citation: FIN § 6150

text:
(a) The business of each association shall be directed by a board of directors elected by ballot by a plurality of the votes of the members or stockholders present or voting by proxy.

(b) Each director and officer of an association has a legal responsibility and fiduciary duty to administer the affairs of and provide sound management to the association.

(c) In the case of an association which converts from a mutual association to a stock association, for a period of up to five years from the date of conversion, cumulative voting shall not be required in the election of directors unless otherwise provided in the association’s articles of incorporation.

history: (History: Amended by Stats. 1986, Ch. 1158, Sec. 2. Effective September 26, 1986.)

article: 4. Directors

path: 2. SAVINGS ASSOCIATION LAW > 3. Corporate Administration > 4. Directors


kind: section

code: FIN

citation: FIN § 6151

text: No person shall be eligible for election or shall serve as a director or officer of an association who has been convicted of a criminal offense involving dishonesty or a breach of trust.

history: (History: Added by Stats. 1983, Ch. 1091, Sec. 2.)

division: 2. SAVINGS ASSOCIATION LAW

chapter: 3. Corporate Administration

article: 4. Directors


citation: FIN § 6152

text:
(a) A director shall automatically cease to be a director upon becoming the subject of an order for relief in bankruptcy or upon conviction of a criminal offense involving dishonesty or a breach of trust.

(b) In the case of an association which converts from a mutual association to a stock association, for a period of up to five years from the date of the conversion, a director may not otherwise be removed except for cause on the affirmative vote of a majority of the votes of members or stockholders eligible to be cast at a legal meeting.

history: (History: Amended by Stats. 2009, Ch. 500, Sec. 36. (AB 1059) Effective January 1, 2010.)

article: 4. Directors


citation: FIN § 6153

text: Directors shall be elected for periods of three years and until their successors are elected and qualified, but provision shall be made for the election of approximately one-third of the board of directors each year.

article: 4. Directors


citation: FIN § 6154

text: If the members or stockholders fail to elect a director to fill each vacancy created by an increase in the number of directors, the current directors may fill the vacancy by electing a director to serve until the next annual meeting of the members or stockholders at which time a director shall be elected to fill the vacancy for the unexpired term for the class of directors in which the vacancy exists.

article: 4. Directors


citation: FIN § 6155

text: Whenever the number of directors is changed and vacancies caused by the change are filled, the directors so elected shall be elected to terms in accordance with the provisions of Section 6153.

article: 4. Directors


citation: FIN § 6156

text:
(a) Any vacancy among directors, not filled by the members or stockholders, may be filled by a majority vote of the remaining directors, though less than a quorum, by electing a director to serve until the next annual meeting of the members or stockholders, at which time a director shall be elected to fill the vacancy for the unexpired term for the class of director in which the vacancy exists.

(b) In the event of a vacancy on the board of directors from any cause, the remaining directors shall have full power and authority to continue direction of the association until the vacancy is filled.

article: 4. Directors


citation: FIN § 6157

text: Every savings association subject to the new director or senior executive officer notice requirements of Section 32 of the Federal Deposit Insurance Act (12 U.S.C. Sec. 1831i) based upon recent chartering or change of control or failure to maintain the minimum required capital or otherwise troubled condition shall provide the commissioner, at the same time the notice is submitted to the appropriate federal agency, with a copy of the notification submitted in compliance with that requirement.

history: (History: Added by Stats. 1990, Ch. 1118, Sec. 29.)

article: 4. Directors


citation: FIN § 6200

text: Except as provided in subdivision (b) of Section 6203, all directors, officers, and employees of an association shall, before entering upon the performance of any of their duties, execute their individual bonds with adequate corporate surety payable to the association as an indemnity for any loss the association may sustain of money or other property by or through any fraud, dishonesty, forgery or alteration, larceny, theft, embezzlement, robbery, burglary, hold-up, wrongful or unlawful abstraction, misapplication, misplacement, destruction or misappropriation, or any other dishonest or criminal act or omission by the director, officer, or employee.

article: 5. Indemnity Bonds

path: 2. SAVINGS ASSOCIATION LAW > 3. Corporate Administration > 5. Indemnity Bonds


citation: FIN § 6201

text: Associations that employ collection agents, who for any reason are not covered by a bond required under Section 6200, shall provide for the bonding of each of those agents in an amount equal to at least twice the average monthly collection of the agent. The agents shall be required to make settlement with the association at least monthly.

article: 5. Indemnity Bonds


citation: FIN § 6202

text: No indemnity bond coverage is required of any agent that is a financial institution insured by the Federal Deposit Insurance Corporation.

history: (History: Amended by Stats. 1990, Ch. 1118, Sec. 30.)

article: 5. Indemnity Bonds


citation: FIN § 6203

text:
(a) The amounts and form of indemnity bonds and sufficiency of the surety shall be approved by the board of directors and by the commissioner.

(b) In lieu of individual bonds, a blanket bond, protecting the association from loss through any act or acts of any director, officer, employee or agent, may be obtained.

(c) A true copy of every indemnity bond shall be on file at all times at the association’s home office.

article: 5. Indemnity Bonds


citation: FIN § 6204

text: Indemnity bonds shall provide that their cancellation either by the surety or by the insured shall not become effective unless and until 10 days’ notice in writing first shall have been given to the commissioner, unless the cancellation is approved earlier by the commissioner.

article: 5. Indemnity Bonds


citation: FIN § 6450

text: Each association shall keep correct and complete books and records of accounts, as specified in Section 1500 of the Corporations Code.

history: (History: Repealed and added by Stats. 1983, Ch. 1091, Sec. 2.)

article: 6. Records

path: 2. SAVINGS ASSOCIATION LAW > 3. Corporate Administration > 6. Records


citation: FIN § 6451

text:
(a) Except as provided in subdivision (b), each agency of an association, as defined in Section 6551, shall keep an original record of each transaction of business completed on behalf of the association at the agency.

(b) Records of transactions are not required to be maintained at the agency if they are maintained at the association’s home office or branch office.

history: (History: Amended by Stats. 1989, Ch. 868, Sec. 4. Effective September 26, 1989.)

article: 6. Records


citation: FIN § 6452

text: Each association shall observe generally accepted accounting principles and practices except to the extent that the commissioner may require or permit different accounting treatment of accounts by regulation.

article: 6. Records


citation: FIN § 6453

text: Each association shall close its books at the close of business at least annually, or more often if authorized or required in writing by the commissioner.

history: (History: Amended by Stats. 1986, Ch. 361, Sec. 8.)

article: 6. Records


citation: FIN § 6454

text: No association by any system of accounting or any device of bookkeeping shall, either directly or indirectly, enter any of its assets upon its books in the name of any other person, partnership, association, or corporation or under any title or designation that is not truly descriptive of the assets.

article: 6. Records


citation: FIN § 6455

text:
(a) Each association shall maintain complete loan and investment records, and shall do so in a manner satisfactory to the commissioner. Detailed records necessary to make determinations of compliance by an association with the requirements of Chapter 6 (commencing with Section 7200) and other provisions of this division shall be maintained at all times.

(b) The record of each real estate loan or other secured loan or investment shall contain documentation satisfactory to the commissioner of the type, adequacy and characteristics of the security.

article: 6. Records


citation: FIN § 6456

text: Each mutual association shall maintain membership records which shall show the name and address of the member and the date of membership.

history: (History: Amended by Stats. 1985, Ch. 983, Sec. 4. Effective September 26, 1985.)

article: 6. Records


citation: FIN § 6457

text: Each capital stock association shall maintain a register of stockholders.

article: 6. Records


citation: FIN § 6458

text:
(a) Any association may cause any or all records of 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 record on a film or other durable material.

(b) Any copy or reproduction made under subdivision (a) shall be deemed to be 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.

(c) A facsimile, exemplification, or certified copy of any copy made pursuant to subdivision (a), or a reproduction produced from a film record, shall, for all purposes, be deemed a facsimile, exemplification, or certified copy of the original record.

history: (History: Added by renumbering Section 6460 by Stats. 1984, Ch. 287, Sec. 15. Effective July 6, 1984.)

article: 6. Records


citation: FIN § 6475

text:
(a) Each association shall maintain an adequate statutory net worth appropriate for the conduct of its business and the protection of its savings account holders.

(b) The commissioner shall fix a minimum statutory net worth requirement applicable to all associations, which shall not be less than 3 percent of an association’s total assets. In defining total assets, the commissioner may issue regulations to exclude from the total asset figure any asset items deemed appropriate by the commissioner.

(c) If the statutory net worth falls below the level specified by the commissioner, the commissioner may require the association to increase its statutory net worth within the time and in a manner designated by the commissioner, so as to bring the amount to the level determined adequate under this section, and may require the association to do any one or more of the following:

(1) Increase its liquid assets and maintain that increased liquidity at the level specified by the commissioner.

(2) Cease to:

(A) Accept savings accounts of all classes or categories, except in exchange for accounts already outstanding.

(B) Accept savings accounts of any particular class, category, or amount.

(C) Receive additional funds upon savings accounts already outstanding other than installment accounts.

The provisions of paragraph (2) of subdivision (c) shall not prevent an association from crediting to savings accounts the interest earned on the accounts.

(3) Cease all lending, lending in a particular area, or making a particular type or category of loans.

(4) Cease purchase of loans or other investments.

(5) Cease or limit promotional expenditures.

(6) Convene a meeting or meetings of its board of directors with the commissioner in attendance to accomplish the objectives of this section.

(7) Take any other steps that the commissioner deems necessary to safeguard the interests of the association and the public.

history: (History: Amended by Stats. 1988, Ch. 718, Sec. 11.)

path: 2. SAVINGS ASSOCIATION LAW > 3. Corporate Administration > 7. Statutory Net Worth; Reserve Accounts


citation: FIN § 6476

text:
Each association shall set up and maintain the reserves required by, and may set up and maintain any additional reserves that are permitted by, this division.

The board of directors may make additional transfers to surplus or other reserve accounts.

article: 7. Statutory Net Worth; Reserve Accounts


citation: FIN § 6477

text: Any association which, for the purpose of evading provisions of this division or any order of the commissioner, knowingly participates, directly or indirectly, in an exchange with another association of any loan, investment, or other asset held by either association in violation of any provision of this division or any order of the commissioner, shall, upon direction of the commissioner, set up and maintain a reserve in the full amount of the asset acquired and shall not include that reserve in its statutory net worth.

history: (History: Added by Stats. 1986, Ch. 1158, Sec. 3. Effective September 26, 1986.)


citation: FIN § 6500

text:
(a) Each association incorporated pursuant to or operating under the provisions of this division shall have all the powers enumerated, authorized, and permitted by this division and other rights, privileges, and powers, and may engage in any activities singly or with others, that are incidental to or reasonably necessary or appropriate for the accomplishment of the objects and purposes of the association, as provided by this division. Among others, and except as otherwise limited by the provisions of this division, each association shall have the powers set out in this chapter. Associations shall be subject to the provisions of the General Corporation Law (Division 1 (commencing with Section 100) Title 1 of the Corporations Code) and shall also have all the powers and privileges provided in the General Corporation Law of this state to other corporations except those powers and privileges that are expressly denied to associations in this division. If any provision of the General Corporation Law is inconsistent with any provision of this division, the provisions of this division shall prevail.

(b) All references in this division to the General Corporation Law mean the General Corporation Law effective January 1, 1977, and any subsequent amendments thereto.

(c) In the application of Chapter 23 (commencing with Section 2300) of the Corporations Code to associations, the definition of effective date in Section 2300 is January 1, 1978.

history: (History: Amended by Stats. 1984, Ch. 287, Sec. 16. Effective July 6, 1984.)

chapter: 4. Powers of Associations

article: 1. General Powers

path: 2. SAVINGS ASSOCIATION LAW > 4. Powers of Associations > 1. General Powers


citation: FIN § 6501

text: An association may have perpetual existence, adopt and use a corporate seal which may be affixed by imprint, facsimile, or otherwise, and adopt and amend bylaws as provided in this division.

article: 1. General Powers


citation: FIN § 6502

text: An association may sue, be sued, complain, and defend in any court.

article: 1. General Powers


text: An association may, acquire, hold, sell, develop, subdivide, dispose of, and convey real and personal property consistent with its objects and powers. It may mortgage, pledge, or lease any real or personal property and may take the property by gift, devise, or bequest.

history: (History: Added by Stats. 1990, Ch. 1118, Sec. 31.)

article: 1. General Powers


citation: FIN § 6503

text:
(a) No association or subsidiary thereof, without the prior written consent of the commissioner, shall enter into either of the following:

(1) Any transaction or modification of any transaction with an affiliated person to buy, lease, or sell real or personal property, or take that property by gift.

(2) Any consulting contracts or contracts for services with an affiliated person.

(b) As a condition to approving a transaction specified in subdivision (a), the commissioner shall make both of the following findings:

(1) The terms of the transaction are fair to, and in the best interests of, the savings association or subsidiary. In the case of real or personal property transactions, this finding shall be supported by an appraisal not prepared by an affiliated person or employee of the association or subsidiary.

(2) The transaction was approved in advance by a resolution duly adopted with full disclosure by at least a majority, with no director having an interest in the transaction voting, of the entire board of directors of the association or subsidiary, or alternatively, by a majority of the total votes eligible to be cast by the voting members or stockholders of the association at a meeting called for that purpose, with no votes cast by proxies not solicited for that purpose. For purposes of this subdivision, “full disclosure” shall include, but not be limited to, (A) the affiliated person’s source of financing for any real property involved in the transaction and (B) whether the association or any subsidiary thereof has a deposit relationship with any financial institution or holding company or affiliate thereof providing the financing.

history: (History: Amended by Stats. 2006, Ch. 538, Sec. 165. Effective January 1, 2007.)

article: 1. General Powers


citation: FIN § 6504

text:
(a) Except by the prior written consent of the commissioner, an association in organization that is not a member of a federal home loan bank may borrow money from any source not more than an aggregate amount equal to 25 percent of its assets on the date of borrowing, and may pledge and otherwise encumber any of its assets to secure its debts.

(b) An association that is a member of a federal home loan bank may borrow money from any source without limitation and may pledge and otherwise encumber any of its assets to secure its debts or savings accounts.

history: (History: Amended by Stats. 1985, Ch. 983, Sec. 5. Effective September 26, 1985.)

article: 1. General Powers


citation: FIN § 6505

text:
(a) An association may issue and sell, directly or through underwriters, capital certificates that represent nonwithdrawable capital contributions, and constitute part of the reserves and statutory net worth of the association. The certificates shall have no voting rights and shall be subordinate to all savings accounts, debt obligations, and claims of creditors of the association. The certificates shall constitute a claim in liquidation against any reserves, surplus, and other statutory net worth accounts remaining after the payment in full of all savings accounts, debt obligations, and claims of creditors. The capital certificates shall be entitled to the payment of interest prior to the allocation of any income to surplus or other statutory net worth accounts of the association and may be issued with a fixed rate of interest or with a prior claim to distribution of a specified percentage of any net income remaining after required allocations to reserves, or a combination of those features. Losses may be charged against capital certificates only after reserves, surplus, and other statutory net worth accounts have been exhausted.

(b) To the extent permitted by its articles of incorporation, an association authorized to issue capital stock may provide for the conversion of capital certificates into common stock.

article: 1. General Powers


citation: FIN § 6507

text: An association may qualify as and become a member of a federal home loan bank and a home loan bank established as an agency or instrumentality of this state.

article: 1. General Powers


citation: FIN § 6508

text: An association may become a member of, deal with, maintain reserves or deposits with, or make reasonable payments or contributions to any organization or instrumentality whether government or private, to the extent that the organization or instrumentality assists in furthering or facilitating the association’s purposes, powers, services, or community responsibilities, and it may comply with any reasonable requirements or conditions of eligibility.

article: 1. General Powers


citation: FIN § 6509

text: An association may act as depository for receipt of payments of federal or state taxes and loan funds, and may satisfy any related federal or state statutory or regulatory requirements, including pledging of assets as collateral, payment of interest at prescribed rates, and, notwithstanding any other provision of this division, may issue the accounts subject to the right of immediate withdrawal.

article: 1. General Powers


citation: FIN § 6510

text: An association may sell any loan, including a participating interest in a loan, at any time.

article: 1. General Powers


citation: FIN § 6511

text: Loans secured by real property may be sold to, and are legal investments for, among others, any public or private pension fund, credit union, labor union fund, or public employee association and may be purchased by those institutions directly from an association. Nothing in this subdivision shall be construed as altering any limits imposed by law on the extent of participation in an investment that is made by any entity covered by this subdivision.

article: 1. General Powers


citation: FIN § 6513

text: An association may service loans and investments for others.

article: 1. General Powers


citation: FIN § 6514

text:
(a) An association may act, and receive compensation for so acting, as trustee of any trust created or organized in the United States and forming a part of a stock bonus, pension, or profit-sharing plan that qualifies for specific tax treatment under Section 401 of the Internal Revenue Code of 1986 (26 U.S.C., Sec. 401), as amended.

(b) It may also act, and receive compensation for so acting, as trustee or custodian of an individual retirement account within the meaning of Section 408 of the Internal Revenue Code of 1986, as amended.

(c) Assets of the trust or account must be invested only in savings accounts of the association, in obligations or securities issued by the association, or in other investments that are approved by the commissioner.

(d) All assets held in fiduciary capacity by any association under the authority of this section may be commingled and consolidated for appropriate purposes of investment if records reflecting each separate beneficial interest are maintained by the fiduciary or by another appropriate party who assumes that duty.

(e) The trustee or custodian may accept noncash assets under this section if the assets are converted into cash as soon as practicable.

history: (History: Amended by Stats. 1990, Ch. 1118, Sec. 32.5.)

article: 1. General Powers


citation: FIN § 6515

text:
(a) Notwithstanding any provisions of Division 1 (commencing with Section 99), Section 202 of the Corporations Code, or any other provisions of law relating to trusts and trust authority, subject to regulations of the commissioner, an association may act as trustee, executor, administrator, guardian, or in any other fiduciary capacity in which banks, trust companies, or other corporations are permitted to act under the laws of this state, directly or through a state or nationally chartered subsidiary.

(b) All acts provided in this code to be performed by the commissioner, the State Treasurer, or other public officials for or in respect to the deposit of securities by trust companies for the protection of court and private trusts shall be performed as well for or in respect to the deposit of securities by any association or the trust companies of any association organized or doing business under the laws of this state, or by any federal association authorized to transact a trust business. An association may advertise its authority to engage in and conduct a trust business and to advertise for and solicit a trust business in this state, notwithstanding any other provision of law.

(c) Pursuant to the authority contained in Section 1 of Article XV of the California Constitution, the restrictions upon rates of interest contained in Section 1 of Article XV of the California Constitution shall not apply to any obligations of, loans made by, or forbearances of, an association or federal association, or a service corporation which is authorized to exercise trust powers, when the association, federal association, or service corporation is acting in its fiduciary capacity as trustee.

(d) Subdivision (c) creates and authorizes an exempt class of persons pursuant to Section 1 of Article XV of the Constitution. Notwithstanding any other provision of law, subdivision (c) does not exempt an association, federal association, or a service corporation of such associations, from complying with all other laws and regulations governing the business in which the association, federal association, or service corporation is engaged.

history: (History: Amended by Stats. 1996, Ch. 1064, Sec. 552. Effective January 1, 1997. Operative July 1, 1997.)

article: 1. General Powers


citation: FIN § 6516

text:
(a) Subject to regulations issued by the commissioner, an association may own and use or participate in the use or ownership and use of remote service units.

(b) A remote service unit is not a branch or agency.

article: 1. General Powers


citation: FIN § 6517

text: Subject to Regulation E (12 CFR Part 205) and to rules and regulations of the commissioner, an association may transfer funds between holders of savings accounts, and third parties, or their designees, by means of an electronic funds transfer system. No system or any part of it, including terminals or processing centers, shall of itself be considered a branch office or agency.

article: 1. General Powers


citation: FIN § 6518

text:
(a) An association may maintain and rent safes, boxes, or other receptacles or premises for the safekeeping of personal property upon terms and conditions that may be agreed upon.

(b) An association that rents or otherwise makes safe-deposit boxes available to the public is entitled to all of the remedies set forth in Article 2 (commencing with Section 1660) of Chapter 13 of Division 1, and may dispose of the unclaimed contents of safe-deposit boxes in the manner set forth in that article.

article: 1. General Powers


citation: FIN § 6519

text: An association may sell money orders, travel checks, and similar instruments drawn by it on its bank accounts or as agent for any organization empowered to sell the instruments through agents within this state.

history: (History: Added by Stats. 1983, Ch. 1091, Sec. 2.)

article: 1. General Powers


citation: FIN § 6520

text: An association, service corporation, or a person authorized in writing by an association may act as an agent for others except that an association may not act as an insurer or transact insurance as agent for an insurer. Any savings and loan association holding company or any service corporation that acts as an agent of an insurer shall conform to the requirements of Section 7455 and Section 770.1 of the Insurance Code.

history: (History: Amended by Stats. 1985, Ch. 983, Sec. 6.5. Effective September 26, 1985.)

article: 1. General Powers


citation: FIN § 6521

text:
(a) Notwithstanding the provisions of Division 6 (commencing with Section 17000) or any other provision of law, an association or service corporation may act as an escrow agent in connection with the sale, transfer, encumbering or leasing of real or personal property.

(b) The name for any subdivision of an association operating as an escrow agent pursuant to this section, if different from the name of the association, shall be approved by the commissioner.

history: (History: Amended by Stats. 1985, Ch. 983, Sec. 7. Effective September 26, 1985.)

article: 1. General Powers


citation: FIN § 6522

text:
(a) An association that declares and pays dividends may distribute its own shares or may make payments in cash or property. Payment of cash or property shall be made only if there is a sufficient balance of unappropriated retained earnings which is that portion of income retained in the business since its organization or reorganization and which has not been appropriated or reserved for some specific purpose. Dividends shall not be distributed unless the association meets its required statutory net worth before and after that distribution. No dividends shall be paid if that payment would cause the association to be in an impaired condition.

(b) A stock split, as defined in Section 188 of the Corporations Code, and a reverse stock split, as defined in Section 182 of the Corporations Code, are authorized and shall not be construed to be dividends within the meaning of this section.

(c) Any distribution of permanent capital or paid in surplus shall require prior approval of the commissioner.

(d) Any shareholder who receives any distribution prohibited by this section with knowledge of facts indicating the impropriety thereof is liable to the association for the amount received. The commissioner may bring an action for the benefit of the association to recover the distribution from the shareholder.

history: (History: Amended by Stats. 1987, Ch. 1162, Sec. 11. Effective September 26, 1987.)

article: 1. General Powers


citation: FIN § 6523

text:
(a) An association may use advertising, whether printed, broadcasted by radio, televised, displayed, or communicated in any other manner or make any representation that is accurate and does not misrepresent its services, contracts, investments, or financial condition.

(b) The commissioner may require an association to file a true copy of the text of any advertising in the office of the commissioner at least five days prior to its issuance, circulation, or publication. Advertising filed under this subdivision may be used upon the commissioner’s express approval or failure to disapprove it within five days of its filing.

(c) Associations shall not issue, circulate, or publish any advertising after notice in writing from the commissioner that in the commissioner’s opinion the advertising is inaccurate or misrepresents the association’s services, contracts, investments, or financial condition.

article: 1. General Powers


citation: FIN § 6524

text: An association may organize, sponsor, operate, control, or render investment advice to, an investment company, or underwrite, distribute, or sell securities of any investment company which has qualified to sell its securities in this state pursuant to Part 2 (commencing with Section 25100) of Division 1 of Title 4 of the Corporations Code, if the officers and employees of the association who sell these securities meet such standards with respect to training experience, and sales practices as established by the Savings and Loan Commissioner. For the purpose of this section, “investment company” means an investment company as defined in the Investment Company Act of 1940 (15 U.S.C., Sec. 80a-1 et seq.).

article: 1. General Powers


citation: FIN § 6525

text:
(a) Notwithstanding the provisions of Sections 1051, 1052, and 1054 of the Labor Code and Section 2947 of the Penal Code, an association, a subsidiary or affiliate of an association, or any officer or employee thereof may deliver fingerprints taken of a director, an officer, an employee, or an applicant for employment to local, state, or federal law enforcement agencies for the purpose of obtaining information as to the existence and nature of a criminal record, if any, of the person fingerprinted relating to convictions, and to any arrest for which that person is released on bail or on his or her own recognizance pending trial, for the commission or attempted commission of a crime involving robbery, burglary, theft, embezzlement, fraud, forgery, bookmaking, receiving stolen property, counterfeiting, or involving checks or credit cards or using computers.

(b) The Department of Justice shall, pursuant to Section 11105 of the Penal Code, and a local agency may pursuant to Section 13300 of the Penal Code, furnish to the officer of the association or subsidiary or affiliate thereof responsible for the final decision regarding employment of the person fingerprinted, or to his or her designees having responsibilities for personnel or security decisions in the usual scope and course of their employment with the association, subsidiary, or affiliate summary criminal history information when requested pursuant to this section. If, upon evaluation of the criminal history information received pursuant to this section, the association, subsidiary, or affiliate determines that employment of the person fingerprinted would constitute an unreasonable risk to the association, subsidiary, or affiliate or its customers, the person fingerprinted may be denied employment.

(c) A request for records pursuant to this section made of the Department of Justice shall be on a form approved by the department. The department may charge a fee to be paid by the requesting association, subsidiary, or affiliate pursuant to subdivision (e) of Section 11105 of the Penal Code. No request shall be submitted without the written consent of the person fingerprinted.

(d) Any criminal history information obtained pursuant to this section is confidential and no recipient shall disclose its contents other than for the purpose for which it was acquired.

(e) “Affiliate,” as used in this section, means any corporation controlling, controlled by, or under common control with, a savings association, whether directly, indirectly, or through one or more intermediaries.

history: (History: Amended by Stats. 1989, Ch. 868, Sec. 6. Effective September 26, 1989.)

article: 1. General Powers


text:
Except with the prior written consent of the commissioner:

(a) No person who has been convicted of any criminal offense involving dishonesty or breach of trust may participate, directly or indirectly, in any manner in the conduct of the affairs of a savings association.

(b) A savings association shall not permit any person who has been convicted of any criminal offense involving dishonesty or breach of trust to participate, directly or indirectly, in any manner in the conduct of the affairs of the savings association.

history: (History: Added by Stats. 1990, Ch. 1118, Sec. 33.)

article: 1. General Powers


citation: FIN § 6526

text:
An association may issue commercial and standby letters of credit in conformance with the Uniform Commercial Code or the Uniform Customs and Practice for Documentary Credits Act and may pledge collateral to secure its obligations thereunder. Except as otherwise provided by regulations of the commissioner, such issuance shall be subject to the following requirements:

(a) Each letter of credit must conspicuously state that it is a letter of credit.

(b) The issuer’s undertaking must contain a specified expiration date or be for a definite term, and must be limited in amount.

(c) The issuer’s obligation to pay must be solely dependent upon the presentation of conforming documents as specified in the letter of credit, and not upon the factual performance or non-performance by the parties to the underlying transaction.

(d) The account party must have an unqualified obligation to reimburse the issuer for payments made under the letter of credit.

To the extent funds are advanced under a letter of credit without compensation from the account party, the amount shall be treated as an extension of credit subject to percentage of assets limits and other requirements under an applicable provision of this division.

article: 1. General Powers


citation: FIN § 6527

text: If a loan or other investment is authorized under more than one section of this division an association may designate under which section the loan or investment has been made. Such a loan or investment may be apportioned among appropriate categories, and may be moved, in whole or in part, from one category to another.

article: 1. General Powers


citation: FIN § 6528

text:
An association may provide correspondent services primarily to other depository institutions to the extent that the activity does not violate other provisions of law.

(a) An association may maintain a noninterest-bearing account at any institution at which accounts are insured by the Federal Deposit Insurance Corporation, if the account is necessary or incidental to a correspondent relationship.

(b) An association may receive non-interest-bearing deposits from correspondent institutions for use as compensating balances, for settlement purposes, or for other purposes incidental to a correspondent relationship. These deposits may be payable on demand and subject to withdrawal by negotiable or transferable instrument, order, or authorization. These deposits shall not give rise to voting rights of membership in a state mutual association.

history: (History: Amended by Stats. 1990, Ch. 1118, Sec. 34.)

article: 1. General Powers


citation: FIN § 6529

text:
(a) No affiliated person of a savings association may receive, either directly or indirectly, from the association, a subsidiary thereof, or any other source any fee or other compensation of any kind in connection with the procurement of a loan from that association or subsidiary.

(b) No savings association shall give and no person shall accept any fee, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or part of a real estate closing service shall be referred to any person by the savings association or by a subsidiary or affiliated person thereof, in connection with any loan on real property made by a savings association or subsidiary thereof.

(c) Other than for services actually performed, no person shall give and no savings association or subsidiary or affiliated person thereof shall accept any portion, split, or percentage of any charge made or received for the rendering of a real estate closing service in connection with a transaction involving a loan on real property made by a savings association or subsidiary thereof.

(d) For purposes of subdivisions (b) and (c), “real estate closing service” includes any service provided in connection with the execution of a real estate escrow transaction, including, but not limited to, title searches, title examinations, the provision of title reports, title insurance, services rendered by an attorney, the preparation of documents, property surveys, the rendering of credit reports or appraisals, pest and fungus inspections, services rendered by a real estate licensee, and the handling of the processing.

history: (History: Added by Stats. 1990, Ch. 1118, Sec. 35.)

article: 1. General Powers


citation: FIN § 6530

text:
(a) No savings association may discharge or otherwise discriminate against any employee with respect to compensation, terms, conditions, or privileges of employment because the employee (or any person acting pursuant to the request of the employee) provided information to the commissioner, the Attorney General, or any district attorney regarding a possible violation of any law or regulation by the savings association or any of its officers, directors, or employees.

(b) Any employee or former employee who believes he or she has been discharged or discriminated against in violation of subdivision (a) may file a civil action in superior court before the close of the 2-year period beginning on the date of that discharge or discrimination. The plaintiff shall also file a copy of the complaint initiating the civil action with the commissioner.

(c) If the court determines that a violation of subdivision (a) has occurred, it may order the association which committed the violation to do any of the following:

(1) Reinstate the employee to his or her former position.

(2) Pay compensatory damages.

(3) Take other appropriate actions to remedy any past discrimination.

(d) The protections of this section shall not apply to any employee who does either of the following:

(1) Deliberately causes or participates in the alleged violation of law or regulation.

(2) Knowingly or recklessly provides substantially false information to the commissioner, the Attorney General, or any district attorney.

history: (History: Added by Stats. 1990, Ch. 1118, Sec. 36.)

article: 1. General Powers


citation: FIN § 6550

text:
(a) A branch office is a legally established place of business of an association other than the home office, a remote service unit, or any agency, authorized by the board of directors and approved by the commissioner, where the business of an association may be conducted.

(b) An association may, with the approval of the commissioner, conduct business outside this state, subject to the laws of the state in which the business is done.

history: (History: Repealed and added by Stats. 1983, Ch. 1091, Sec. 2.)

article: 2. Branching and Agency Powers

path: 2. SAVINGS ASSOCIATION LAW > 4. Powers of Associations > 2. Branching and Agency Powers


citation: FIN § 6551

text:
(a) An agency of an association is a place or facility, stationary or mobile, other than the home office, a remote service unit, or a branch office, at or through which the association may transact business that is specified by the board of directors and approved by the commissioner.

(b) The agency may perform other special duties and functions as may be directed from time to time by the home office or a branch office and approved by the commissioner.

(c) An agency may perform only those activities, duties, or functions as are authorized for savings associations by the provisions of this division or regulations of the commissioner.

history: (History: Amended by Stats. 1988, Ch. 718, Sec. 11.5.)

article: 2. Branching and Agency Powers


citation: FIN § 6552

text: No association may establish or maintain a branch office or agency without the prior written approval of the commissioner, except that temporary and incidental agencies may be created for individual transactions and for special temporary purposes without approval.

article: 2. Branching and Agency Powers


citation: FIN § 6553

text:
(a) Each application for approval of the establishment and maintenance of a branch office or one or more agencies shall include the following:

(1) The proposed location of the branch or agency.

(2) The functions to be performed at the branch or agency.

(3) Any additional information the commissioner deems necessary to reach a decision.

(b) Each application shall be accompanied by the filing fee as prescribed pursuant to Section 9001 and by a budget of the association for the current earnings period and for the next succeeding annual period, which reflects the estimated additional expense of the maintenance of each branch or agency covered by the application.

article: 2. Branching and Agency Powers


citation: FIN § 6554

text: Upon receipt of a complete application for a branch office, the commissioner shall give written notice of the filing of the application to each association. The notice shall state the name of the association and the name of the city or community in which the branch is proposed to be located.

history: (History: Amended by Stats. 1985, Ch. 983, Sec. 8. Effective September 26, 1985.)

article: 2. Branching and Agency Powers


citation: FIN § 6555

text:
(a) Before acting on an application for a branch office, the commissioner may hold a hearing at a time and place specified in a notice of hearing.

(b) If a hearing is to be held, the hearing shall not be held less than 10 days after the mailing of a notice of hearing under subdivision (a).

(c) Any person may appear at the hearing in person or by agent or attorney, and, pursuant to regulations issued by the commissioner, show cause why the application should not be approved.

history: (History: Amended by Stats. 1985, Ch. 983, Sec. 9. Effective September 26, 1985.)

article: 2. Branching and Agency Powers


citation: FIN § 6556

text:
(a) Upon review of the application for a branch office or agency and after a hearing on the branch application, if one is deemed necessary, the commissioner shall determine whether all of the following criteria are met:

(1) The applicant’s policies, financial condition, and operations afford no basis for supervisory objection.

(2) The proposed branch office or agency will be opened within a reasonable time after approval, as determined by the commissioner.

(b) If the commissioner determines that the criteria set forth in subdivision (a) are met the application shall be approved.

(c) If the commissioner determines that the criteria set forth in subdivision (a) are not met the application shall be denied.

history: (History: Amended by Stats. 1987, Ch. 730, Sec. 13.)

article: 2. Branching and Agency Powers


citation: FIN § 6557

text: The provisions of this article relating to branch office and agency applications do not apply to a branch office or agency of an existing association acquired pursuant to a merger, consolidation, conversion, or transfer of assets.

article: 2. Branching and Agency Powers


citation: FIN § 6558

text: The commissioner may adopt rules and regulations relating to any action pertaining to branch offices and agencies regulated by this article.

article: 2. Branching and Agency Powers


citation: FIN § 6600

text: The savings liability of an association shall consist only of the aggregate amount of its savings accounts, plus interest earned or credited to the accounts, less redemption and withdrawal payments.

chapter: 5. Savings Operations

article: 1. Savings Liability

path: 2. SAVINGS ASSOCIATION LAW > 5. Savings Operations > 1. Savings Liability


citation: FIN § 6601

text: Except as limited by the association from time to time or by state or federal law or regulations, account holders may make additions to their savings accounts in amounts and at times they elect.

article: 1. Savings Liability


citation: FIN § 6602

text: Savings accounts may be opened for cash or, subject to any limitations or restrictions in regulations issued by the commissioner, for property in which the association is authorized to invest. In the absence of fraud in the transaction, the value of the property taken in payment, as determined by the board of directors, shall be conclusive.

article: 1. Savings Liability


citation: FIN § 6603

text: No member of a mutual association is responsible for any losses of the association, no savings account is subject to assessment, and no savings account holder is liable for any unpaid installments on the account.

article: 1. Savings Liability


citation: FIN § 6651

text: Except for savings accounts issued in marketable or bearer form, savings accounts shall be represented only by the account of each savings account holder on the books of the association, and the accounts or any interest in the accounts shall be transferable only on the books of the association and upon proper written application, and acceptance by the association of the transferee as a holder upon terms approved by the board of directors.

article: 2. Savings Accounts

path: 2. SAVINGS ASSOCIATION LAW > 5. Savings Operations > 2. Savings Accounts


citation: FIN § 6652

text:
(a) Upon the filing with an association by the savings account holder of record as shown by the books of the association, or by the holder’s legal representative, of an affidavit to the effect that the evidence of account, if any, has been lost or destroyed, and that the account has not been pledged or assigned in whole or in part, the association shall issue a new evidence of account, if applicable, in the name of the holder of record.

(b) The new evidence of account may state that it is issued in lieu of the one lost or destroyed and that the association shall not be liable for the loss or destruction of the original evidence of account.

(c) The association may require an indemnification or a bond in an amount it deems sufficient to indemnify the association against any loss which might result from the issuance of a new evidence of account under this section.

history: (History: Amended by Stats. 1984, Ch. 287, Sec. 19. Effective July 6, 1984.)

article: 2. Savings Accounts


citation: FIN § 6653

text:
(a) No association shall, directly or indirectly, for the opening or increasing of any savings account, give, sell, dispose of, or permit the giving, selling, or disposition of, for any one opening or increase anything having a cost or value in excess of the amount authorized by the commissioner by regulation.

(b) Notwithstanding subdivision (a) the commissioner is authorized to impose by regulation restrictions on associations, relating to the distribution and advertising of giveaways, equivalent to those imposed on federal associations doing business in this state.

article: 2. Savings Accounts


text:
(a) A troubled savings association may not accept funds obtained, directly or indirectly, by or through any deposit broker for deposit into one or more accounts.

(b) Any renewal of a savings account in any troubled savings association and any rollover of any amount on deposit in such a savings account shall be treated as an acceptance of funds by the troubled savings association for purposes of subdivision (a).

(c) The commissioner may, on a case-by-case basis and upon application by a savings association, waive the applicability of subdivision (a) upon a finding that the acceptance of these deposits does not constitute an unsafe or unsound practice with respect to that savings association.

(d) The commissioner may impose, by regulation or order, such additional restrictions on the acceptance of broker deposits by any troubled savings association as the commissioner may determine to be appropriate.

(e) For purposes of this section:

(1) “Deposit broker,” except as otherwise provided in paragraph (2), means either of the following:

(A) Any person engaged in (i) the business of placing deposits, or facilitating the placement of deposits, of third parties with financial institutions or (ii) the business of placing deposits with financial institutions for the purpose of selling interests in those deposits to third parties.

(B) An agent or trustee who establishes a savings account to facilitate a business arrangement with a financial institution to use the proceeds of the account to fund a prearranged loan.

(2) Subject to paragraph (3), “deposit broker” does not include any of the following:

(A) A savings association with respect to funds placed with that savings association.

(B) An employee of a savings association with respect to funds placed with the employing savings association.

(C) A trust department of a savings association, if the trust in question has not been established for the primary purpose of placing funds with financial institutions.

(D) The trustee of a pension or other employee benefit plan, with respect to funds of the plan.

(E) A person acting as a plan administrator or an investment adviser in connection with a pension plan or other employee benefit plan, provided that that person is performing managerial functions with respect to the plan.

(F) The trustee of a testamentary account.

(G) The trustee of an irrevocable trust (other than one described in subparagraph (B) of paragraph (1), as long as the trust in question has not been established for the primary purpose of placing funds with financial institutions.

(H) A trustee or custodian of a pension or profitsharing plan qualified under Section 401(d) or 403(a) of the federal Internal Revenue Code of 1986.

(I) An agent or nominee whose primary purpose is not the placement of funds with financial institutions.

(3) The exceptions specified in paragraph (2) do not apply to, and the term “deposit broker” includes, any savings association, and any employee of any savings association, that engages, directly or indirectly, in the solicitation of deposits by offering rates of interest (with respect to those deposits) which are significantly higher than the prevailing rates of interest on deposits offered by other associations and federal associations in the savings association’s normal market area.

(4) “Employee” means any person meeting all of the following criteria:

(A) The person is employed exclusively by the savings association.

(B) The person’s compensation is primarily in the form of a salary.

(C) The person does not share that compensation with a deposit broker.

(D) The person’s office space or place of business is used exclusively for the benefit of the savings association which employs the person.

(5) “Troubled savings association” means any savings association which does not meet the minimum capital requirements applicable with respect to that savings association.

history: (History: Added by Stats. 1990, Ch. 1118, Sec. 37.)

article: 2. Savings Accounts


citation: FIN § 6660

text:
(a) For the purposes of this section:

(1) “Account” means withdrawable or repurchasable shares, investment certificates, deposits, or savings accounts as defined in Section 561.2, 561.16, 561.28, 561.29, 561.42, or 563.6 of Title 12 of the Code of Federal Regulations pursuant to which the account holder from time to time may make deposits and effect withdrawals.

(2) “Account holder” means a person who is identified on the signature card for an account, or in the absence of a signature card, a person who has an interest in an account which is reflected on the records of the association for that account to whom statements of account or other notices are normally given, or the agent of such person.

(3) “Charges” means those charges which an association may, from time to time, impose on an account in the normal course of business in the operation of the account and, does not include:

(A) Charges which may be imposed for extraordinary services furnished at the specific request of the account holder.

(B) Charges or amounts required to be disclosed to the depositor pursuant to the Truth-in-Lending Act (15 U.S.C. Sec. 1601 et seq.) and Regulation Z (12 C.F.R. 226.1 et seq.), as amended.

(4) “Customer” means one or more natural persons.

(5) “Debt” means an interest-bearing obligation or an obligation that by its terms is payable in installments, which has not been reduced to judgment, arising from an extension of credit to a natural person primarily for personal, family, or household purposes, and does not mean a charge for savings and loan services, for a debit for uncollected funds, for dishonored checks cashed for a customer, or for an overdraft account imposed by an association on a savings account.

(b) An association is limited in exercising any setoff for a debt claimed to be owed to the association by a customer in that a setoff shall not result in an aggregate balance of less than one thousand dollars ($1,000) as shown on the records of the association for all accounts maintained by a customer with the association or any of its branches.

(c) Not later than the day following the exercise of any setoff with respect to an account for any debt claimed to be owed to the association by a customer, the association shall deliver to each customer personally or send by first-class mail postage prepaid to the address of each customer as shown on the records of the association a written notice in at least 10-point type containing the following:

(1) A statement that the association has set off all or part of a debt against the customer’s account, identifying the account, and giving the respective balances before and after the setoff.

(2) A statement identifying the debt setoff against the account and giving the respective balances due before and after the setoff.

(3) A statement that if the customer claims that the debt has been paid or is not now owing, or that the funds in the account consist of moneys expressly exempt pursuant to Chapter 4 (commencing with Section 703.010) of Division 2 of Title 9 of Part 2 of the Code of Civil Procedure, and listed in the notice, the customer may execute and return the notice to the association by mail at the address shown or personally to the branch where the customer’s account is maintained not later than 20 days after the date of mailing or personal delivery.

(4) A statement that (A) if the notice is executed and returned, the association may file an action in court to collect the debt, (B) that if a lawsuit is filed, the customer will be notified and have an opportunity to appear and defend, and (C) that if the association is successful, the customer will be liable for court costs, and attorney’s fees, if the debt so provides.

(5) A response form in at least 10-point type containing substantially the following:“The debt described in the Notice of Setoff received from the savings and loan association is__ isnot__ my debt or the debt of another person in whose name the account is maintained.“I claim that the debt:has been paid.is not now owing.is not subject to setoff because the money in the account is:Paid earnings (CCP 704.070)Proceeds from execution sale of or insurance for loss of a motor vehicle (CCP 704.010)Proceeds from execution sale of household furnishings or other personal effects (CCP 704.020)Relocation benefits (CCP704.180)Life insurance proceeds (CCP 704.100)Disability and health insurance benefits (CCP 704.130)Workers’ compensation benefits (CCP 704.160)Unemployment or strike benefits (CCP 704.120)Retirement benefits including, but not limited to, social security benefits (CCP 704.080, 704.110, 704.115)Public assistance benefits including welfare payments and supplemental security income (SSI) or charitable aid (CCP 704.170)Proceeds from sale of or insurance for damage or destruction of a dwelling (CCP 704.720, 704.960)Proceeds from execution sale of or insurance for loss of tools of a trade (CCP 704.060)Award of damages for personal injury (CCP 704.140) or wrongful death (CCP 704.150)Financial aid paid by an institution of higher education to a student for expenses while attending school (CCP 704.190) I declare under penalty of perjury that the foregoing is true and correct.Executed at City or County, California on DateSigned: ”(d) If the response form described in subdivision (c) executed by the customer is received by the association not later than 20 days after the date of mailing or personal delivery of the written notice, the amount of the setoff for any debt claimed to be owed to the association by a customer, and any service charges resulting from the setoff, shall be reversed and shall be credited to the customer’s account not later than the end of the third business day following receipt of the executed response form.

(e) The limitations provided in this section do not apply to accounts in which the association has a security interest expressed by a written contract as collateral for the debt owing to the association by the customer.

(f) The limitations provided in this section do not apply when a customer previously has authorized an association in writing to periodically debit an account as the agreed method of payment of the debt.

(g) The limitations provided in this section shall apply only to the exercise by an association of a setoff with respect to debts claimed to be owing to it by customers on or after July 1, 1976.

(h) Nothing in this section shall prejudice a person’s right to assert exemptions under Chapter 4 (commencing with Section 703.010) of Division 2 of Title 9 of Part 2 of the Code of Civil Procedure, or to assert a claim or defense as to the validity of the debt, in a judicial proceeding.

history: (History: Amended by Stats. 1994, Ch. 68, Sec. 8. Effective May 9, 1994.)

article: 2. Savings Accounts


citation: FIN § 6661

text:
Notice to an association or federal association of an adverse claim to a savings account of, or to personal property held for the account of, any person shall be disregarded, and the association or federal association, notwithstanding the notice, shall honor withdrawal applications and shall pay withdrawals and interest to the person or persons to whose credit the account stands or shall deliver the property to or upon the order of the person for whose account the property is held, without any liability on the part of the association or federal association; subject, however, to the exceptions provided in subdivisions (a) and (b):

(a) If an adverse claimant delivers to the association or federal association at the office at which the account is carried or the property held an affidavit of the claimant stating that of the claimant’s own knowledge the person to whose credit the deposit stands or for whose account the property is held is a fiduciary for the adverse claimant and that the claimant has reason to believe the fiduciary is about to misappropriate the account or the property, and stating the facts upon which the claim of fiduciary relationship and the belief are founded, the association or federal association shall refuse to pay withdrawals or interest on the account and shall refuse to deliver the property for a period of not more than three court days (including the day of delivery) from the date that the association or federal association received the adverse claimant’s affidavit, without liability on its part and without liability for the sufficiency or truth of the facts alleged in the affidavit.

(b) If at any time, either before, after, or in the absence of the filing of an affidavit by the adverse claimant, the adverse claimant procures and serves upon the association or federal association at the office at which the account is carried or the property held a restraining order, injunction, or other appropriate order against the association or federal association from a court of competent jurisdiction in an action in which the adverse claimant and all persons in whose names the account stands or for whose account the property is held are the parties, the association or federal association shall comply with the order or injunction, without liability on its part.

(c) The provisions of this section shall be applicable even though the name of the person appearing on the books to whose credit the account stands or for whose account the property is held is modified by a qualifying or descriptive term such as “agent,” “trustee,” or other word or phrase indicating that the person may hold the account or property in a fiduciary capacity.

(d) Nothing in the California Multiple-Party Accounts Law contained in Part 2 (commencing with Section 5100) of Division 5 of the Probate Code limits the applicability of this section.

history: (History: Amended by Stats. 1990, Ch. 79, Sec. 5. Operative July 1, 1991, pursuant to Stats. 1990, Ch. 710, Sec. 46.)

article: 2. Savings Accounts


citation: FIN § 6662

text: Nothing in this chapter shall prohibit an association or federal association from issuing tenancy in common, community property, and other types of savings accounts authorized by law.

history: (History: Added by Stats. 1984, Ch. 958, Sec. 3.)

article: 2. Savings Accounts


citation: FIN § 6663

text: If any attachment is levied upon any savings account or any other property maintained with an association or federal association, a copy of the writ and notice of attachment shall be served upon the manager or any other officer of the association or federal association. Service shall be made at the office or branch at which the savings account or other property is maintained, if the office or branch is in operation at the time of the service or, if the office, agency, or branch is not in operation at the time of service, at the home office of the association or federal association. Writs and notices of attachment which are not so served are not effective as to any savings account or other property maintained with the association or federal association, irrespective of any other provision of law relating to service of attachments.

history: (History: Added by Stats. 1985, Ch. 983, Sec. 10. Effective September 26, 1985.)

article: 2. Savings Accounts


citation: FIN § 6700

text: An association may contract with the proper authorities of any public or nonpublic elementary or secondary school or institution of higher learning, or any public or charitable institution caring for minors, for the participation and implementation by the association in any school or institutional thrift or savings plan, and it may accept savings accounts at the school or institution, either by its own collector or by any representative of the school or institution that becomes the agent of the association for that purpose.

article: 3. Contracts for Savings Programs

path: 2. SAVINGS ASSOCIATION LAW > 5. Savings Operations > 3. Contracts for Savings Programs


citation: FIN § 6701

text:
An association may contract with any employer, as follows:

(a) With respect to the solicitation, collection, and receipt of savings by payroll deduction to be credited to a designated account or accounts of its employees who voluntarily elect to participate.

(b) With respect to the direct deposit of wages or salary paid to the account of the employee by electronic or other medium upon authorization in writing by the employee and designation of the association as the recipient of the deposits.

article: 3. Contracts for Savings Programs


citation: FIN § 6702

text: An association may pay commissions or fees in cash or merchandise for soliciting deposits to any employee of the association or to any broker or agent as determined by the association.

article: 3. Contracts for Savings Programs


citation: FIN § 6725

text:
(a) Notwithstanding any other provision of law, an association or federal association may continue to recognize the authority of an attorney-in-fact authorized in writing to manage or to make withdrawals either in whole or in part from the savings account of a holder, whether minor or adult, until it receives written notice or is on actual notice of the revocation of authority, whether the revocation is express or by operation of law.

(b) Except as provided in Division 4.5 (commencing with Section 4000) of the Probate Code, written notice of the death or adjudication of incompetency of the account holder that is delivered to the office where the account is maintained shall constitute written notice of revocation of the authority of the attorney-in-fact.

(c) No association or federal association shall be liable for damages, penalty, or tax by reason of any payment made pursuant to this section.

history: (History: Amended by Stats. 1994, Ch. 307, Sec. 12. Effective January 1, 1995.)

path: 2. SAVINGS ASSOCIATION LAW > 5. Savings Operations > 4. Powers of Attorney on Savings Accounts


citation: FIN § 6750

text: Except as otherwise expressly provided in this article, an association or federal association may issue savings accounts to any married person or minor as the sole and absolute owner of the account, and receive payments by or for the owner, and pay withdrawals, accept pledges to the association, and act in any other manner with respect to the accounts on the order of a married person or minor. A married person or minor may establish a trust under Sections 401 and 408 of the Internal Revenue Code of 1986, as amended, and an association or federal association may issue savings accounts to the trust.

history: (History: Amended by Stats. 1990, Ch. 1118, Sec. 37.5.)

article: 5. Married Persons and Minors

path: 2. SAVINGS ASSOCIATION LAW > 5. Savings Operations > 5. Married Persons and Minors


citation: FIN § 6751

text: Any payment or delivery of rights to a married person, to any minor, or to a trust established by or for a married person, or a minor, or a receipt or acquittance signed by a married person or by a minor who holds a savings account, shall be a sufficient release of the association or federal association for any payment made or delivery of rights to the married person or minor.

history: (History: Added by Stats. 1983, Ch. 1091, Sec. 2.)

article: 5. Married Persons and Minors


citation: FIN § 6752

text:
(a) In the case of a minor, the receipt, acquittance, pledge, or other action required by the association or federal association to be taken by the minor shall be binding upon the minor with like effect as if the minor were of full age and legal capacity.

(b) Except under subdivision (c), the parent or guardian of the minor shall not have the power to attach or transfer any savings account issued to or in the name of the minor, provided that a parent or guardian of a minor aged 13 or less may require, by written notice delivered to the office where the account is maintained, that the signatures of both the minor and the parent or guardian be required for withdrawals from the account.

(c) In the event of the death of a minor the receipt or acquittance of either parent, guardian, or foster parent of the minor is a sufficient discharge of the association or federal association for any sums not exceeding in the aggregate two thousand five hundred dollars ($2,500) unless the minor has given written notice to the association or federal association to accept the signature of the parent, guardian or foster parent to withdraw a greater amount.

history: (History: Amended by Stats. 1984, Ch. 958, Sec. 4.)

article: 5. Married Persons and Minors


citation: FIN § 6800

text: An account in an association or federal association that is a multiple-party account as defined in Section 5132 of the Probate Code is governed by Part 2 (commencing with Section 5100) of Division 5 of the Probate Code.

history: (History: Amended by Stats. 1990, Ch. 79, Sec. 6. Operative July 1, 1991, pursuant to Stats. 1990, Ch. 710, Sec. 46.)

article: 6. Multiple-Party Accounts

path: 2. SAVINGS ASSOCIATION LAW > 5. Savings Operations > 6. Multiple-Party Accounts


citation: FIN § 6804

text: No association or federal association paying any survivor in accordance with Part 2 (commencing with Section 5100) of Division 5 of the Probate Code shall, because of the payment, be liable for any estate, inheritance, or succession taxes that may be due this state.

history: (History: Amended by Stats. 1990, Ch. 79, Sec. 7. Operative July 1, 1991, pursuant to Stats. 1990, Ch. 710, Sec. 46.)

article: 6. Multiple-Party Accounts


citation: FIN § 6805

text: The pledge or hypothecation to any association or federal association of all or part of a multiple party account, as defined in Section 5132 of the Probate Code, signed by any one or more tenants, whether minor or adult, upon whose signature or signatures withdrawals may be made from the account shall, unless the terms of the account provide specifically to the contrary, be a valid pledge and transfer to the association or federal association of that part of the account pledged or hypothecated, and shall not operate to sever or terminate all or any part of the account.

history: (History: Amended by Stats. 1989, Ch. 397, Sec. 13.5. Operative July 1, 1990, by Sec. 42 of Ch. 397.)

article: 6. Multiple-Party Accounts


citation: FIN § 6850

text: Any association may accept fiduciary savings accounts in the name of any administrator, executor, custodian, conservator, guardian, trustee, or other fiduciary for a named beneficiary or beneficiaries.

path: 2. SAVINGS ASSOCIATION LAW > 5. Savings Operations > 7. Accounts of Administrators, Executors, Guardians, Custodians, Trustees, and Other Fiduciaries


citation: FIN § 6851

text:
(a) The withdrawal value of a fiduciary account, and interest on it, or other rights relating to it, may be paid or delivered, in whole or in part, to the fiduciary without regard to any notice to the contrary as long as the fiduciary is living.

(b) The payment or delivery to the fiduciary or a receipt or acquittance signed by a fiduciary to whom payment or delivery of rights is made shall be a sufficient release of an association for the payment or delivery.

article: 7. Accounts of Administrators, Executors, Guardians, Custodians, Trustees, and Other Fiduciaries


citation: FIN § 6852

text:
(a) Whenever a person holding an account in a fiduciary capacity dies and no written notice of the revocation or termination of the fiduciary relationship has been given to an association and the association has no written notice of any other disposition of the beneficial estate, the withdrawal value of the account, and interest on it, or other rights relating to it, may, at the option of an association, be paid or delivered, in whole or in part, to the beneficiary or beneficiaries.

(b) In the absence of written notice to the contrary an association may presume that each beneficiary of an account with two or more beneficiaries has an undivided equal beneficial interest in the account.


citation: FIN § 6855

text: No association paying any fiduciary, beneficiary, or designated person in accordance with this article or the California Multiple-Party Accounts Law contained in Part 2 (commencing with Section 5100) of Division 5 of the Probate Code shall, because of the payment, be liable for any estate, inheritance, or succession taxes that may be due this state.

history: (History: Amended by Stats. 1990, Ch. 79, Sec. 8. Operative July 1, 1991, pursuant to Stats. 1990, Ch. 710, Sec. 46.)


citation: FIN § 6856

text: The provisions of this article apply to federal associations to the extent that they are not inconsistent with and do not infringe upon federal laws governing federal associations.


citation: FIN § 6900

text: If an association or federal association has received no written notice and is not on actual notice that the savings account holder has been adjudicated incompetent, it may pay or deliver funds to the account holder in accordance with the provisions of the savings account contract, and the receipt or acquittance of the holder shall be a sufficient release of that association or federal association for the payment or delivery.

history: (History: Amended by Stats. 1984, Ch. 958, Sec. 11.)

article: 8. Accounts of Incompetents

path: 2. SAVINGS ASSOCIATION LAW > 5. Savings Operations > 8. Accounts of Incompetents


citation: FIN § 6950

text:
(a) When a savings account is held in any association or federal association by a person who dies while domiciled in a sister state or foreign nation, the account, together with additions and interest, or any part of it, shall be exempt from any taxation otherwise imposed by this state.

(b) When a savings account is held in any association or federal association by a person who dies while domiciled in a sister state, the account, together with additions and interest, or any part of it, shall be paid to the sister state personal representative or other claimant under the Probate Code, provided the personal representative or other claimant has furnished the association or federal association with all of the documentation required under applicable provisions of the Probate Code and evidence of ownership of the account, if any, issued under Section 6652.

(c) Upon payment or delivery to the personal representative or other claimant after receipt of the documents specified in subdivision (b), the association or federal association is released and discharged to the same extent as if the payment or delivery had been made to a legally qualified local personal representative, and is not required to account for the application or disposition of the property.

history: (History: Amended by Stats. 1988, Ch. 1199, Sec. 14. Operative July 1, 1989, by Sec. 119 of Ch. 1199.)

article: 9. Accounts of Deceased Nonresidents

path: 2. SAVINGS ASSOCIATION LAW > 5. Savings Operations > 9. Accounts of Deceased Nonresidents


citation: FIN § 6951

text: No action at law or in equity shall be maintained against an association or federal association for payment made in accordance with this article.

history: (History: Amended by Stats. 1984, Ch. 958, Sec. 12.)

article: 9. Accounts of Deceased Nonresidents


citation: FIN § 7000

text:
(a) Administrators, executors, custodians, conservators, guardians, trustees, and other fiduciaries, insurance companies, business and manufacturing companies, banks, trust companies, credit unions, and other types of similar financial organizations, charitable, educational, eleemosynary and public corporations, funds and organizations, and municipalities and other public corporations and bodies, and public officials are specifically authorized and empowered to invest funds held by them, without any order of any court, in savings accounts of associations and federal associations and the investments are legal investments for those funds.

(b) No association shall have on deposit at any one time funds of the State of California, of the cities, counties, and other political subdivisions of the state, and of the public corporations and districts of the state, that, in the aggregate, exceed in amount 400 percent of its statutory net worth. The amount of funds on deposit secured by surety bonds shall not at any time, in the aggregate, exceed 100 percent of statutory net worth. The limitations of this subdivision as to the amount of funds which may be on deposit at any one time shall not apply to negotiable certificates of deposit.

(c) An association or federal association may act as a depositary or fiscal agent for the holding or handling of public funds notwithstanding the fact that a member of the legislative body or an officer or employee of the depositor is an officer, employee, or stockholder of the association or federal association, or of a savings and loan holding company or service corporation of the association or federal association.

(d) Under this section a member of a legislative body, or an officer or employee shall not be deemed “interested in any contract” as that phrase is used in Section 1090 of the Government Code, if that person’s sole interest is the fact that the person is an officer, employee, or stockholder of the association or federal association selected to act as depositary, paying agent, or fiscal agent or of its savings and loan holding company or service corporation.

(e) An officer or employee of a local public agency shall be deemed to have only a “remote interest” in a contract, as that term is used in Section 1091 of the Government Code, where the contract is entered into without competitive bidding under a procedure established by law, if the sole interest is that of an officer, director, or employee, of an association or federal association or savings and loan holding company or service corporation of the association or federal association with which a party to the contract has the relationship of borrower or depositor, debtor, or creditor, and if the conditions of subdivision (a) of Section 1091 of the Government Code are met.

history: (History: Amended by Stats. 1985, Ch. 983, Sec. 10.5. Effective September 26, 1985.)

path: 2. SAVINGS ASSOCIATION LAW > 5. Savings Operations > 10. Savings Accounts as Legal Investments and as Security; Public Funds


citation: FIN § 7001

text:
(a) Whenever, under the laws of this state or otherwise, a deposit of securities is required for any purpose, the savings accounts and accounts made legal investments by this article shall be acceptable deposits.

(b) Whenever, under the laws of this state or otherwise, a bond is required with security, the bond may be furnished, and the savings accounts and accounts made legal investments by this article in the amount of the bond shall be acceptable as security without other security.

article: 10. Savings Accounts as Legal Investments and as Security; Public Funds


citation: FIN § 7002

text: The provisions of this article supplement any and all other laws relating to and declaring what shall be legal investments for the persons, fiduciaries, corporations, organizations’ funds, municipalities, bodies, and officials referred to in this article and supplement the laws relating to the deposit of securities and the making and filing of bonds for any purpose.


citation: FIN § 7050

text: An association may issue savings accounts earning interest at different rates of return. The annual rate of return paid on a savings account may either be fixed at the time the account is issued or may vary on any basis specified at the time the account is accepted.

article: 11. Interest

path: 2. SAVINGS ASSOCIATION LAW > 5. Savings Operations > 11. Interest


citation: FIN § 7051

text: An association may classify its savings accounts on any basis including, but not limited to, character, amount, or duration of the account, regularity of additions, or location of origin of the account.

article: 11. Interest


citation: FIN § 7052

text: Except for accounts that are classified according to a specified contractual time or notice period, interest shall be based on the withdrawal value of each savings account at the beginning of the accounting period, plus additions made during the period (less amounts previously withdrawn and noticed for withdrawal, which for interest purposes shall be deducted from the latest previous additions) computed at the rate for the time the funds have been invested, determined as provided in Section 7053.

article: 11. Interest


citation: FIN § 7053

text:
(a) The date of investment in a savings account shall be the date of actual receipt by the association of the account or an addition to the account, except that if the association shall so determine, accounts in one or more classifications or additions received by the association on or before a date not later than the 20th day of the month (unless the day determined is not a business day, in which case it may be the next succeeding business day) shall receive interest as if invested on the first day of the month in which the payments were received.

(b) If the association makes a determination under subdivision (a) it also shall determine that payments received subsequent to that determination date shall either receive interest as if invested on the first day of the next succeeding month, or receive interest from the date of actual receipt by the association, except as provided by Section 866.3.

history: (History: Amended by Stats. 1985, Ch. 983, Sec. 11. Effective September 26, 1985.)

article: 11. Interest


citation: FIN § 7054

text:
The board of directors, by resolution, may determine any of the following:

(a) That interest shall not be paid on designated types of savings accounts from which withdrawals may be made upon demand or by negotiable and transferable order or authorization.

(b) That an association may establish minimum balance requirements for savings accounts to be eligible for distribution of interest.

(c) That, subject to applicable maximum regulatory limitations, an association may pay interest on a savings account at a rate or anticipated rate of return determined at the time that the account is accepted.

article: 11. Interest


citation: FIN § 7055

text: The directors shall determine the method of calculating the amount of any interest on any savings account classification as provided in this article and the time or times when the interest is to be paid or credited.

article: 11. Interest


citation: FIN § 7100

text:
(a) Notwithstanding any other provision of law, but subject to subdivision (b), an association may permit the owner of a deposit or account to make withdrawals by negotiable or transferable instruments for the purpose of making transfers to third parties.

(b) With respect to deposits or accounts on which interest or dividends are paid, subdivision (a) shall apply only to the deposits or accounts which consist solely of funds in which the entire beneficial interest is held by one or more individuals or by an organization which is operated primarily for religious, philanthropic, charitable, educational, political, or other similar purposes and which is not operated for profit.

(c) Notwithstanding any other provision of law, an association may provide for the automatic transfer of funds services at the direction of an account holder.

history: (History: Amended by Stats. 1988, Ch. 718, Sec. 12.)

article: 12. Withdrawals

path: 2. SAVINGS ASSOCIATION LAW > 5. Savings Operations > 12. Withdrawals


citation: FIN § 7150

text: At any time funds are on hand for the purpose, an association shall have the right to redeem by lot or otherwise, as the board of directors may determine, all or any part of any of its savings accounts on an interest date by giving 30 days’ notice by registered mail addressed to each affected account holder at the holder’s last address as recorded on the books of the association.

history: (History: Repealed and added by Stats. 1983, Ch. 1091, Sec. 2.)

article: 13. Redemption

path: 2. SAVINGS ASSOCIATION LAW > 5. Savings Operations > 13. Redemption


citation: FIN § 7151

text: Except with the prior consent of the commissioner, no association shall redeem any of its savings accounts when the association is in an impaired condition and when it has applications for withdrawal that have been on file more than 14 days and have not been reached for payment.

article: 13. Redemption


citation: FIN § 7152

text: The redemption price of savings accounts redeemed shall be the full value of the account redeemed, as determined by the board of directors, but in no event shall the redemption price be less than the withdrawal value.

article: 13. Redemption


citation: FIN § 7153

text: If the notice of redemption under Section 7150 has been given, and if on or before the redemption date the funds necessary for the redemption have been set aside and continue to be available for the redemption, interest upon the accounts called for redemption shall cease to accrue from and after the interest date specified as the redemption date and all rights with respect to those accounts shall terminate after the redemption date, except only as to any right of the account holder of record to receive the redemption price without interest.

article: 13. Redemption


citation: FIN § 7154

text:
(a) All certificates of ownership evidencing former savings accounts that have been called for redemption must be tendered for payment within the time limit specified in subdivision (b) of Section 1513 of the Code of Civil Procedure for escheat of unclaimed funds.

(b) Savings accounts that are not tendered for payment as set forth in this section shall escheat to the state as provided in the Unclaimed Property Law, Chapter 7 (commencing with Section 1500) of Title 10 of Part 3 of the Code of Civil Procedure.

article: 13. Redemption


citation: FIN § 7200

text: No association shall invest in any security under this chapter, other than in liquid assets, or in any loan at any time if the association fails to meet the minimum liquidity requirements prescribed by Section 566.2 of Title 12 of the Code of Federal Regulations, unless the commissioner has issued prior written approval. “Liquid assets,” as used in this section, has the same meaning as defined by the regulations codified in Section 566.1 of Title 12 of the Code of Federal Regulations.

history: (History: Amended by Stats. 1990, Ch. 1118, Sec. 37.8.)

chapter: 6. Investment Operations

article: 1. Required Liquidity

path: 2. SAVINGS ASSOCIATION LAW > 6. Investment Operations > 1. Required Liquidity


citation: FIN § 7250

text:
Notwithstanding any other provision of law, an association may invest in the following securities without limit, and in addition may invest not in excess of 5 percent of its assets in other securities that are deemed prudent by the association:

(a) Bonds or other interest bearing notes and obligations of the United States and those for which the faith and credit of the United States are pledged for the payment of principal and interest, or obligations that are fully guaranteed as to principal and interest by, the United States, any state, or any state’s political subdivisions, including its agencies, corporations and instrumentalities.

(b) Stock, bonds or obligations of any federal home loan bank.

(c) Stock or obligations of any international home loan bank or similar agency incorporated by authority of an act of Congress.

(d) Stock, obligations, participations, or other instruments of or issued by, or fully guaranteed as to principal and interest by, the Federal National Mortgage Association, the Student Loan Marketing Association, Government National Mortgage Association, Federal Home Loan Mortgage Corporation, or any other agency of the United States and an association may issue and sell securities that are guaranteed under paragraph (g) of Section 306 of the National Housing Act (12 U.S.C. Sec. 1701 et seq.).

(e) Bonds, other evidences of indebtedness or obligations of, or guaranteed as to principal and interest by, the Dominion of Canada or any of its provinces, provided that the principal and interest of the obligations are payable in United States funds.

(f) Obligations issued or guaranteed by the International Bank for Reconstruction and Development, by the Inter-American Development Bank, or by the Asian Development Bank.

(g) Demand, time or savings deposits, shares or accounts, or other obligations of any financial institution the accounts of which are insured by a federal agency.

(h) Commercial paper and corporate debt securities. Investments under this subdivision in the paper or securities of any one obligor or maker shall not exceed the greater of (1) the amount a national bank having identical total capital and surplus could so invest in the paper or securities of any one obligor or maker, or (2) the amount a commercial bank, as defined in Section 105, having an identical shareholders’ equity could so invest in the paper or securities of any one obligor or maker.

(i) Shares or certificates in any open-end management investment company that is registered with the Securities and Exchange Commission under the Investment Company Act of 1940 and the portfolio of which is restricted by the management company’s investment policy, changeable only if authorized by shareholder vote, primarily to investments authorized under this section.

(j) Bankers’ acceptances of the kind, character, and maturity eligible for rediscount with a Federal Reserve bank, and such other bonds and securities as authorized by Article 2.5 (commencing with Section 7260) or as the commissioner may authorize by rules and regulations.

history: (History: Amended by Stats. 1990, Ch. 1118, Sec. 38.)

article: 2. Investment in Securities

path: 2. SAVINGS ASSOCIATION LAW > 6. Investment Operations > 2. Investment in Securities


text: No savings association may directly or indirectly acquire or retain any corporate debt security unless the corporate debt security is rated in one of the four highest rating categories by at least one nationally recognized rating service.

history: (History: Added by Stats. 1990, Ch. 1118, Sec. 39.)

article: 2. Investment in Securities


citation: FIN § 7251

text: An association holding investments which have been approved by the commissioner shall not be required to dispose of them or to establish a reserve account if later the commissioner rescinds approval of the investments.

article: 2. Investment in Securities


citation: FIN § 7252

text:
(a) Notwithstanding any other provisions of this chapter, an association may, subject to regulations of the commissioner, invest in the capital stock, obligations, or other securities of service corporations.

(b) The total of all investments under this section shall not exceed 10 percent of the total assets of the savings association.

(c) A service corporation in which a savings association may invest shall only engage in those activities reasonably related to the activities of savings associations as the commissioner may approve.

(d) An association may make an investment under this section notwithstanding that the service corporation in which investment is authorized has invested in any other corporation (1) that is not incorporated in this state, or (2) that has stock available for purchase by persons other than associations.

history: (History: Amended by Stats. 1990, Ch. 1118, Sec. 40.)

article: 2. Investment in Securities


citation: FIN § 7260

text: Stock of a Federal Reserve bank.

history: (History: Added by Stats. 1988, Ch. 718, Sec. 14.)

path: 2. SAVINGS ASSOCIATION LAW > 6. Investment Operations > 2.5. Other Authorized Investments in Bonds and Securities


citation: FIN § 7261

text: Bonds of the State of California and those for which the faith and credit of the State of California are pledged for the payment of principal and interest, and registered warrants of the State of California.

article: 2.5. Other Authorized Investments in Bonds and Securities


citation: FIN § 7262

text: Bonds of any flood control and water conservation districts, or any zone thereof, having an assessed valuation on taxable real property of not less than one million dollars ($1,000,000), county, city and county, city, metropolitan water district, municipal utility district, any special district established by and within any municipal utility district, transit district, rapid transit district, including sales tax revenue bonds of that district of the State of California (herein referred to generally as public corporations) except the bonds of any particular such public corporation which may be declared ineligible for investment by commercial banks by regulations of the commissioner.

history: (History: Amended by Stats. 1996, Ch. 1064, Sec. 553. Effective January 1, 1997. Operative July 1, 1997.)


citation: FIN § 7263

text: Bonds of any other political subdivision, public corporation, or district of the State of California (herein referred to generally as public corporations) having the power, without limit as to rate or amount, to levy taxes to pay the principal and interest of those bonds upon all property within its boundaries subject to taxation by the public corporation, if the net direct debt of that public corporation together with its net overlapping debt does not exceed 25 percent of the assessed valuation of the taxable property within its boundaries according to the last official equalized county assessment roll.

history: (History: Amended by Stats. 2006, Ch. 538, Sec. 166. Effective January 1, 2007.)


citation: FIN § 7264

text:
Bonds or other evidences of indebtedness of, or which are unconditionally guaranteed by the State of Israel, the United States of Mexico, the Commonwealth of Puerto Rico, or any state of the United States other than California, for the payment of both principal and interest of which in United States dollars, the faith and credit of that entity is pledged; in limited obligations; and in the bonds or other evidences of indebtedness of any city, county, political subdivision, public corporation, or district (herein referred to generally as public corporations) of any state of the United States other than California, or of the State of Israel, or of the United States of Mexico, or of the Commonwealth of Puerto Rico, having the power without limit as to rate or amount to levy taxes to pay the principal and interest of those bonds upon all property within its boundaries subject to taxation by that public corporation; subject to the following:

(a) In the case of bonds constituting general obligations of any such state, commonwealth, dominion, or country, the state, commonwealth, dominion, or country has not within 10 years prior to that investment defaulted for a period of more than 90 days in the payment of any part of either principal or interest of any of its debts.

(b) In the case of limited obligations of any such state or commonwealth, (1) that the state or commonwealth has not within 10 years prior to the date of the investment defaulted for a period of more than 90 days in the payment of either principal or interest of any of its debts; (2) the special taxes pledged for the payment of the limited obligations shall have been collected for five fiscal years next preceding any investment and during the five fiscal years shall have averaged at least 112 times the debt service requirements, including those for principal, interest, and sinking fund, on all such special obligations existing at the time; and (3) the special taxes for each of those five fiscal years shall have equaled at least the amount of all the debt service requirements on those special obligations.

(c) In the case of bonds or other evidences of indebtedness of any public corporation of any state other than California, or of such commonwealth:

(1) The public corporation has had a corporate existence or been otherwise established and functioning for at least 10 years prior to the time of the investment.

(2) The public corporation has a population of at least 50,000 inhabitants according to the last federal or state census.

(3) The public corporation for a period of at least 10 years prior to the investment has not defaulted in the payment of any part of the principal or interest of any of its debts for a period of more than 90 days.

(4) The net direct debt together with the net overlapping debt of the public corporation does not exceed 10 percent of the assessed valuation of the property subject to taxation by the public corporation according to the last, official equalized assessment roll or list upon the basis of which taxes for debt service are based. For the purposes of this subdivision:

(A) The term “net direct debt” of any public corporation means all indebtedness of every kind after deducting from that indebtedness sinking funds available for the payment thereof, any indebtedness evidenced by tax anticipation notes for the payment of which nondelinquent taxes are pledged, obligations payable only from special assessments, revenue obligations payable only from special revenues pledged for their payment, and the proportion of any indebtedness issued for revenue-producing works, properties, or utilities which have been in operation for at least one year as the amount of the annual net revenue therefrom bears to the amount of the annual debt service requirements of those bonds.

(B) The term “net overlapping debt” of any public corporation means that proportion of the net direct debt, as defined, of any other public corporation (herein called overlapping corporation) which lies wholly or partially within the boundaries of the public corporation as the assessed valuation of the taxable property of the overlapping public corporation lying within the boundaries of the public corporation as shown by the last official equalized county assessment roll bears to the assessed valuation of all taxable property of the overlapping public corporation as shown by the last official equalized county assessment roll.