Chapter 708A — Chapter 708A

ORS 708A.005 Powers of institutions; insurance transactions; rules. (1) Except as otherwise limited in the Bank Act or the articles of incorporation of an institution, an institution shall have

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ORS 708A.010 Investments and activities of Oregon commercial banks. (1) Notwithstanding any provision of the Bank Act to the contrary, Oregon commercial banks may

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ORS 708A.115 Investment in government obligations. (1) Institutions may invest, without regard to any limitation based on tier 1 capital, in

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ORS 708A.120 Investment in stock of other entity; rules. (1) An institution may not invest any of the institution’s assets in the capital stock of any other corporation or in a membership interest in any limited liability company, except

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ORS 708A.125 Stock in corporations acquired to strengthen capital or eliminate undesirable assets. (1) An institution may carry fully paid and nonassessable capital stock of or membership interest in any other corporation or limited liability company as an asset, if

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ORS 708A.130 Definition for ORS 708A.135 to 708A.145. As used in ORS 708A.135 to 708A.145, unless the context requires otherwise, “invest” includes any advance of funds to a bank service corporation, whether by the purchase of stock, the making of a loan or otherwise, but does not include a payment for rent earned, goods sold and delivered or services rendered prior to the making of the payment. [1997 c.631 §121]

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ORS 708A.135 Investment in bank service corporation. An Oregon commercial bank may invest not more than 10 percent of its capital in a bank service corporation. An Oregon commercial bank shall not invest more than five percent of its total assets in a bank service corporation. [1997 c.631 §122]

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ORS 708A.140 Discrimination by bank service corporation prohibited against nonstockholding depository institution; permitted conduct. A bank service corporation shall not unreasonably discriminate in the provision of any services authorized under ORS 708A.130 to 708A.145 against any financial institution that does not own stock in the bank service corporation on the basis of the fact that the nonstockholding financial institution is in competition with a financial institution that owns stock in the bank service corporation, except that

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ORS 708A.145 Authorized services of bank service corporations; sale of insurance; regulation of services. (1) A bank service corporation may perform any of the following services for financial institutions

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ORS 708A.150 Community development corporations; authority to invest or organize; conditions; corporate form; functions. (1) As provided in this section

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ORS 708A.155 Investment in foreign banks. (1) If the Director of the Department of Consumer and Business Services approves, and subject to rules the director adopts in accordance with ORS 183.310, 183.315, 183.330, 183.335 and 183.341 to 183.410, an institution may invest not more than 10 percent, in the aggregate, of the stockholders’ equity in the institution in the stock of banks or corporations that are chartered or incorporated under the laws of the United States or another state. The banks or corporations in which the institution may invest under this section must be principally engaged in international or foreign banking, or banking in a dependency or insular possession of the United States, either directly or through the agency, ownership or control of local institutions in foreign countries, or in such dependencies or insular possessions, including the stock of one or more banks or corporations chartered or incorporated under section 25(a) of the Federal Reserve Act, as approved December 24, 1919

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ORS 708A.160 Corporation or limited liability company created to establish ATMs; banking institution as stockholder. A banking institution may, subject to the approval of the Director of the Department of Consumer and Business Services, acquire and continue to hold a membership in or the fully paid stock of a limited liability company or corporation that is created to establish and operate ATM facilities. [1997 c.631 §127; 2015 c.244 §38]

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ORS 708A.165 Membership in Federal Reserve System; member bank, officers, directors and shareholders subject to duties and liabilities imposed by laws of this state. (1) An Oregon commercial bank may subscribe to the capital stock and become a member of a Federal Reserve Bank

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ORS 708A.170 Securities powers. An institution may, with the approval of the Director of the Department of Consumer and Business Services, purchase, sell, issue, underwrite and deal in securities to the same extent national banks may do so. [1997 c.631 §129]

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ORS 708A.175 Right to purchase, hold and dispose of real and personal property. An institution may purchase, hold, convey, sell or lease

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ORS 708A.180 Acquisition of personal property for leasing purposes. An Oregon commercial bank may acquire and lease personal property at the request of a lessee that wishes to lease the personal property upon terms that require paying rents. Rents may include residual values, the payment of which a responsible third party guarantees. [1997 c.631 §132; 2015 c.244 §40]

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ORS 708A.185 Purchase of real estate contracts. Institutions may purchase the vendor’s interest in bona fide contracts covering the sale of real estate that comply with the requirements of ORS 708A.270. [1997 c.631 §133]

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ORS 708A.190 Acceptance of drafts and bills of exchange; issuance of letters of credit; obligation for participation share in bills; rules. (1) An Oregon commercial bank may accept drafts or bills of exchange drawn upon it having not more than six months’ sight to run, exclusive of days of grace, that grow out of transactions involving the importation or exportation of goods, or that grow out of the domestic shipment of goods, or that are secured at the time of acceptance by a warehouse receipt or other such document conveying or securing title covering readily marketable staples

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ORS 708A.195 Disposition of real and personal property. (1) An institution shall promptly dispose of real and personal property that the institution may not own or hold under the Bank Act

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ORS 708A.200 [1997 c.631 §136; 2001 c.191 §53; 2001 c.377 §48; repealed by 2003 c.363 §16]

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ORS 708A.210 Challenge to validity of institution action; prohibition; exceptions. (1) Except as provided in subsection (2) of this section, the validity of an institution’s action may not be challenged on the grounds that the institution lacks or lacked power to act

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ORS 708A.250 Lending money. Except as specifically limited by the Bank Act and other applicable law, Oregon commercial banks have the general power to loan money upon terms and conditions that are consistent with safe and sound banking practices. [1997 c.631 §138; 2015 c.244 §42]

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ORS 708A.255 Interest rates on loans or uses of money; late charges. (1) Except as otherwise provided in this section, the rate of interest or the amount of other charges that a financial institution may contract for and receive for a loan or use of money is not subject to limitation

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ORS 708A.260 Accepting own stock as collateral. An Oregon commercial bank may not accept the Oregon commercial bank’s own capital stock as collateral unless taking the Oregon commercial bank’s own stock as collateral is necessary to prevent loss upon an indebtedness previously contracted in good faith. If the indebtedness is not paid in full within six months after the date on which the Oregon commercial bank took the stock as collateral, the Oregon commercial bank shall sell the stock promptly. [1997 c.631 §140; 2015 c.244 §44]

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ORS 708A.265 Accepting stock of other institutions as collateral. An Oregon commercial bank may not accept or hold as loan collateral in the aggregate more than 25 percent of the capital stock of any other insured stock institution. [1997 c.631 §141; 2015 c.244 §45]

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ORS 708A.270 Real estate loans. (1) With respect to any loans secured primarily by real estate, an Oregon commercial bank shall maintain a file containing such appraisal, evidence of merchantable title and insurance as may be required by the Director of the Department of Consumer and Business Services

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ORS 708A.275 Establishment of loan production office; notice; fee. (1) An Oregon bank shall file a notice with the Director of the Department of Consumer and Business Services within 30 days after establishing a loan production office in this state or in another state. The notice must include

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ORS 708A.290 “Capital” defined for ORS 708A.290 to 708A.375. As used in ORS 708A.290 to 708A.375, the term “capital,” when referring to an Oregon commercial bank, means tier 1 and tier 2 capital, as applicable and as reported in the bank’s Consolidated Report of Condition and Income (Call Report) filed under 12 U.S.C. 1817(a)(3), as of the quarter-end preceding the quarter in which a loan or other obligation is approved, plus the balance of the Allowance for Loan and Lease Losses or Adjusted Allowance for Credit Losses as of the same quarter-end not included in tier 2 capital. [1997 c.631 §143; 2021 c.197 §2]

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ORS 708A.295 Limitations on amount of obligations to Oregon commercial bank; applicability. Except as provided in ORS 708A.300 to 708A.375, the loans and other obligations of a person to an Oregon commercial bank outstanding at any time shall not exceed 15 percent of the Oregon commercial bank’s capital. Any loan made or other obligation acquired in accordance with ORS 708A.300 to 708A.375 shall be in addition to and shall not be applied against the 15 percent limitation. Any loan made or obligation acquired that complies with ORS 708A.290 to 708A.375 when made or acquired shall not be considered out of compliance on account of a subsequent decline in the capital of the Oregon commercial bank. Obligations in the name of one person for the benefit of another person shall be considered obligations of both the named person and the benefited person. [1997 c.631 §144]

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ORS 708A.300 Obligations secured by readily marketable collateral. In addition to obligations permitted under ORS 708A.295, an Oregon commercial bank may make loans to or acquire other obligations of a person, not to exceed 10 percent of its capital, if

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ORS 708A.305 Obligations of other financial institutions. In addition to obligations permitted under ORS 708A.295, an Oregon commercial bank may acquire obligations of other financial institutions without regard to amount in the form of time or demand deposits that it places with such other financial institutions. [1997 c.631 §146]

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ORS 708A.310 Obligations of indorser of discounted commercial paper. (1) In addition to obligations permitted under ORS 708A.295, an Oregon commercial bank may acquire obligations of a person without regard to amount as an indorser, arising out of the discount of commercial or business paper owned by the person negotiating the paper

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ORS 708A.315 Noncommercial short-term notes. In addition to obligations permitted under ORS 708A.295, an Oregon commercial bank may acquire obligations of a person, not to exceed 15 percent of the bank’s capital, as an indorser or guarantor of notes, other than commercial or business paper excepted under ORS 708A.310, having a maturity of not more than six months, and owned by the person indorsing and negotiating the same. [1997 c.631 §148]

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ORS 708A.320 Obligations secured by shipping documents. In addition to obligations permitted under ORS 708A.295, an Oregon commercial bank may make loans to or acquire other obligations of a person without regard to amount, provided the obligations are fully secured by shipping documents conveying or securing title to goods or commodities in process of shipment. [1997 c.631 §149]

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ORS 708A.325 Installment consumer paper. (1) In addition to obligations permitted under ORS 708A.295, an Oregon commercial bank may acquire obligations of a person, not to exceed 25 percent of the Oregon commercial bank’s capital, as an indorser or guarantor of negotiable or nonnegotiable installment consumer paper that carries a full or partial recourse indorsement or unconditional guarantee by the person transferring the obligation and conforms to rules prescribed by the Director of the Department of Consumer and Business Services

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ORS 708A.330 Bankers’ acceptances of other financial institutions. In addition to obligations permitted under ORS 708A.295, an Oregon commercial bank may acquire obligations of a person without regard to amount in the form of bankers’ acceptances of other financial institutions of the kind described in section 13 of the Federal Reserve Act. [1997 c.631 §151]

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ORS 708A.335 Obligations secured by documents covering readily marketable staples. (1) In addition to obligations permitted under ORS 708A.295, an Oregon commercial bank may make loans and acquire other obligations of a person secured by documents of title covering readily marketable staples, provided the obligation does not exceed

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ORS 708A.340 Obligations secured by documents covering livestock. In addition to obligations permitted under ORS 708A.295, an Oregon commercial bank may make loans to and acquire other obligations of a person, not to exceed 15 percent of the Oregon commercial bank’s capital, secured by documents of title covering livestock if the principal amount of the obligation is not more than 80 percent of the market value of the livestock. Turkeys are considered livestock within the meaning of this section. [1997 c.631 §153]

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ORS 708A.345 Obligations secured by government obligations or shares of mutual fund or unit trust. In addition to obligations permitted under ORS 708A.295, an Oregon commercial bank may make loans to and acquire other obligations of any person if the obligation is secured by one or more of the following types of security and the principal amount of the obligation is not more than 90 percent of the market value of the security

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ORS 708A.350 Obligations secured by government bonds. In addition to obligations permitted under ORS 708A.295, an Oregon commercial bank may make loans to and accept other obligations of a person, not to exceed 20 percent of the Oregon commercial bank’s capital, if

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ORS 708A.355 Insured and guaranteed obligations. In addition to obligations permitted under ORS 708A.295, an Oregon commercial bank may make loans to and acquire other obligations of a person without regard to amount to the extent the obligations are insured, guaranteed or covered by commitments or agreements to take over or purchase made by a private mortgage insurance company, the State of Oregon, any Federal Reserve Bank, the United States or any department, bureau, board, commission or agency of the United States, including any corporation wholly owned, directly or indirectly, by the United States. [1997 c.631 §156]

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ORS 708A.360 Obligations secured by deposits. (1) In addition to obligations permitted under ORS 708A.295, an Oregon commercial bank may make loans to and acquire other obligations of a person without regard to amount to the extent the obligations are fully secured by any kind of deposit held by the Oregon commercial bank, including but not limited to deposits held in an automatic savings to checking transfer account or a negotiable order of withdrawal account

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ORS 708A.365 Obligations secured by life insurance policy values. In addition to obligations permitted under ORS 708A.295, an Oregon commercial bank may make loans to and acquire obligations of a person not to exceed 10 percent of the Oregon commercial bank’s capital that are secured by a life insurance policy having a cash surrender value of not less than 100 percent of the amount of the obligations, plus an amount equal to one annual premium on the insurance policy. [1997 c.631 §158]

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ORS 708A.370 Obligations secured by first lien on real estate. In addition to obligations permitted by ORS 708A.295, an Oregon commercial bank may make loans to and acquire other obligations of a person not to exceed 10 percent of the Oregon commercial bank’s capital that are secured by a first lien on real estate if the obligation does not exceed 80 percent of the fair market value of the real estate as determined by an independent appraisal. Obligations secured by a first lien on real estate that are subject to ORS 708A.295 may become exempt from ORS 708A.295 if

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ORS 708A.375 Obligations of guarantors. In addition to obligations permitted by ORS 708A.295, an Oregon commercial bank may acquire obligations of a person, in the form of a guaranty or otherwise, without regard to amount, on account of obligations previously contracted in good faith or to reduce the risk of loss. Any such obligations shall, however, be subject to ORS 708A.295 in determining whether the Oregon commercial bank may make additional loans to or acquire other obligations of the person. [1997 c.631 §160]

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ORS 708A.400 Deposit accounts. Oregon commercial banks may, consistent with applicable law and safe and sound banking practices, offer deposit accounts upon such terms and conditions as they consider appropriate. [1997 c.631 §161]

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ORS 708A.405 Deposits; FDIC insurance required. Oregon commercial banks shall secure insurance for their deposits from the Federal Deposit Insurance Corporation or a similar organization organized under the laws of the United States. [1997 c.631 §162]

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ORS 708A.410 Savings accounts; conditions for withdrawal; interest rate; inadvertent overdraft. (1) Within the limits established under applicable federal statutes and regulations, an Oregon commercial bank that receives savings accounts shall prescribe by the Oregon commercial bank’s bylaws or by contract with the Oregon commercial bank’s depositors, the time and conditions on which the Oregon commercial bank repays depositors or makes a repayment to the depositors’ order

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ORS 708A.415 Securing deposits by surety bond, letter of credit or insurance. (1) An Oregon commercial bank may secure any of the funds deposited with the Oregon commercial bank by giving a surety bond, an irrevocable letter of credit issued by an insured institution, as defined in ORS 706.008, or a policy of insurance under which some person other than the Oregon commercial bank becomes liable for deposits, provided that the aggregate face amount of the bonds, letters of credit and policies of insurance does not exceed 20 percent of the capital of the Oregon commercial bank

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ORS 708A.420 Notice to depositor upon change in terms, charges, withdrawal conditions or decrease in interest rate; exception. (1) If an Oregon commercial bank changes the terms, service charges or conditions for withdrawal of any deposit account, the Oregon commercial bank shall notify the depositor in writing before the change is effective. If an Oregon commercial bank decreases the interest rate on any deposit account, other than an account that by its terms provides for a floating, variable or indexed rate of interest, the Oregon commercial bank shall notify the depositor in writing before the change is effective. With respect to deposit accounts for which the terms provide for a floating, variable or indexed rate of interest, the Oregon commercial bank need not give notice to the depositor concerning changes in the interest rate other than by means of account statements the Oregon commercial bank provides to the depositor in the ordinary course, not less than once each calendar quarter. For accounts that two or more depositors hold, the Oregon commercial bank may give or send the notice to any of the depositors. An Oregon commercial bank may notify a depositor under this section

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