PRINTER'S NO. 494
No. 445 Session of 1975
INTRODUCED BY O'DONNELL, IRVIS, ROMANELLI, LEDERER,
M. E. MILLER JR., REED, LEHR, RICHARDSON, HAMMOCK, BLACKWELL,
ROSS, RAPPAPORT AND COHEN, FEBRUARY 18, 1975
REFERRED TO COMMITTEE ON BUSINESS AND COMMERCE,
FEBRUARY 18, 1975
AN ACT
1 Amending the act of November 30, 1965 (P.L.847, No.356),
2 entitled "An act relating to and regulating the business of
3 banking and the exercise by corporations of fiduciary powers;
4 affecting persons engaged in the business of banking and
5 corporations exercising fiduciary powers and affiliates of
6 such persons; affecting the shareholders of such persons and
7 the directors, trustees, officers, attorneys and employes of
8 such persons and of the affiliates of such persons; affecting
9 national banks located in the Commonwealth; affecting persons
10 dealing with persons engaged in the business of banking,
11 corporations exercising fiduciary powers and national banks;
12 conferring powers and imposing duties on the Banking Board,
13 on certain departments and officers of the Commonwealth and
14 on courts, prothonotaries, clerks and recorders of deeds;
15 providing penalties; and repealing certain acts and parts of
16 acts," providing for additional mandatory investments in
17 residential mortgages in this Commonwealth.
18 The General Assembly of the Commonwealth of Pennsylvania
19 hereby enacts as follows:
20 Section 1. Subsection (a) of section 310 and subsection (a)
21 of section 505, act of November 30, 1965 (P.L.847, No.356),
22 known as the "Banking Code of 1965," amended September 27, 1973
23 (No.72), are amended to read:
24 Section 310. Real Estate Loans
1 (a) [Permissible] Mandatory loans; permissible loans;
2 maximum amount and term--An institution may, subject to the
3 requirements of this section, make or acquire a loan secured by
4 a lien on real estate (including a lease-hold) located in any
5 state or the District of Columbia, in a dependency or insular
6 possession of the United States or in the Commonwealth of Puerto
7 Rico, in an amount and for a term not to exceed:
8 (i) in the case of improved real estate, including farm
9 land:
10 (A) two-thirds of the value for ten years, if
11 unamortized, or
12 (B) four-fifths of the value for thirty years, if
13 the terms of the loan require substantially equal
14 payments at successive intervals of not more than one
15 year each and in an amount sufficient to pay all
16 principal of and interest on the loan within the term of
17 the loan, except that the date of the initial payment on
18 a loan to a commercial or industrial borrower may be
19 deferred for a period not in excess of three years from
20 the date of the loan; or
21 (C) ninety percent of the value of a one-family
22 residential property for thirty years, in an amount not
23 to exceed forty thousand dollars ($40,000), or such
24 larger amount as the department may permit by regulation,
25 subject to the same requirements set forth in clause (B);
26 or
27 (D) ninety-five percent of the value for thirty
28 years, if that principal portion of the loan in excess of
29 seventy-five percent of the value is made in reliance
30 upon a private company mortgage insurance or guarantee
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1 acceptable to the Department of Banking, subject to the
2 same requirements set forth in clause (B); or
3 (ii) in the case of unimproved real estate to be
4 acquired or developed with the proceeds of the loan:
5 (A) two-thirds of the value for three years; or
6 (B) three-fourths of the value for five years, when
7 utilities, roads or streets necessary for the development of
8 such real estate have been completed.
9 If an institution makes loans secured by liens on real estate
10 then two per cent of the total real estate loans made by the
11 institution during the previous year shall be allocated for
12 loans not exceeding twelve thousand dollars ($12,000) each which
13 will be secured by liens on residential real estate located in
14 the Commonwealth if the institution receives applications for
15 the loans so allocated by September 1. Of the two per cent so
16 allocated, one-third shall be allocated to loans of eight
17 thousand dollars ($8,000) or less, one-third for loans between
18 eight thousand one dollars ($8,001) and ten thousand dollars
19 ($10,000) and the balance for loans between ten thousand one
20 dollars ($10,001) and twelve thousand dollars ($12,000).
21 * * *
22 Section 505. Real Estate Loans
23 (a) [Permissible] Mandatory loans, permissible loans;
24 maximum amount and term--A savings bank may, subject to the
25 requirements of this section, make or acquire a loan secured by
26 a lien on real estate (including a leasehold) located in any
27 state or the District of Columbia, in a dependency or insular
28 possession of the United States or in the Commonwealth of Puerto
29 Rico, in an amount and for a term not to exceed:
30 (i) in the case of improved real estate, including farm
19750H0445B0494 - 3 -
1 land:
2 (A) two-thirds of the value for ten years, if
3 unamortized; or
4 (B) four-fifths of the value for thirty years, if
5 the terms of the loan require payments which are
6 substantially equal except for the last payment at
7 successive intervals of not more than one year each and
8 in an amount sufficient to pay all principal of and
9 interest on the loan within thirty years, except that the
10 date of the initial payment on a loan to a commercial or
11 industrial borrower may be deferred for a period not in
12 excess of three years from the date of the loan; or
13 (C) ninety percent of the value of a one family
14 residential property for thirty years, in an amount not
15 to exceed forty thousand dollars ($40,000), unless the
16 department by regulation approves the granting of loans
17 under this subsection in greater amounts, subject to the
18 same requirements set forth in clause (B); or
19 (D) ninety-five percent of the value for thirty
20 years, if that portion of the loan in excess of seventy-
21 five percent of the value is made in reliance upon a
22 private company mortgage insurance or guarantee
23 acceptable to the Department of Banking, subject to the
24 same requirements set forth in clause (B); or
25 (ii) in the case of unimproved real estate to be
26 acquired or developed with the proceeds of the loan:
27 (A) two-thirds of the value for three years, or
28 (B) three-fourths of the value for five years, when
29 utilities, roads or streets necessary for the development
30 of such real estate have been completed.
19750H0445B0494 - 4 -
1 If a savings bank makes loans secured by liens on real estate
2 then two per cent of the total real estate loans made by the
3 savings bank during the previous year shall be allocated for
4 loans not exceeding twelve thousand dollars ($12,000) each which
5 will be secured by liens on residential real estate located in
6 the Commonwealth if the savings bank receives applications for
7 the loan so allocated by September 1. Of the two per cent so
8 allocated, one-third shall be allocated to loans of eight
9 thousand dollars ($8,000) or less, one-third for loans between
10 eight thousand one dollars ($8,001) and ten thousand dollars
11 ($10,000) and the balance for loans between ten thousand one
12 dollars ($10,001) and twelve thousand dollars ($12,000).
13 * * *
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