ARTICLE 1. General Powers [6500. - 6530.]

Cal. Financial Code - FIN 1.
in effect

Cal. Financial Code - FIN § 6500. Section 6500.

(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.

Cal. Financial Code - FIN § 6501. Section 6501.

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.

Cal. Financial Code - FIN § 6502.5. Section 6502.5.

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.

Cal. Financial Code - FIN § 6503. Section 6503.

(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.

Cal. Financial Code - FIN § 6504. Section 6504.

(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.

Cal. Financial Code - FIN § 6505. Section 6505.

(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.

Cal. Financial Code - FIN § 6507. Section 6507.

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.

Cal. Financial Code - FIN § 6508. Section 6508.

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.

Cal. Financial Code - FIN § 6509. Section 6509.

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.

Cal. Financial Code - FIN § 6511. Section 6511.

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.

Cal. Financial Code - FIN § 6514. Section 6514.

(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.

Cal. Financial Code - FIN § 6515. Section 6515.

(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.

Cal. Financial Code - FIN § 6516. Section 6516.

(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.

Cal. Financial Code - FIN § 6517. Section 6517.

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.

Cal. Financial Code - FIN § 6518. Section 6518.

(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.

Cal. Financial Code - FIN § 6519. Section 6519.

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.

Cal. Financial Code - FIN § 6520. Section 6520.

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.

Cal. Financial Code - FIN § 6521. Section 6521.

(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.

Cal. Financial Code - FIN § 6522. Section 6522.

(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.

Cal. Financial Code - FIN § 6523. Section 6523.

(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.

Cal. Financial Code - FIN § 6524. Section 6524.

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.).

Cal. Financial Code - FIN § 6525. Section 6525.

(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.

Cal. Financial Code - FIN § 6525.5. Section 6525.5.

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.

Cal. Financial Code - FIN § 6526. Section 6526.

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.

Cal. Financial Code - FIN § 6527. Section 6527.

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.

Cal. Financial Code - FIN § 6528. Section 6528.

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.

Cal. Financial Code - FIN § 6529. Section 6529.

(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.

Cal. Financial Code - FIN § 6530. Section 6530.

(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.
Source: CA Legislative Counsel Bulk DataURL: https://downloads.leginfo.legislature.ca.gov/pubinfo_2025.zipFetched: 6/27/2026

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