Honorable           W.     Sale     Lewis                                  Opinion           No.      M-506
Commissioner,
Texas       Savings         and Loan            Department
P.O.       Box     1089
Austin,      Texas                                                  Re:          Whether           state    chartered
                                                                                 savings         and loan         associa-
                                                                                 tions     may      raise        capital
                                                                                 through         deposit-type             ac-
Dear      Commissioner                Lewis:                                     counts.


                 In your         recent      request        for     an opinion            from      this     office       you ask
whether       a state        chartered            savings          and loan        association             may         lawfully
accept      “deposit-type”                accounts,            which      you describe               as a type           of sav-
ings     deposit         at a guaranteed             rate      of interest.               No dividends             will     be
declared         but the         depositor         does     become          a voting         member              of the     in-
stitution        entitled        to a pass        book      or     certificate           under       a debtor-creditor
relationship.              You     point        out that Section             6. 20 of Article               852a,         Vernon’s
Civil     Statutes,         enacted         in 1969       by the 6lst             Legislature,              provides            as
follows:


                             “Notwithstanding                    any provision              of this        Act
                 to the contrary,                an association              may         raise     capital        in
                 the manner           and form            and pay         dividends,             earnings          or
                 interest        thereon         in the manner              which         the association
                 could,      if it were          a federal          association             as     defined        in
                 Section         1. 03(9)       of this     Act.     ”


                 At the time          of the passage                of Section            6. 20,     federal           associations
were      authorized             to use     the deposit-type                account.             12 U.S.         C. A.,         Section
1464(b)(     1) provides            in part        as follows:


                             “An      association              may       raise     capital         in the form
                 of such         savings        deposits,          shares,         or other          accounts,
                 for    fixed,      minimum,              or     indefinite        periods          of time
                 (all    of which         are     referred         to in this        section          as    sav-




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Honorable         W.     Sale      Lewis,         page        2                  M-      506




                ings    accounts          and all        of which             shall     have      the    same
               priority         upon      liquidation)             as are        authorized             by its
                charter         or by regulations                  of the Board,                 and may         issue
                such     passbooks,              time     certificates                of deposit,          or    other
                evidence         of savings            accounts           as     are     so authorized.
                Holders         of savings         accounts              and obligors              of an associa-
                tion    shall,      to such        extent          as may           be provided           by its
                charter         or by regulations                  of the Board,                 be members              of
                the association,                 and    shall       have       such      voting         rights     and
                such     other      rights        as are          thereby           provided.       ”


This      statute      has     been      further        implemented                   by Section          545.    l-2,        et seq.      ,
Rules      and Regulations                for    Federal           Savings            and Loan          Systems.


                In addition         to Section           6. 20 of the Texas                     Savings          and Loan        Act,          as
quoted      above,        the    Building         and Loan            Section           of the Finance                Commission
has    promulgated              rules      governing              both       savings        accounts        and deposit              ac-
counts.         Rules        and Regulations              for       Savings           and Loan          Associations,                Ch.       9,
as    amended.


                It is our        conclusion            that       a state-chartered                 association               may     raise
capital     through          such       deposit-type              accounts            as you      contemplate.                 Our
opinion        is based        on the provisions                   of the Texas              Savings        and Loan            Act     and
the    clear     declaration            of the legislative                   will     in Section          6. 20 as quoted
above.         Section        4. 01 of the Texas                  Savings           and Loan         Act     provides:


                               “Every       association              incorporated                 pursuant        to
                or     operating          under      the provisions                   of this     Act     shall
                have     all     the powers             enumerated,                 authorized           and per-
                mitted        by this      Act     and     such          other        rights,      privileges
                and powers              as may         be incidental                to or       reasonably
                necessary           for    the accomplishment                          of the objects             and
                purposes          of the association.                    ”


Section        6. 01 provides:


                               “There        shall      be no limit              on the number                  and
                value        of savings          accounts           an association                may      accept
                unless         limits      are    fixed       by its         board       of directors.            ”


Section        6. 03 provides,              in part:




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Honorable          W.      Sale        Lewis,      page     3                   M-      506




                                 “Each      holder       of a savings             account          shall
                 execute         a savings         contract         setting          forth    s       special
                 terms       and provisions               applicable            to such         account.           and
                 the conditions              upon which          withdrawals                 may    be made
                 not inconsistent               with     the provisions                 of this     Act        .         ”
                 (Emphasis             added.      )


Section         6. 04 provides:


                                 “As     evidence        of each        such       savings         account
                 the associations                shall     issue       to the holder              of such
                 account         either      an account          book       or       certificate.          ”


                 When      the above            quoted      statutes        are         considered             as “in        pari    material’
(See    53 Tex.           Jur.    2d 278,        Statutes,          Sec.        185),     it becomes                clear     that    Texas
savings         and loan         associations            are     authorized             to raise       capital           through       such
deposit-type             accounts           as hereinabove              described             by you.              Our   opinion,       how-
ever,     is limited             and confined            to this       premise.


                                                       SUMMARY


                                 Deposit-type            accounts          may       be accepted               by
                 state     chartered            savings        and loan          associations              under
                 the authority              of Sections         4. 01,      6. 03,        6. 04 and 6. 20,
                 Texas      Savings           and Loan          Act.
                                                                           /7




                                                                                          DC.       MARTIN
                                                                                          eneral      of Texas


Prepared          by Ralph             R.   Rash
Assistant         Attorney             General


APPROVED:
OPINION           COMMITTEE


Kerns       Taylor,         Chairman
George          Kelton,      Vice-Chairman




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Honorable        W.   Sale    Lewis,   page    4       M-506




Louis     G.    Neumann
John    Banks
Charles        Rose
Roy     Moue=


Meade      F.    Griffin
Staff   Legal     Assistant


Nola    White
First     Assistant




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