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                               OFFICE       OF THE   ATTORNEY       GENERAL   OF TEXAS
                                                         AUSTIN
                  GROVER   SEUERS
                  A-E-f     GWERRIL




                  Honorable L. 3. Johnson
                  at30mhhwmr,   Department or            BEiaklng
                  Au8tln. Tome
                  Dear sir:                                 Ret      Construotion
                                      ...
                 .-.
                                           ,d..




                                                            .
Hon. L. S. Jotmson, page a




         "1. Ths seaurlty 1s a first lien upon s&oh
    real estate or the loan or fnrestmsnt nmdo by th8
    bank Is wholly guaranteed by the Administrator of
    Veteran8 ArreIrtJunaar Title III of the ZJenios-
    smn's Readjostmeat Aot of 1944, se amended from
    time to time.
         "2. Ths total (net balsnos* owine upon the
    tndsbtsdnsss seo~red by suoh lien (a) dose not      .
    exoeed fizty per oent (!5Wi)of the epprelesd value
    or suoh rssl sstatq or (b) does not exosed slrty
:   per oent (6oib)of tha appraisal value of ruoh red.
    e&ate enU mush loan or bbllgatlon pxwldqa for
    uniform monthly, pua~rts'rry,
                                abmi~wal.,   or annual
    reduotloa~ of prinolpal ~fnauoh amounta aa to mtlre
    Sokty pm oant (40$) thardf within flW(ti) yearn.’




    taxes aoreered against the badurif;y.The ag regat*
    of loan and lmm&ments   of the 02$00 pzovldeiirar
    in thla Submeatlon (a) Of Swtlciri%, made'by #my
    Stafo Bank ahsllnwer,   nlthout the~~wrlttin~~neezW         :
    of the Commlseloner exabed ths oirtifletisurplop uul
    o&pita1 af suah bank.
          "The term *rsslCsntlel -al eatstsf PB us&in
     this subrmtlon (0) of Seation e, shall mesa land on
     whioh la situated a diwellingof not more than feur
     (4) iamily units.,the p&Wary we af~whioh ifi~ossu-     I ~.
     panoy a8 6 home.
          "The term *net balance' 6s use4 in this.Seotion
     2 shall man the balanoa obtaiaed atfir deduotlng
     tmm any loan or obll. tlon the portion thiireof
     guaranteedby the Add?’
                          n%strator of.Vaterans Aif'alrm
     under Title III of the Servrioemsn!sl&ed$Mtmenk Aoti
     0r 1944, aa amnffad rrom tliw to time.*
Fim. L. 5. ii&&n;   page 5.



          Art1010 11, Of Ohapt4rV,   14 ae f4ll0m:
          "Any pro&lOn   of thi4 Code to the oontrery
     notwlth&andlng, any state beak may make any loan
     or ln~8tiuant whloh suoh bank could make were it
     opantlng a8 a natiaml bank, and the amking of
     4aeh loan ox lnrartnmnt shdl not oonstitute a‘
     vloletlon 0r any penal pmrlelon of the btetutee
     of the State.'
           Statq~BanlP,la Texas have only tha &&warsoonfarre&     '
upon the4 by t&a '#tatate of.the.State.anA the ohartere ua#ar
rrhioh they ao& an4 hcvo no.powea beyond thle from any other
@wammatit @r~8oaroa.. 'The Ooda ia a eomprahanelta  one and
oovarn the wh@la flald.oftha o&axutlonof 8-h banks, ‘It lw
Smlllar lew in et~tutory aoMfrmMoa      that auoh a ooda 8himle
be aoMtsuad in ifr.antl~y,     48 4 whola~.glving aitaot to arasy
portion tRamat: a8 6.h'lmtagta&part O? the law aotamlng tRa
                %rtnmt~
pmrtiralq il%& T ; ~:~lOlt, :4woa4I. ii-etelmnig e&me‘ e%ola&e
the ahasaot~r 'of
do08 not et&inl.,ala~&a';.
                              pexmitbat by.irtlele llc But it
                       oh 'fha'oonti'ery,
                                        artlola Xl .%mae muah a

                                                               i., ;&:    2;im.
                                                                             : ..



                                                                         ,I'
         *lluireaion for *he lnolu8lon of A*lale~~l1, if one              -;;.
                                  It~aarv~ the whole#ome.got-'
                                 tlla~ridnatlon between mational
                                the latter*8 hurt.
         'scrahaiudt~.~r'reao~ned.'b~ the aoztgmm~  a&ably in.
deaying naklhal lssoelatlon the rl&ht to malnldn braaeh be&s
in tlmse atatW who88 lawa forbid brulah banking. ~8 tsaib by
Kr. Loeohman; Attorney for a~ taterested,bank, a oopy Q? who40
oplnl~~'hci464lp4niao
                    ymlr requo4tt
          *It wan 0164rly the lntsntlon of the L4glfbl4tUXV
     to allow Sate banks egu41 opportnulty wlth~atian4l.
     banke in the making of loam qnd lnrestm4nttiby pm-
     tiding ln Artfole SIB-511 that notwlthsi~azn3lng
                                                    any
     oontrary prooislonr of the c0a0;e state bank map
     make any loena or ltiveatmentswhloh aa&3 bank qotid
     make ware it operating as 8~national bank.*
                                                                                .
Hon. L. ,s; Johluon, page 4   ..



           But we all(b6e8t,'hDwwerr
                                   t&la ham nOthi& to do with
the question of the loanlimlt of the .$dlvlduel bank oonoemed.
Rs are hot0 ilonllng with the quality, - eli~lblllty of invest-
ments, and not rith the puantltatlre feature a8 preaoribed hby
Artlole I of Chapter A OS the Code. Se said, in Opinion Ho.
0-6609, addmdraed to Yr. Jamleon, Banklw Comal8sioner, un&?r
date of saptember 18, 10Csr
          "It foll&w, we think, that under the code a
     State bank mny lawfully invest in thase obligations
     ot another State, or its p~litloal sub6lridons, in
     rbloh a national bank domlolled in thlm State 1Ji   .
     authorized to invest; but that the 1mn 1Mt     of
     Teur WOUU at111 apply a6 fo.saoh out-of-date                         ' '
     lnvedaerita, a8 well a to %¶io.ae in the.Statt.*
           trust
             Wg     thit.rhatwe' h&e   &id     suiticiqntlr answw15
yourlnqtlldes.




Approved Feb.87,
amvw 883lsla .
AttOrney Oeobral   of Texan                  AppnAsdi          ‘apiaion
                                                               aoarmittee
OS 1rt;djm                                   BY .&!L.L...

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