Every association has all the powers enumerated, authorized and permitted in this section and other rights, privileges, and powers as may be incidental to or reasonably necessary or appropriate for the accomplishment of the objects and purposes of the association, including those rights and powers not in conflict with this chapter conferred generally upon corporations by the Tennessee Business Corporation Act, compiled in title 48, chapters 11-27. Without limiting the foregoing, and except as otherwise provided by this chapter, every association has the power to:

(1)Deposits and Investments. Acquire deposits and pay interest on deposits, and lend and invest its funds;

Terms Used In Tennessee Code 45-3-105

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Association: means a capital stock or mutual savings and loan association. See Tennessee Code 45-3-104
  • Bank: means any person, as hereinafter defined, doing a banking business subject to the laws of this or any other jurisdiction and, for the purposes of supervision, examination and liquidation, includes industrial investment companies and industrial banks authorized by chapter 5 of this title. See Tennessee Code 45-1-103
  • Commissioner: means the commissioner of financial institutions. See Tennessee Code 45-3-104
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Deposit: means a deposit of money, bonds or other things of value, creating a debtor-creditor relationship. See Tennessee Code 45-1-103
  • Deposit liability: means the aggregate amount of deposit accounts of depositors or members, including interest credited to the accounts, less redemptions and withdrawals. See Tennessee Code 45-3-104
  • Electronic funds transfer: The transfer of money between accounts by consumer electronic systems-such as automated teller machines (ATMs) and electronic payment of bills-rather than by check or cash. (Wire transfers, checks, drafts, and paper instruments do not fall into this category.) Source: OCC
  • Fiduciary: A trustee, executor, or administrator.
  • Home: means a structure designed for residential use by not more than four (4) families or a single condominium unit, including common elements pertinent thereto, designed for residential use by one (1) family in a multiple dwelling unit structure or complex, and includes fixtures. See Tennessee Code 45-3-104
  • Interest: means that part of the net income, retained earnings, or surplus of an association that is payable to or credited to holders of deposit accounts. See Tennessee Code 45-3-104
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • Member: means a person holding a deposit account of a mutual association. See Tennessee Code 45-3-104
  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • Net worth: means the aggregate of all loan contracts of an association, plus the aggregate value of all other assets of the association, less the aggregate amount of deposit accounts of depositors, including interest credited to the accounts, and less any other liabilities of the association. See Tennessee Code 45-3-104
  • Person: means an individual, firm, partnership, joint venture, trust, estate, unincorporated association, company, or corporation organized under the laws of this or any other state, the United States or foreign country. See Tennessee Code 45-3-104
  • Personal property: All property that is not real property.
  • Personal property: includes money, goods, chattels, things in action, and evidences of debt. See Tennessee Code 1-3-105
  • Property: includes both personal and real property. See Tennessee Code 1-3-105
  • Recourse: An arrangement in which a bank retains, in form or in substance, any credit risk directly or indirectly associated with an asset it has sold (in accordance with generally accepted accounting principles) that exceeds a pro rata share of the bank's claim on the asset. If a bank has no claim on an asset it has sold, then the retention of any credit risk is recourse. Source: FDIC
  • Satellite office: means a facility that is operated ancillary to a home or branch office and that does not have more than one thousand (1,000) square feet of floor space nor more than four (4) teller stations. See Tennessee Code 45-3-104
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • Trustee: A person or institution holding and administering property in trust.
  • United States: includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
(2)Property Transfers. Acquire, hold, sell, dispose of, convey, mortgage, pledge, or lease any real or personal property;
(3)Borrowing. Subject to any rules or regulations promulgated by the commissioner, borrow from sources, individual and corporate, for the uses and purposes of the association, which borrowings may be evidenced by the notes, bonds, debentures, or other obligations or securities as the commissioner may prescribe; and pledge, mortgage, or otherwise encumber any of its assets in connection therewith; provided, that in no event shall any borrowing by an association exceed seventy percent (70%) of the deposit liability of the association unless the commissioner shall grant written approval of a greater percentage;
(4)Sale of Loans. Sell any loan, without recourse, including any participating interests therein;
(5)Insurance of Accounts. Obtain and maintain insurance of its deposit accounts by the federal savings and loan insurance corporation, any agency of this state or other federal agency established for the purpose of insuring deposit accounts in associations, or with any other insurer approved by the commissioner and having a net worth not less than one hundred million dollars ($100,000,000);
(6)Membership in Organizations. Qualify as and become a member of a Federal Home Loan Bank, or any other agency of the United States or the state of Tennessee or of any organization to the extent that the agency or organization assists in furthering or facilitating the association’s purposes or powers, and comply with any reasonable conditions of eligibility;
(7)Safe Deposit Boxes. Maintain and let safes, boxes, or other receptacles for the safekeeping of personal property in the same manner as banks are authorized to do under the laws of this state; provided, that in the event of any conflict with the law relating to safe deposit boxes in banks, this law shall be controlling. Any association has the right to construct a vault on its real estate, or on premises leased by it, or to rent any vault that in the judgment of the directors will provide reasonable means of safety against loss by theft, fire, or other cause, in which vault may be placed safes, boxes, or receptacles, for the keeping of jewelry, diamonds, gold, bank notes, bonds, notes, and other valuables, and that may be rented by the association to other persons on terms that may be agreed by the parties, but it is understood that in no event shall the association be liable for any loss of the jewelry, diamonds, gold, bank notes, bonds, notes, or other valuables by theft, robbery, fire, or other cause, the association not being the insurer of the safety of the property, nor in any manner liable therefor. The association is not required to take any note of property thus deposited, as the person who rents a safe, box, or receptacle is, for the term of the lease, the owner thereof;
(8)Money Orders, etc. Sell money orders, travel checks, and similar instruments drawn by it on its bank accounts or as agents for any organization empowered to sell the instruments within this state;
(9)Fiscal Agent. Act as fiscal agent of the United States, of this state, or of any subdivision of this state when duly designated for that purpose, and as fiscal agent perform the reasonable functions that may be required by it;
(10)Servicing. Service loans and investments for others;
(11)Limited Trusteeship. Act as trustee or custodian within the contemplation of the Federal Self-Employed Individual Tax Retirement Act of 1962, the Federal Employee Retirement Income Security Act of 1974, or similar federal acts, all as may be amended from time to time; and act as trustee or custodian with regard to other activities that may be authorized to federal associations by federal law or regulation. An association exercising the powers authorized by this subdivision (11) shall segregate all funds held in those fiduciary capacities from the general assets of the association and shall keep a separate set of books and records, showing in detail all transactions made under authority of this subdivision (11). If the individual records are kept as aforementioned, all funds held in the fiduciary capacities by an association may be commingled for appropriate purposes of investment. The funds may be invested in deposit accounts of the association in the event that the trust, custodial, or other plan does not prohibit the investment;
(12)Employee Stock Option Plans. Establish, as part of its compensation benefits to its full-time employees, a plan or plans whereby the employing association may issue shares of its capital stock to the employees as compensation to them at a value to be established periodically, but at least annually, by the board of directors of the employing association, which value may be less than the market value of the stock or less than the price at which the stock may be offered to nonemployees; provided, that the plan is approved by a majority of the stockholders of the employing association. The plan may include provisions for the creation of a retirement trust whereby the stock issued to the employees and accumulated earnings on the stock are held in trust for the employees’ retirement; and
(13)Electronic Funds Transfer Systems. Subject to rules and regulations of the commissioner, transfer funds between holders of deposit accounts, and third parties, or their designees, by means of electronic funds transfer systems. No such system or any part of the system, including terminals or processing centers, shall of itself be considered a branch or satellite office.
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