as well as the probable safety of
their capital. An association shall not invest in the voting common stock
of a corporation unless the association acquires a majority of the shares
of the voting stock of the corporation.

(2) Investments held at any one time under this section shall not
exceed in the aggregate an amount equal to 50 percent of the net worth
accounts of the association on its last monthly closing date. An
association is not required to divest itself of any investments made
under this section if the investments met the requirements of this
section at the time they were made.

(3) If the Director of the Department of Consumer and Business
Services has reason to believe that loans or other investments made
pursuant to this section are not prudent, proper or sound investments or
are not, directly or indirectly, yielding an income or benefit, the
director may direct the association to report to the director under oath
the amount and nature of such loans or investments and any security
therefor, their market value and other pertinent information. If the
director thereafter determines that any such investment is not prudent,
proper or sound, the director may issue an order directing the
association to dispose of such investment within a reasonable time as
designated by the director. [Formerly 722.497; 1979 c.863 §7](1) An association may invest in the stock and obligations of one
or more service corporations. However, an association shall not make such
an investment, without the prior approval of the Director of the
Department of Consumer and Business Services, when any of the voting
stock of the service corporation is available for purchase by or owned by
persons other than savings associations or federal associations.

(2) The director shall, by rules adopted to carry out this section,
prescribe a maximum percentage of assets not to exceed five percent that
an association may invest in service corporations.

(3) An association may not cause to be performed, by contract or
otherwise, any of the services for itself, whether on or off its
premises, unless assurances satisfactory to the director are furnished to
the director by both the association and the person or organization
performing the services that the performance of the services will be
subject to regulation and examination by the director to the same extent
as if the services were performed by the association itself on its own
premises.

(4) This section does not apply to a service corporation described
in ORS 722.309. [1975 c.582 §94; 1983 c.37 §36; 1983 c.321 §6; 1997 c.631
§540](1) As
provided in this section:

(a) A savings association may invest its assets in a service
corporation described in this section.

(b) A savings association may organize a service corporation
described in this section as a wholly owned subsidiary of the savings
association and invest the savings association’s assets in the
corporation.

(2) A savings association may invest in or organize and invest in a
service corporation under subsection (1) of this section if the following
conditions are satisfied:

(a) The projects undertaken by the service corporation must be
predominantly of a civic, community or public nature, and not merely of a
private or entrepreneurial nature.

(b) The savings association’s investments in the service
corporation must comply with the prudent investment rule under ORS
722.306.

(c) The savings association’s aggregate investment in service
corporations and their projects must not exceed one percent of the assets
of the savings association.

(d) The savings association must submit to the Director of the
Department of Consumer and Business Services its proposal for investing
in or organizing and investing in a service corporation and the proposal
must receive the director’s approval.

(e) The membership of the board of directors of the community
development corporation must be representative of the community in which
the corporation is to operate.

(f) If the corporation is organized under the Oregon Nonprofit
Corporation Law, the stock of the corporation purchased by the savings
association, or the savings association’s membership in the corporation
if it does not issue stock, shall be carried on the books of the savings
association at a value not exceeding $1.

(3) A service corporation may be organized under this section as a
for-profit corporation under ORS chapter 60 or as a nonprofit corporation
under the Oregon Nonprofit Corporation Law.

(4) A service corporation to which this section applies is a
corporation that is authorized under its articles of incorporation to:

(a) Acquire real estate. This paragraph does not authorize real
estate investment that is primarily speculative in nature.

(b) Make equity investments in small businesses and in development
projects that primarily benefit small businesses.

(c) Participate in joint ventures with outside partners. [1983
c.321 §8; 1987 c.197 §21]Note: 722.309 and 722.311 were added to and made a part of ORS
chapter 722 by legislative action but were not added to any smaller
series therein. See Preface to Oregon Revised Statutes for further
explanation.(1) A savings association shall
submit to the Director of the Department of Consumer and Business
Services, on an application form designed by the director, its proposal
to organize or invest in a service corporation under ORS 722.309. The
savings association shall describe in detail on the application the scope
of development activities that the service corporation will undertake.
The director shall approve or disapprove the application as provided in
this section. If the director approves an application to organize a
service corporation, the savings association shall incorporate the
proposed corporation as provided by law.

(2) The director may submit an application to any appropriate state
agency or city, county or other local government for its advice and
assistance on determining the need and practicability of the projects
proposed in the application. [1983 c.321 §9]Note: See note under 722.309.(1) An association
may invest its funds in real property, including property convenient for
locations for the transaction of its business.

(2) An association shall not invest or obligate itself to invest
more than 10 percent of its assets in the total cost of real property,
including improvements thereon, for its business locations, without the
prior approval of the Director of the Department of Consumer and Business
Services.

(3) An association may invest a reasonable amount in property such
as furniture, fixtures and equipment, for use in carrying on its own
business.

(4) An association shall not enter, or at any time carry on its
books, the real property and improvements thereon owned by it under
subsection (1) of this section at a valuation exceeding actual cost to
the association. Investments in improvements to real property held under
this section and investments under subsection (3) of this section shall
be reduced annually by direct depreciation or creation of a depreciation
reserve. [1975 c.582 §95] (1) A
savings association may purchase at any sale, public or private, any real
property upon which it has a mortgage, judgment, lien or other claim. It
may lease, sell, convey, exchange or mortgage such property, without
regard to the requirements of ORS 722.322 (7), or the association may
hold such property as an investment under ORS 722.312.

(2) An association shall not enter or, except as provided by
subsection (3) of this section, carry on its books real property acquired
pursuant to subsection (1) of this section at a value in excess of the
amount expended by the association in the acquisition of the property.
The amount expended may include the principal balance on the loan and
taxes, insurance, attorney fees and court costs, to the date of
acquisition of the property, less the withdrawal value of any savings
account pledged as security for the loan.

(3) If an association makes permanent improvements on property
acquired by the association pursuant to this section, it may add the cost
of such improvements to the value of the property. [1975 c.582 §96](Loans) (1) A savings association may invest any
percentage of its assets in loans secured by mortgages or real estate
contracts on interests in real property. Investments made by an
association under this section shall be made in accordance with sound
lending practices and the rules adopted by the Director of the Department
of Consumer and Business Services to carry out this section.

(2) A loan on the security of a mortgage shall not exceed 100
percent of the appraised value of the security. The term of a straight
loan shall not exceed five years.

(3) If a loan is secured by a mortgage which is junior to prior
mortgages or liens, the sum of the loan amount and the amount unpaid upon
prior encumbrances, excluding taxes not due, shall not exceed the
applicable limitations of this chapter.

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

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

(b) The association is entitled to be subrogated to all rights of
the lessee under the leasehold.

(5) A mortgage shall not be subject to any prior mortgage, liens or
encumbrances against the property unless the aggregate amount of such
mortgage and any prior mortgage, liens and encumbrances does not exceed
100 percent of the appraised value of the property.

(6) An association may invest in real estate contracts if the
principal amount due under the contract does not exceed 100 percent of
the appraised value of the property and the association holds or acquires
the title to the property covered by the contract.

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

(a) Make a loan upon the security of an interest in real property
in excess of 90 percent of the appraised value thereof; or

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

(8) An association may renew or extend a loan made or contract
purchased under this section if, as renewed or extended, the loan or
contract complies with the limitations and conditions provided under this
section 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 a leasehold.

(b) “Prior liens and encumbrances” does not include:

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

(B) A sublease, in case the loan is secured by a mortgage on a
leasehold interest. [1975 c.582 §97; 1979 c.863 §8] A savings association
shall not make or acquire a loan secured by an interest in real property
except upon the report, in writing, of an appraiser appointed by the
association. The report shall state the fair market value of the property
to be used as security. Each appraisal report shall contain sufficient
information and data concerning the appraised real property interest to
substantiate the fair market value of the property as determined by the
appraiser. [1975 c.582 §98](1) An association may make a loan or
invest in a real estate contract described by ORS 722.322 (7) if the
excess is guaranteed or insured against loss by a mortgage guarantee
insurance company licensed to transact insurance in this state. When the
excess does not exceed 95 percent of the appraised value, an association
may, in lieu of such guarantee or insurance, establish an excess reserve
account for the payment of losses.

(2) When an excess reserve account is established under subsection
(1) of this section, the association shall from time to time place in the
excess reserve account sums adequate to maintain a balance in the account
equal to five percent of the entire unpaid balance on all such loans and
contracts. Any losses on such loans and contracts shall be charged to the
excess reserve account until it is exhausted and, after that, such losses
may be charged to earned surplus or other reserve accounts. [1975 c.582
§99; 1979 c.863 §9] A savings association may invest
its assets in loans to its account holders on the security of its savings
accounts, but any such loan shall not exceed 100 percent of the
withdrawal value of the security given. [Formerly 722.415]
(1) A savings association may invest its funds in loans secured by the
pledge of policies of life insurance. Any such loan shall not exceed the
cash value of the policy. The assignment of the policy shall be
acknowledged by the insurer.

(2) A savings association may invest its funds in loans for the
payment of expenses of college or professional education if the loans are
insured or guaranteed as provided by ORS 722.352 (2). For the purpose of
this subsection:

(a) “College education” means education at an institution that
provides an educational program for which it awards a bachelor’s or
higher degree, or at an institution that provides not less than a
two-year program which is acceptable for full credit toward such a degree.

(b) “Professional education” means any course of study or training
designed to increase the ability of a person to obtain or advance in
employment of any kind. [1975 c.582 §101; 1995 c.343 §70]A savings association may
invest its assets in:

(1) Loans, with or without security, for the alteration, repair or
improvement of real property;

(2) Loans, with or without security, for the equipping or
furnishing of residential property;

(3) Loans, advances of credit and the purchase of obligations
representing loans and advances of credit for the purpose of financing
the sale or purchase of manufactured dwellings; and

(4) Advances of credit for the purpose of financing the
construction of residential property.

(5) Loans to nonservice corporation subsidiaries not to exceed two
percent of association assets provided that the association controls a
majority of the shares of voting stock of the subsidiary. [1975 c.582
§102; 1979 c.863 §9a] A savings association may make personal
loans, secured or unsecured, evidenced by promissory notes. Each note
shall require repayment in full within a period not to exceed 10 years
from the date of the note. An association shall not, under this section,
lend more than $20,000 to one individual at any one time. The aggregate
amount of such loans shall not exceed 10 percent of the assets of the
association. [1975 c.582 §103; 1977 c.368 §1; 1979 c.863 §10]
(1) A stock association may invest its assets in loans to the employees,
including officers, of the association and any wholly owned subsidiary,
to enable them to purchase stock of the association or in a service
corporation owned by the association, but:

(a) The aggregate amount of such loans outstanding at any one time
shall not exceed one percent of its assets;

(b) The amount so loaned to any one person shall not exceed 90
percent of the fair market value or cost of the stock, whichever is
lower, at the time of the purchase;

(c) The association shall obtain or retain a security interest in
the stock so acquired until the loan is paid in full;

(d) The maximum amount due on such loans to one person at any one
time shall not exceed $20,000; and

(e) The terms of the loan must provide for repayment within a
period of not more than 10 years.

(2) Except as provided by subsection (1) of this section, an
association shall not loan any of its funds upon the security of its own
stock. [Formerly 722.424; 1979 c.863 §11](1) Except as provided by subsection (2) of this
section, an association shall not directly or indirectly make a loan to
or for the benefit or use of an individual, partnership, association or
corporation or subsidiary thereof if:

(a) Any officer or director of the lender has, or represents to the
public to have, a contract or right to control or manage the borrower;

(b) Any officer or director of the lender is the proprietor of or a
partner in the borrower; or

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

(2) An association may make any loan to a director or officer of
the association that is authorized under ORS 722.302 to 722.356. However,
if the loan is made to an executive officer or director, all of the
following conditions must be met:

(a) An independent appraiser shall be employed by the lending
association to appraise the security for the loan.

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

(c) A director who is directly or indirectly interested in the loan
shall fully disclose to the other directors on the board of the lending
association the director’s interest in the loan or in the borrower. The
director shall abstain from voting on the question of approval of the
loan.

(d) The loan must be made under a written agreement.

(3) The directors of a savings association, if the association
makes loans to its directors, officers or employees, shall establish
written procedures for approving such loans.

(4) The Director of the Department of Consumer and Business
Services by rule may exclude from the applicability of subsection (2) of
this section any indebtedness for which the requirements of subsection
(2) of this section create, according to the director, an excessive
burden in regard either to the savings association or to the borrower
without an offsetting regulatory benefit.

(5) Notwithstanding the conditions described in subsection (2)(a),
(b) and (c) of this section, the directors of the lending association
need not first approve a loan to an executive officer or director unless
the loan, when aggregated with all other loans to the executive officer
or director and to all related interests of the executive officer or
director, as defined by ORS 722.458, exceeds $25,000. [1975 c.582 §105;
1979 c.863 §12; 1985 c.786 §59](General Provisions) (1) A savings
association may participate with another lender or lenders in making
loans of any type that an association may otherwise make, if the other
lender or each of the other lenders is:

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

(b) Insured by the Federal Deposit Insurance Corporation;

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

(d) A Federal Housing Administration approved mortgagee; or

(e) Another lender approved by the Director of the Department of
Consumer and Business Services.

(2) Without regard to any term or loan-to-security limitation
provided by ORS 722.302 to 722.356, a savings association may make, buy
and sell any loan, secured or unsecured, if the loan is insured or
guaranteed. A loan shall be considered insured or guaranteed if:

(a) It is insured or guaranteed in any manner in part or in full by
the United States or this state, or an instrumentality thereof; or

(b) A commitment so to insure or guarantee or a conditional
guarantee has been issued.

(3) A savings association may buy, sell or participate in the
purchase or sale, with or without servicing, of all or a portion of any
loan or of a pool of loans which may be evidenced by a participation
certificate, mortgage-backed bond or note, or mortgage pass-through
certificate. The loans must be of a type eligible for origination and
investment under this chapter. If the association is a buyer, the
originator and services must qualify under subsection (1) of this
section. [Formerly 722.422; 1979 c.863 §13; 1999 c.107 §15]
(1) A savings association shall lend no more than five percent of its
total assets on the security of one property or to one person. However,
an association with assets under $500,000 may lend up to a maximum of
$40,000 in loans on one property or to one person.

(2) ORS 708A.255 applies to interest or other charges a savings
association or a federal association may contract for and receive for 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](1) A savings
association shall not make, purchase or hold any investments or loans
except investments and loans of the kinds authorized by ORS 722.302 to
722.356. However, a loan or investment made in violation of this
subsection shall be due and payable according to its terms and the
obligation thereof shall not be impaired.

(2) A director or officer of an association who knowingly violates,
participates in or assents to a violation of, or who knowingly permits
any of the officers or agents of the association to violate, subsection
(1) of this section is liable individually for all losses that the
association, its account holders or stockholders sustain in consequence
of such violation.

(3) The Director of the Department of Consumer and Business
Services may require a director or officer of an association who
knowingly violates, participates in or assents to a violation of
subsection (1) of this section, or who knowingly permits any officer or
agent of the association to violate subsection (1) of this section, to
deposit with the association an indemnity bond, insurance or collateral.
Such deposit shall be of a kind and amount sufficient to indemnify the
association against losses that the association, its account holders or
stockholders may sustain in consequence of such violation. The amount
considered sufficient to indemnify the association shall be determined by
the director. When an unauthorized investment has been sold or disposed
of without recourse, the director shall direct all or that part of the
indemnity remaining after deducting any loss to be released. When the
balance of an unauthorized loan has been reduced to an amount which would
permit the loan to be made in accordance with ORS 722.302 to 722.356, the
director shall direct the indemnity to be released. In making a
determination under this section, the director may require an independent
appraisal of the investment or the loan security.

(4) In addition to subsections (2) and (3) of this section,
whenever the director determines that an association has made an
investment or loan that is unsafe or unsound, or is not authorized by ORS
722.302 to 722.356, the director may order the association to do one or
both of the following:

(a) Dispose of the investment or loan; or

(b) Establish a specific reserve not to exceed the book value of
the investment or the unpaid balance of the loan and to maintain such
reserve until the investment is disposed of or the loan is paid. [1975
c.582 §108]SUPERVISION AND ENFORCEMENT(Supervision) (1) In accordance with ORS chapter 183, the Director
of the Department of Consumer and Business Services may adopt rules for
the purpose of carrying out this chapter.

(2) In addition to the notice requirements of ORS chapter 183,
before the director adopts a rule, the director shall submit a copy of
the rule to each savings association. [1975 c.582 §112; 1985 c.762 §63] The Director
of the Department of Consumer and Business Services shall publish or
revise at least once every two years, for distribution to savings
associations and such other persons as may be interested, this chapter
and related statutes, together with rules adopted by the director and
decisions, opinions and rulings made regarding any rule or section. The
director may fix and collect a reasonable charge, not to exceed the cost
of publication, for copies of such publications. [1975 c.582 §115; 1985
c.762 §67](1) Except as provided in subsections (2) and
(3) of this section, the records of the Department of Consumer and
Business Services pertaining to the administration of this chapter are
available for public inspection unless the Director of the Department of
Consumer and Business Services determines in the particular instance that
the public interest in disclosure of the records is outweighed by the
interests of an association or its directors, officers, employees,
members and customers in keeping the records confidential, or that the
records are exempt from disclosure under ORS 192.501 to 192.505. A
determination by the director under this subsection is subject to review
under ORS 192.410 to 192.505.

(2) Except as provided in subsections (6) and (7) of this section,
the following records of the department pertaining to the administration
of this chapter are exempt from disclosure or production and shall be
treated as confidential as provided in ORS 705.137:

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

(b) Investigatory information concerning persons subject to
investigation by the director under ORS 722.024, 722.026, 722.036,
722.134, 722.459 or 722.506, and financial statements of such persons.

(c) Proprietary information.

(d) Audits submitted to the director under ORS 722.434 (3).

(e) Reports submitted to the director under ORS 722.458.

(f) Stockholder lists.

(g) The name of a depositor or debtor described in subsection (3)
of this section and the amount of the person’s deposit or debt.

(3) The director or any other person employed by the department and
acting under this chapter shall not knowingly disclose the name of any
person who is a depositor or debtor of an association, or the amount of
the person’s deposit or debt, except that the director or the employee
may disclose such information as may be necessary in the performance of
the director’s or employee’s official duty including any duty under ORS
295.018.

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

(5) A civil penalty imposed by the director shall become subject to
public inspection after the 20th day after the director imposes the civil
penalty.

(6) Notwithstanding subsection (2) of this section, the director
may disclose any record of the section specified in this subsection
pertaining to an association that has been liquidated if the director
determines in the particular instance that the public interest in
disclosure of the record outweighs the interests of the association or
its directors, stockholders, officers, employees or customers in keeping
the record confidential. Under no circumstances, however, shall the
director disclose any such record or portion thereof that contains any
proprietary information or any information relating to the individual
financial activities or affairs of persons unless the director concludes
that those activities or affairs were a direct and substantial
contributing factor in the failure of the association. This subsection
applies to the following records of the section:

(a) Examination reports and work papers, directives, orders and
correspondence relating to examination reports;

(b) Investigatory information concerning persons subject to
investigation by the director under ORS 722.024, 722.026, 722.036,
722.134, 722.459 or 722.506;

(c) Audits submitted to the director under ORS 722.434 (3); and

(d) Reports filed under ORS 722.458.

(7) Notwithstanding ORS 40.270, an officer of the department may be
examined concerning records that are exempt from disclosure under
subsection (1), (2) or (3) of this section and the records are subject to
production if the court before which a civil or criminal action is
pending finds that such examination and production is essential for
establishing a claim or defense. In making a finding under this
subsection, if the court views the records, the court shall do so in
camera.

(8) In addition to the authority granted the director in ORS
705.137, all records of the department pertaining to the condition of
associations may be furnished to:

(a) Representatives of savings and loan departments of other states.

(b) Representatives of the Federal Housing Finance Board,
Washington, D.C., a Federal Home Loan Bank or other federal or state
financial agency organized under the laws of the United States or of this
state and authorized to loan to or otherwise act as a reserve or insuring
agency for savings associations.

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

(9) If the director is requested to disclose any record subject to
this section and the record contains both material that is exempt from
disclosure under this section or any other provision of law and material
that is not exempt from disclosure, the director shall separate the
exempt and nonexempt material and shall disclose only the nonexempt
material. [1985 c.786 §60; 1985 c.762 §66a; 1987 c.373 §58; 1999 c.107
§7; 2001 c.377 §24] (1) Every
approval or rejection by the Director of the Department of Consumer and
Business Services given pursuant to this chapter and every communication
having the effect of an order or 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 principal office of the association; and

(c) Presented to the board of directors of such association at its
next regular meeting or at a special meeting called for such purpose and
noted in the minutes of the meeting.

(2) All notices required by this chapter shall be in writing. All
notices issued or required to be issued by the director shall be sent by
mail and shall become effective upon deposit of the notice in the mail.
[1975 c.582 §116] (1) Every savings
association shall, on January 1 of each year, or within 30 days
thereafter, file with the Director of the Department of Consumer and
Business Services a full detailed statement of its financial condition on
the last day of the preceding month and of the business transacted during
the preceding year. The statement shall be verified and shall set forth
the amount and the character of its assets and liabilities and shall
contain such other information and be in such form as the director may
prescribe.

(2) The director may require additional statements from any or all
associations, as of the close of business at any date. The director shall
allow not less than 10 days in which to prepare and file a report under
this subsection.

(3) Every savings association shall once each year cause an audit
to be made of its financial condition by an independent auditor. A copy
in full of the audit required by this subsection, and of any other audit
made by an association, with findings of the auditor and all statements,
comments and recommendations made by the auditor on the audit, shall be
filed with the director forthwith but not later than 120 days after the
last day of the period audited. The director shall review all audits and
reports and may approve or reject any report, in whole or in part.
[Formerly 722.165](1) Except as provided under subsections (4) and (5) of this section,
every two years, or more often if the Director of the Department of
Consumer and Business Services considers it advisable, the director,
either in person or through an examiner, shall make an examination of the
books, records and affairs of every domestic and foreign association.

(2) The examiner shall prepare a report of the examiner’s findings
and file it with the director. The examiner shall include in the report
any violation of law or any unauthorized or unsafe practices of the
association disclosed by the examination.

(3) The director shall furnish a copy of the report to the
association examined and, upon request, may furnish a copy of or excerpts
from the report to the Federal Housing Finance Board, Federal Home Loan
Bank or other federal or state agency authorized to loan to or otherwise
act as an insuring agency for savings and loan associations. When the
director furnishes a copy of a report of an association to an agency
under this subsection, the director shall immediately inform the
association of the agency making the request and the part of the report
furnished.

(4) The director may participate in any program offered by the
Federal Housing Finance Board, a Federal Home Loan Bank or the Federal
Deposit Insurance Corporation that provides for joint alternate
examinations of savings associations by the director and the Federal
Housing Finance Board, a Federal Home Loan Bank or the Federal Deposit
Insurance Corporation.

(5) Instead of performing an examination under subsection (1) of
this section, the director may accept an examination or report made by
the Federal Housing Finance Board or a Federal Home Loan Bank or by the
regulator of savings associations in another state. [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](1) If in the opinion of the Director of the Department of
Consumer and Business Services the examination conducted under ORS
722.436 fails to disclose the true financial condition of an association,
the director may in order to ascertain its true financial condition:

(a) Make an extended audit or examination of the association or
cause such an audit or examination to be made by an independent auditor.

(b) Make an extended revaluation of any of the assets or
liabilities of the association or cause an independent appraiser to make
such a revaluation.

(2) The director shall collect from the association a reasonable
sum for actual and necessary expenses of such an audit, examination or
revaluation. [1975 c.582 §119](1)
Except as provided by ORS 40.225 to 40.295, the Director of the
Department of Consumer and Business Services and any of the examiners,
auditors and appraisers of the Department of Consumer and Business
Services:

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

(b) May subpoena witnesses and administer oaths or affirmations in
the examination of any director, officer, agent or employee of an
association, its subsidiaries or affiliates or of any other person in
relation to its affairs, transactions and conditions; and

(c) May require the production of records, books, papers, contracts
and other documents.

(2) Each witness who appears before the director under a subpoena
shall receive the fees and mileage provided for witnesses in ORS 44.415
(2).

(3) If a person fails to comply with a subpoena so issued or a
party or witness refuses to testify on any matters, the judge of the
circuit court for any county, on the application of the director, shall
compel obedience by proceedings for contempt as in the case of
disobedience of the requirements of a subpoena issued from such court or
a refusal to testify in such court. [1975 c.582 §120; 1981 c.892 §97;
1985 c.762 §69; 1989 c.980 §20] (1) The
Director of the Department of Consumer and Business Services may cause
property owned by an association or securing the loans of an association
to be appraised when, in connection with an examination or otherwise,
information with respect to any property or policies, practices,
operating results and trends of an association give evidence that:

(a) Any appraisal or valuation of the association may be excessive
or overstated; or

(b) Appraisal policies and practices may not conform with generally
accepted professional standards.

(2) In lieu of causing such appraisals to be made, the director may
accept an appraisal caused to be made by a Federal Home Loan Bank, the
Federal Housing Finance Board or by the Federal Deposit Insurance
Corporation or other insuring agency of an insured association.

(3) Unless otherwise ordered by the director, appraisal of property
pursuant to this section shall be made by an appraiser selected by the
director. The cost of such appraisal shall be paid promptly by the
association directly to the appraiser upon receipt by the association of
a statement of the cost approved by the director. The director shall
furnish a copy of the report of an appraisal made pursuant to this
section to the association forthwith but no later than 60 days following
the completion of the appraisal and may furnish a copy to the insuring
agency. [1975 c.582 §121; 1999 c.107 §9](1) The board of directors of a
savings association may, with the approval of the Director of the
Department of Consumer and Business Services, establish a branch
facility. An association shall not change the location of a branch
facility or the principal office of the association without prior notice
to and approval of the director.

(2) Except for the filing fee required under ORS 722.448, ORS
722.448 and 722.452 shall not apply to a change of location of an
existing branch facility or principal office when the distance involved
is less than one mile, nor shall ORS 722.448 and 722.452 apply to the
establishment of a drive-in facility or an automatic teller machine
within 500 feet of an existing branch facility or principal office as an
adjunct to the branch facility or principal office. [1975 c.582 §122;
1981 c.472 §22](1) When a savings association
wants to establish a new branch facility, or change the location of a
branch facility or its principal office, it shall submit to the Director
of the Department of Consumer and Business Services an application for
approval of the branch or the change. An application shall state the
community where the branch or principal office is to be located or
relocated and such other information as the director requires to
determine if the establishment or change of the branch facility or
principal office will serve the public convenience and advantage.

(2) Upon receipt of an application with the proper filing fee the
director shall promptly examine and investigate whether the application
should be granted. The director shall proceed in accordance with ORS
722.024 (1) to (4) to give notice and to conduct a hearing, if requested.
[1975 c.582 §123](1) The Director of the
Department of Consumer and Business Services shall approve an application
filed under ORS 722.448 if:

(a) The population in the community where the branch facility or
principal office is to be located, relocated or operated affords a
reasonable promise of adequate support for the branch facility or
principal office;

(b) The financial structure and earnings of the association are
adequate to support the expense of establishing the branch or relocating
the branch or principal office; and

(c) The establishment and operation of the branch facility or
relocation of the branch or principal office will serve the public
convenience and advantage.

(2) If an application is denied, the order shall contain a
statement of the reason for the denial and notify the applicant of its
right to a contested case hearing under ORS chapter 183.

(3) If an association does not commence operation of a branch
facility or change the location of a branch facility or the principal
office within a reasonable time after the date of the order approving the
application, the approval shall be revoked by the director.

(4) The director shall maintain a record of the number and location
of all branch facilities of associations. [1975 c.582 §124; 1985 c.762
§70](1) The board of directors of an association, after notice to
the Director of the Department of Consumer and Business Services, may
discontinue the operation of a branch facility. The association shall
keep the director informed in the matter and deliver to the director a
certificate of the date operation of the branch facility is discontinued.

(2) The director may for good cause revoke approval of the
operation of a branch facility by written notice to the association. The
notice shall fix a reasonable time after which the association shall
cease to operate the branch facility. [1975 c.582 §125] The
Director of the Department of Consumer and Business Services shall be
notified promptly, and in writing, stating the facts whenever it is
established that fraud, embezzlement, or misappropriation of funds or
other illegal acts exists, or apparently exists and is being investigated
by the association due to dishonesty of a director, officer, attorney,
agent or employee and the sums involved exceed or could exceed $500.
[1979 c.863 §15] A
person may not knowingly give or cause to be given to the Department of
Consumer and Business Services any document or any oral or written
statement or report that is false in any material respect, in the course
of any investigation, examination or audit by the department. [1987 c.215
§2](1) As required by rule of the Director of the Department of
Consumer and Business Services, each domestic association shall file with
the director each calendar quarter a report of outstanding extensions of
credit by the domestic association to the following persons as of the
last day of the immediately preceding calendar quarter:

(a) The managing officer and each director of the domestic
association and, if the association is a stock association, each
principal shareholder of the association.

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

(2) The report shall show for each borrower the borrower’s position
or class, the original amount of each outstanding extension of credit,
the balance due on each outstanding extension of credit and whether any
payment or portion of the balance is currently past due.

(3) For purposes of this section:

(a) A principal shareholder of a stock association or of a business
entity described in paragraph (b)(A) of this subsection is any person
who, directly or indirectly or acting through or in concert with one or
more persons, owns, controls or has the power to vote more than 25
percent of any class of voting stock of the association or business
entity. For purposes of this paragraph, a “business entity” includes but
is not limited to a corporation, partnership, trust, sole proprietorship,
association or labor union.

(b) A related interest of a person described in subsection (1) of
this section includes either of the following:

(A) Any business entity described in paragraph (a) of this
subsection in which the person is a director, partner, principal
shareholder, officer, sole owner or trustee.

(B) A borrower whose extension of credit is cosigned or indorsed by
a director, managing officer or principal shareholder of a domestic
association.

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

(4) The director shall adopt rules governing the submission of
reports under subsection (1) of this section. The director may require
any other information in the reports that the director decides is
necessary. The director may exclude from the reporting requirement:

(a) Any advance payment against accrued salary or other accrued
compensation, or an advance for the payment of expenses incurred or to be
incurred on behalf of the domestic association.

(b) Indebtedness, to a maximum set by the director, that arises by
reason of any general arrangement by which a domestic association
acquires charge or time credit accounts, or makes payments to or on
behalf of participants in a credit card plan, check credit plan,
interest-bearing overdraft credit plan or any similar open-end credit
plan.

(c) Any other indebtedness that the director declares by rule not
to be subject to the reporting requirements under subsection (1) of this
section. The director may exclude any indebtedness under this paragraph
the reporting of which, according to the director, is not necessary for
proper supervision of savings associations or creates an excessive burden
without an offsetting regulatory benefit.

(5) The director may require a domestic association to file
additional reports under this section more often than quarterly, as the
director determines is necessary. [1985 c.786 §58](1)
After a certificate of authority to commence business has been issued to
a savings association, before a person first takes office as director,
president or managing officer, the name of the person shall be submitted
to the Director of the Department of Consumer and Business Services, with
any information about the person that the director may require.

(2) The director shall investigate each person whose name is
submitted under this section to determine the character, honesty,
financial responsibility and competence of the person. In the course of
investigating any person under this section, the director may require the
person to provide additional information for the director’s further
inquiry. For the purpose of such further inquiry, the director may
require the person to submit to fingerprinting. Fingerprints acquired
under this subsection may be submitted to appropriate law enforcement
agencies, including the Federal Bureau of Investigation, for the purpose
of discovering any unlawful activities of the person.

(3) The director may disapprove the election or appointment of the
person if the director determines that the person’s character, honesty,
financial responsibility, experience or fitness does not command
confidence or warrant the belief that the person will honestly and
efficiently conduct the business of the savings association. The director
shall issue the disapproval in writing to the board of directors that
submitted the person’s name. A copy of the disapproval shall be served
personally or by certified mail upon the disapproved person. The
disapproval may be issued without a prior administrative hearing. A
disapproval under this section must be made within 30 days after the name
is submitted to the director. Thereafter, disapproval may be made only as
provided in ORS 722.468.

(4) A person whom the director disapproves under this section may
appeal the disapproval as a contested case pursuant to ORS 183.415 to
183.500. [1985 c.786 §57](Enforcement)(1) The Director of the Department of Consumer and Business
Services may institute such actions or other lawful proceedings as the
director may consider necessary for the enforcement of this chapter or
any rule, order or action adopted, issued or taken by the director
pursuant to law.

(2) If the director, from any information available to the
director, finds that an association has either overstated its assets or
understated its liabilities, the director may order the association to
establish specific reserves equal in amount to the overstatement of true
assets or the understatement of true liabilities. Such specific reserves
shall be carried as liabilities. [1975 c.582 §126] (1) On any of the following
grounds, the Director of the Department of Consumer and Business Services
may issue and serve upon an association or a director, officer, employee
or agent of an association an order to cease and desist from an unsafe or
unsound practice or a violation if:

(a) The director has reasonable cause to believe that the person to
whom the order is directed is engaging, has engaged or is about to engage
in an unsafe or unsound practice in conducting the business of the
association.

(b) The director has reasonable cause to believe that the person to
whom the order is directed is violating, has violated or is about to
violate a law or rule, an order of the director or any provision of the
articles of incorporation or bylaws of the association.

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

(a) A statement of the facts constituting the alleged unsafe or
unsound practice or violation.

(b) A provision requiring the person named in the order to cease
and desist from the practice or violation. The provision may be 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 hearing under ORS chapter 183.

(3) When the unsafe or unsound practice or the violation specified
in the order, or the continuation of the practice or violation, is likely
to prejudice the interest of the account holders or stockholders of an
association, the director may issue an order effective immediately or at
a later date. In all other cases, the order shall be effective 30 days
after the date of the order unless the person named in the order requests
a hearing thereon.

(4) An order remains in effect until it is withdrawn by the
director after a hearing or by a court order. [1975 c.582 §127; 1985
c.762 §71; 1987 c.215 §3; 1987 c.373 §59] (1) The
Director of the Department of Consumer and Business Services shall
immediately inform the board of directors of an association and may order
the suspension or discharge of an officer or employee of the savings
association, if the director finds that the officer or employee has:

(a) Directly or indirectly willfully misrepresented the
association, its types of service, its contracts or membership to
prospective members, stockholders, depositors or borrowers;

(b) Engaged in dishonest practices in the conduct of the
association’s business; or

(c) Been convicted of a misdemeanor, an essential element of which
is fraud, or of a felony.

(2) The board of directors of the association, as well as any
officer or employee addressed in an order issued under this section, may
request a contested case hearing pursuant to ORS chapter 183.

(3) An officer who is suspended or removed under this section shall
not act in any official capacity, conduct any of the business of the
association or have access to the books, records or assets of the
association either as an officer, director or stockholder, without
receiving permission from the director. [Formerly 722.225; 1977 c.166 §4;
1985 c.762 §73](Conservatorship) (1) The
Director of the Department of Consumer and Business Services may appoint
a conservator for an association if the director, as a result of any
examination or from any report made to the director, reasonably believes
that the public interest will be served by the appointment of a
conservator and if the director finds that the 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 director issued under this
chapter and the order has become final by operation of law or on appeal;
or

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

(2) The conservator may be the director, an examiner or any other
person. Upon the appointment of a conservator, the director shall apply
immediately to the circuit court for the county in which one or more
offices of the association is located for confirmation of the appointment
and proceedings in accordance with this section. The court shall confirm
the appointment if it finds that one or more grounds exist for the
appointment. In conservatorship proceedings the circuit courts have full
power to conserve the assets and business of the association or to
liquidate and dissolve the association.

(3) If the association is an institution insured by a federal
agency, the agency or an appointee of the agency may be tendered
appointment as conservator or co-conservator. If the agency or appointee
accepts the appointment, it may, nevertheless, make loans on the security
of, or purchase at public or private sale, any part or all of the assets
of the association of which it is conservator or co-conservator, if such
loan or purchase is approved by the court.

(4) A conservator shall endeavor promptly to remedy the situations
complained of by the director in the application for confirmation of such
appointment. Within six months after the date of the appointment, or
within a reasonable time thereafter if the court extends the six months’
period:

(a) The conservator shall return the association to the board of
directors thereof and thereafter it shall be managed and operated as if
no conservator had been appointed; or

(b) The conservator shall proceed to liquidate and dissolve the
association.

(5) If the director or an examiner is appointed conservator, the
director or examiner shall receive no additional compensation. However,
if another person is appointed, then the compensation of the conservator,
as determined by the court, shall be paid by the association.

(6) For purposes of this section, “impaired condition” means a
condition in which the assets of a savings association in the aggregate
do not have a fair value equal to the aggregate amount of liabilities of
the association to its creditors plus an amount equal to the minimum
general reserve required under ORS 722.142. Liabilities to creditors
include savings liabilities, capital notes and debentures and liabilities
to all other persons. [1975 c.582 §131; 1985 c.762 §74] (1) A conservator may take immediate
possession and control of the property and affairs of an association and
act to protect the interest of the members, account holders and other
creditors and stockholders. A conservator has all the rights, powers and
privileges of the officers, the board of directors and the members of the
association, including the power to liquidate and dissolve the
association. A conservator has the power and authority provided by this
chapter and such other power and authority as may be expressed in the
order of the court.

(2) The directors and officers shall remain in office and the
employees shall remain in their respective positions, but the conservator
may remove any officer or employee, if the order of removal of an officer
is approved in writing by the Director of the Department of Consumer and
Business Services.

(3) While an association is in the charge of a conservator, the
association shall continue to take payments in accordance with the terms
and conditions of contracts. The conservator, in the discretion of the
conservator, may permit account holders to withdraw their accounts from
the association pursuant to the provisions of this chapter or under and
subject to such rules as the director may prescribe. A conservator may
accept savings accounts and additions to savings accounts, but any such
amounts received by the conservator shall be segregated if the director
so orders in writing. If so ordered, such amounts shall not be subject to
offset and shall not be used to liquidate any indebtedness of the
association existing at the time the conservator was appointed for it or
any subsequent indebtedness incurred for the purposes of liquidating any
such indebtedness. All expenses of the association during a
conservatorship shall be paid by the association. [1975 c.582 §132](1) The Director of the Department of Consumer and
Business Services may, after the director has taken possession of the
property and business of a domestic or foreign savings association under
ORS 722.474 to 722.484, apply to the circuit court of the county in which
the conservatorship proceedings are pending, for an order directing the
director to cause any safe, safety vault or safety deposit box held
anywhere by such association to be thereafter opened and the contents
listed. A safe, vault or box shall be opened in the presence of:

(a) The director or an examiner;

(b) A notary public not an officer of or in the employ of such
association or of the savings and loan office; and

(c) An officer of the association, if available.

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

(3) The contents shall be enclosed in a container distinctly marked
by the notary public and delivered to the director. The container shall
be kept by the director in the custody of the director and control for
use in the administration of the affairs of the savings association, as
provided by law. The contents shall be held subject to the payment of any
rent that may be unpaid for the use of such safe, vault or box, also any
expenses incurred in opening thereof, and also reasonable compensation
for the safekeeping of the contents after their removal from the safe,
vault or box. [Formerly 722.785]A director or officer of an association in office at the time
of the initiation of a proceeding under ORS 722.474 may contest the
proceeding and shall be reimbursed for reasonable expenses and attorney
fees by the association or from its assets. A court having such a
proceeding before it shall allow and order paid reasonable expenses and
attorney fees for such directors and officers. [1975 c.582 §134]A conservator shall not be appointed, or private property
seized under this chapter, when any association is not in an impaired
condition as defined in ORS 722.474 if the alleged wrongdoing can be
otherwise corrected as provided by this chapter or by other law. [1975
c.582 §135; 1985 c.762 §75]FOREIGN ASSOCIATIONSA foreign association shall not transact savings and loan
business in this state unless it receives from the Director of the
Department of Consumer and Business Services a certificate of authority
to do so. [1975 c.582 §136; 1981 c.472 §23]A foreign association may apply to the Director of the Department of
Consumer and Business Services for a certificate of authority to transact
business in this state. With such application it also shall pay the
proper filing fee and file:

(1) A copy of its articles of incorporation and bylaws certified as
a true copy by the public officer or association officer having custody
of the original articles or bylaws;

(2) Evidence satisfactory to the director that its savings accounts
are insured by the Federal Deposit Insurance Corporation or other insurer
as required by ORS 722.048;

(3) A designation of the community in which the principal office
within this state shall be located; and

(4) Other information the director may require. [1975 c.582 §137;
1981 c.472 §24; 1999 c.107 §16] (1) The
Director of the Department of Consumer and Business Services shall issue
a certificate of authority to the association to conduct savings and loan
business in this state when:

(a) A foreign association has complied with ORS 722.504;

(b) The director has examined and investigated according to the
procedures set forth in ORS 722.024 (1) to (4), whether the application
of the association should be granted; and

(c) The director has verified the financial status of the
association by examination of its assets and its records for the purpose
of ascertaining whether they meet the requirements of this chapter.

(2) Notwithstanding subsection (1) of this section, the director
shall not issue the certificate under subsection (1) of this section
unless:

(a) The director is satisfied that the association is in sound
financial condition, and that it is conducting its business, and will
conduct its business in this state in a manner consistent with the laws
of this state;

(b) The director regards the association as safe, reliable and
entitled to public confidence;

(c) The association pays the proper annual fee; and

(d) The director finds that the appropriate standards for approval
of the application set forth in ORS 722.026 are satisfied.

(3) The certificate of authority continues in effect unless revoked
as authorized by ORS 722.516. [Formerly 722.835; 1981 c.472 §25] Any contract made by a foreign
savings association with any person who is residing in or a foreign
corporation authorized to do business in this state, shall be considered
an Oregon contract, and shall be construed according to the laws of this
state. [Formerly 722.845] Except as
otherwise provided by ORS 722.502 to 722.516, a foreign association shall
comply with the provisions of ORS 57.655 to 57.745 (1985 Replacement
Part) governing the admission of foreign corporations to transact
business in this state. [1975 c.582 §140; 1987 c.197 §22](1) Except as provided in subsection (2)
of this section, when the laws, regulations or administrative actions of
any other state or any territory of the United States prohibit or
unfairly impede an Oregon savings association from transacting business
in the state or territory, then the savings associations of the other
state or territory are prohibited from transacting business in this
state, including but not limited to the establishment of new branch
facilities.

(2) Subsection (1) of this section shall not govern the transaction
of a savings and loan business in this state by an association of another
state or territory if ORS 722.072 authorizes the transaction.

(3) Associations or comparable corporation or business entities
headquartered in a foreign country are prohibited from transacting a
savings and loan business in this state. [1975 c.582 §141; 1981 c.472
§26; 1985 c.798 §5] In the manner
specified for issuance of an order under ORS 722.464, the Director of the
Department of Consumer and Business Services may revoke a certificate of
authority of a foreign association if:

(1) The association fails to conduct its business in this state in
a manner consistent with the laws of this state;

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

(3) The association refuses to permit examination of the financial
condition of the association by the director; or

(4) The association fails to pay the proper annual fee. [1975 c.582
§142; 1987 c.215 §5]FEES AND CHARGES (1) The Director of
the Department of Consumer and Business Services shall charge and collect
fees for filing:

(a) An application for a certificate of incorporation, $500 payable
by the incorporators.

(b) An application for approval to establish a branch facility,
$200, or to change the location of the principal office or a branch
facility, $100.

(c) Proposed amendments to bylaws or articles of incorporation for
approval, $50.

(d) An application by a foreign association for a certificate of
authority, $500.

(e) An application for approval of a merger, consolidation,
exchange of shares or sale of assets, $500 payable by the associations
involved.

(f) An application for approval of a dissolution, $500.

(g) An application by a domestic association for approval of a
conversion, $500.

(h) An application by a foreign or federal association or a savings
bank for approval of a conversion, $500.

(2) No part of a fee paid under subsection (1) of this section
shall be refunded if the application is denied or approval is refused.

(3) The director may by rule establish charges to be collected from
associations for examinations conducted under ORS 722.438. [1975 c.582
§143; 1983 c.717 §37] (1) Each savings
association shall pay to the Director of the Department of Consumer and
Business Services each year the fee determined by reference to the
schedule adopted by the director under ORS 705.620. The fee shall be paid
by the date set by the director in the rule establishing the schedule.

(2) In addition to any fee collected under this section, whenever
the director devotes any extra attention to the affairs of a savings
association, either upon determination by the director or upon request of
the savings association, the fee for the extra service shall be the
actual cost thereof. [1985 c.762 §76; 1987 c.171 §5; 1987 c.373 §61]MISCELLANEOUS (1) Savings
associations formed or existing on January 1, 1976, shall not be impaired
by the enactment of the Savings Association Act, by any change in the
requirements for the formation of associations or by any amendment or
repeal of the laws under which they were formed or created. Except as
otherwise expressly provided, the Savings Association Act shall not
affect any liability or penalty incurred under the provisions of such
laws prior to repeal.

(2) All obligations of an existing savings association contracted
prior to January 1, 1976, are enforceable by the association. Any
liability, penalty, demand, claim and right of action against such an
association may be enforced against it as fully and completely as it
might have been enforced prior to January 1, 1976.

(3) Proceedings commenced pursuant to statutes repealed by section
152, chapter 582, Oregon Laws 1975, shall be terminated, completed or
enforced pursuant to the provisions of such statutes which for such
purpose shall remain in full force and effect as to such proceedings.

A reserve fund association formed under the laws of this state and
existing on January 1, 1976, shall be known as a stock association after
January 1, 1976. After January 1, 1976:

(1) All reserve fund stock of such an association shall be known as
capital stock and shall be considered part of the stated capital of such
an association.

(2) All persons owning reserve fund shares of such an association
After January 1, 1976, any
shares, share accounts, passbook accounts, certificates and investment
certificates (except reserve fund stock) that an association subject to
the Savings Association Act has issued and which is outstanding on
January 1, 1976, shall be considered a savings account as defined by ORS
722.004; and the holder thereof shall have all the rights and privileges
appertaining to the holder of a savings account under the Savings
Association Act as well as any valid contractual or other legal rights in
respect thereto preserved by ORS 722.652; except that any such
outstanding share or share account which is not entitled to dividends
shall not by virtue of any provision of the Savings Association Act
become so entitled. [1975 c.582 §147; 1985 c.762 §77]A person may not be held personally liable for an act done or
omitted by the person in good faith and in compliance with a rule or
order of the Director of the Department of Consumer and Business Services
under this chapter regardless of whether the rule or order is later
amended, rescinded or determined to be invalid by judicial or other
authority. [1987 c.445 §2](1) This
section applies to the safe deposit box of any person who is the sole
lessee or last surviving lessee of the box and who has died.

(2) Upon being furnished with a certified copy of the decedent’s
death certificate or other evidence of death satisfactory to the savings
association, the savings association within which the box is located
shall cause or permit the box to be opened and the contents of the box
examined at the request of an individual who furnishes an affidavit
stating:

(a) That the individual believes the box may contain the will of
the decedent, a trust instrument creating a trust of which the decedent
was a trustor or a trustee at the time of the decedent’s death, documents
pertaining to the disposition of the remains of the decedent, documents
pertaining to property of the estate of the decedent or property of the
estate of the decedent; and

(b) That the individual is an interested person as defined in this
section and wishes to open the box to conduct a will search or trust
instrument search, obtain documents relating to the disposition of the
decedent’s remains or inventory the contents of the box.

(3) For the purpose of this section, “interested person” means any
of the following:

(a) A person named as personal representative of the decedent in a
purported will of the decedent;

(b) The surviving spouse or any heir of the decedent;

(c) A person who was serving as the court-appointed guardian or
conservator of the decedent or as trustee for the decedent immediately
prior to the decedent’s death;

(d) A person named as successor trustee in a purported trust
instrument creating a trust of which the decedent was a trustor or a
trustee at the time of the decedent’s death;

(e) A person designated by the decedent in a writing that is
acceptable to the savings association and is filed with it prior to the
decedent’s death;

(f) A person who immediately prior to the death of the decedent had
the right of access to the box as an agent of the decedent under a
durable power of attorney; or

(g) If there are no heirs of the decedent, an estate administrator
of the Department of State Lands appointed under ORS 113.235.

(4) If the box is opened for the purpose of conducting a will
search, the savings association shall remove any document that appears to
be a will, make a true and correct copy of it and deliver the original
will to a person designated in the will to serve as the decedent’s
personal representative, or if no such person is designated or the
savings association cannot, despite reasonable efforts, determine the
whereabouts of such person, the savings association shall retain the will
or deliver it to a court having jurisdiction of the estate of the
decedent. A copy of the will shall be retained in the box. At the request
of the interested person, a copy of the will, together with copies of any
documents pertaining to the disposition of the remains of the decedent,
may be given to the interested person.

(5) If the box is opened for the purpose of conducting a trust
instrument search, the savings association shall remove any document that
appears to be a trust instrument creating a trust of which the decedent
was a trustor or trustee at the time of the decedent’s death, make a true
and correct copy of it and deliver the original trust instrument to a
person designated in the trust instrument to serve as the successor
trustee on the death of the decedent. If no such person is designated or
the savings association cannot, despite reasonable efforts, determine the
whereabouts of such person, the savings association shall retain the
trust instrument. A copy of the trust instrument shall be retained in the
box. At the request of any interested person, a copy of the trust
instrument may be given to the interested person.

(6) If the box is opened for the purpose of obtaining documents
pertaining to the disposition of the decedent’s remains, the savings
association shall comply with subsection (4) of this section with respect
to any will of the decedent found in the box, and may in its discretion
either:

(a) Make and retain in the box a copy of any documents pertaining
to the disposition of the remains of the decedent and tender the original
documents to the interested person; or

(b) Provide a copy of any documents pertaining to the disposition
of the remains of the decedent to the interested person and retain the
original documents in the box.

(7) If the box is opened for the purpose of making an inventory of
its contents, the savings association shall comply with subsection (4) or
(5) of this section with respect to any will or trust instrument of the
decedent that is found in the box, and shall cause the inventory to be
made. The inventory shall be attested to by a representative of the
savings association and may be attested to by the interested person, if
the interested person is present when the inventory is made. The savings
association shall retain the original inventory in the box, and shall
furnish a copy of the inventory to the interested person upon request.

(8) The savings association may presume the truth of any statement
contained in the affidavit required to be furnished under this section,
and when acting in reliance upon such an affidavit, the savings
association is discharged as if it had dealt with the personal
representative of the decedent. The savings association is not
responsible for the adequacy of the description of any property included
in an inventory of the contents of a box, or for the conversion of the
property in connection with actions performed under this section, except
for conversion by intentional acts of the savings association or its
employees, directors, officers or agents. If the savings association is
not satisfied that the requirements of this section have been satisfied,
the savings association may decline to open the box.

(9) If the interested person does not furnish the key needed to
open the box, and the savings association must incur expense in gaining
entry to the box, the savings association may require that the interested
person pay the expense of opening the box.

(10) Any examination of the contents of a box under this section
shall be conducted in the presence of at least one employee of the
savings association. [1999 c.506 §9; 2003 c.395 §23]PENALTIES (1) The Director of the Department of
Consumer and Business Services may assess an association or any officer,
director, agent or employee of an association who violates any provision
of this chapter, or any rule or final order issued pursuant thereto, a
civil penalty of not more than $2,000 for each violation or $10,000 in
the aggregate for all violations within any three-month period. In the
case of an individual agent or employee, the civil penalty shall be not
more than $1,000 for each violation or $5,000 in the aggregate for all
violations within any three-month period. Each day a violation continues
shall be considered a separate violation.

(2) In addition to the civil penalty provided by subsection (1) of
this section, an association or officer, director, agent or employee of
an association who violates any provision of this chapter, or any rule or
final order issued pursuant thereto, may be assessed a civil penalty in
an amount determined by the director but not to exceed the amount by
which the person profited as a result of such violation.

(3) Civil penalties under this section shall be imposed as provided
in ORS 183.745.

(4) All moneys collected under this section shall be paid to the
State Treasurer and credited to the Consumer and Business Services Fund
created by ORS 705.145.

(5) If a civil penalty is assessed against a director, officer,
agent or employee of a savings association, unless the director provides
otherwise, the director, officer, agent or employee shall forfeit the
penalty and the penalty shall not be paid either directly or indirectly
by the savings association. [Formerly 722.466]

_______________

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