Section 1151.344. Loans to and investments in capital stock, obligations, and other securities of service corporations

A savings and loan association may invest a total of fifteen per cent of the association's assets in the capital stock, obligations, and other securities of service corporations organized under the laws of this state to provide services to domestic or foreign associations, as defined in section 1151.01 of the Revised Code, the capital stock of which is available for purchase only by savings and loan associations.

(A) If no association holds more than fifty per cent of the capital stock of such corporation, the corporation may provide services compatible with the purposes, powers, and duties of savings and loan associations. Such service corporation may also provide mechanical, clerical, and record keeping services for other corporations, other persons, or governmental units subject to the written approval of the superintendent of building and loan associations.

Notwithstanding the investment limitation of this division, an association may make any loan authorized by any other section of Chapter 1151. of the Revised Code to such a service corporation or to a joint venture of the service corporation in which an association has an investment of not more than ten per cent of the service corporation's capital stock. The aggregate of all such loans shall not exceed fifty per cent of the association's net worth.

(B) If one association stockholder holds more than fifty per cent of the corporation's capital stock, such service corporation may provide only such services as the superintendent of building and loan associations authorizes by rules promulgated in accordance with Chapter 119. of the Revised Code.

Notwithstanding the investment limitation of this division, an association may make any loan authorized by any other section of Chapter 1151. of the Revised Code to a service corporation or to a joint venture of the service corporation in which an association has made an investment pursuant to this division. The aggregate of all such loans shall not exceed twenty per cent of the association's net worth.

In the adoption of rules authorized by this division, the superintendent may authorize services which he determines to be so related to the business of building and loan associations as to be a proper incident thereto. In determining whether a particular service is a proper incident to a building and loan association the superintendent shall consider whether its performance by a service corporation can reasonably be expected to produce benefits to the public, such as greater convenience, increased competition, or gains in efficiency, that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound building and loan association practices.

The superintendent may at any time examine the affairs of any service corporation in which an association organized under the laws of this state owns stock. Whenever a service corporation or a building and loan association fails to meet the requirements and limitations set forth in this division, all loans or investments by a building and loan association to or in such service corporation constitute unauthorized investments.

Notwithstanding the investment limitation of this section, an association that meets the requirements of section 1151.33 of the Revised Code may make any loan authorized by any other section of Chapter 1151. of the Revised Code to a service corporation or to a joint venture of the service corporation, provided that the association has no investment in such service corporation and that no association owns more than ten per cent of the service corporation's capital stock.

For purposes of this section, "service corporation" includes any subsidiary of a service corporation.

Effective Date: 09-03-1984