SAVINGS AND LOAN ASSOCIATIONS -- LOANS PERMITTED

SAVINGS AND LOAN ASSOCIATIONS -- LOANS PERMITTED

The state chartered savings and loan association may make any unsecured loan which a federal savings and loan association may make as authorized by federal law and regulation.

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                                                                October 27, 1949

Department of Public Institutions
Social Security Building
Olympia, Washington                                                                                                              Cite as:  AGO 49-51 No. 148

Attention:  !ttMr. A. O. Kent, Supervisor
            Division of Savings and Loan

Gentlemen:

            We have your letter of October 13, 1949, in which you ask the following question:

            May a state chartered savings and loan association make any unsecured loan which a federal savings and loan association may make as authorized by federal law and regulation?

            The conclusions reached may be summarized as follows:

            A state chartered savings and loan association may make any unsecured loan which a federal savings and loan association may make as authorized by federal law and regulation.

                                                                     ANALYSIS

            Section 8, chapter 257, Laws of 1947, added a new section to chapter 235, Laws of 1945, to be known as section 74B (3717-193B Rem. Supp. 1947), reading:

            "Notwithstanding any provision of this act, an Association may invest its funds in any loan or purchase which is permitted to a Federal savings and loan association doing business in this state."

             [[Orig. Op. Page 2]]

            Section 67, subdivision (4), chapter 235, Laws of 1945 (3717-186 Rem. Supp. 1945) provides:

            "Notwithstanding the provisions of this section, an association may make any loan which is permitted to a Federal Savings and Loan Association doing business in this state."

            Section 6, chapter 20, Laws of 1949, amended section 67, supra, carrying the same identical wording as did subsection (4).

            Your letter further states that federal savings and loan associations were authorized to make certain loans under a federal law approved August 6, 1947, and that the loans are now permitted by rules and regulations of the Federal Loan System effective August 15, 1949.

            You further state that there has been some question whether the laws of the State of Washington are broad enough to include federal laws and regulations made subsequent to the Washington law.

            The general rule of law is that when a statute adopts a part or all of another statute that the adoption takes the statute as it exists at the time but does not include subsequent additions or modifications of the adopted statute unless the adopting statute expressly so declares.  The rule of law is found in 50 Am.Jur., Statutes, section 39, page 58, reading as follows:

            "It is a general rule that when a statute adopts a part or all of another statute, domestic or foreign, general or local, by a specific and descriptive reference thereto, the adoption takes the statute as it exists at that time, and does not include subsequent additions or modifications of the adopted statute, where it is not expressly so declared.  The subsequent amendment or repeal of the adopted statute is not within the terms of, and has no effect upon, the adopting statute, where the latter statute is not also amended or repealed expressly or by necessary implication.  This rule prevails in the case of the adoption of a specific statute, as distinguished from the adoption of the law generally relating to a particular subject.  * * *"

             [[Orig. Op. Page 3]]

            Chapter 235, Laws of 1945, and chapter 257, Laws of 1947, both became effective under Washington law before the adoption of the federal law on August 6, 1947.  However, section 6, chapter 20, Laws of 1949, would unquestionably act as an adoption of such federal law.  It is to be noted that there is a distinction between the wording of subdivision (4), section 67, chapter 235, Laws of 1945, and the same wording being contained in section 6, chapter 20, Laws of 1949, which provides that a Washington association "may make any loan which is permitted to a federal savings and loan association," and the wording of section 8, chapter 257, Laws of 1947, in that the latter act provides that a Washington association "may invest its funds in any loan or purchase which is permitted to a federal association."  Subsection (4) and section 6,supra, both pertain to "this section," whereas section 8,supra, permits an association to invest its funds.  We cannot, however, regard the distinction in terminology as having any particular bearing herein.  We are inclined to the view that all three of these sections, for practical purposes and exclusive of their restrictions (the 1945 and 1949 enactments being restricted to "this section" and the 1947 enactment being without restriction since the provision is "notwithstanding any provision of this act"), attempt to authorize Washington savings and loan associations to make anyloan permitted to federal associations.  We do not believe that any of these three statutory enactments of 1945, 1947 or 1949,supra, fall under the classification above set forth from 50 Am.Jur.  None of the Washington laws make any attempt to adopt a specific statute but they adopt the law generally applicable or relating to a particular subject.  The rule applicable thereto is contained in the same section from 50 Am.Jur., above quoted, and reads as follows:

            "* * * But when the adopting statute makes no reference to any particular statute or part of statute by its title or otherwise, but refers to the law generally which governs a particular subject, the reference in such a case includes not only the law in force at the date of the adopting act but also all subsequent laws on the particular subject referred to, so far at least as they are consistent with the adopting act.  Indeed, whenever the language of the adopting act is such as to evidence an intention on the part of the legislature that the act as it then existed and as it might thereafter be amended is to be adopted, the courts will give effect to that intention, and the adopted act and amendments thereto will be held to be within the meaning of the adopting act and to govern the subject matter thereof."  See alsoCorkery v. Hinkle, 125 Wash. 671, 217 Pac. 47; and annotation contained in 168 A.C.R. 627, 632.

             [[Orig. Op. Page 4]]

            We believe that the effect of the above quoted Washington statutes is to authorize a Washington savings and loan association to make any unsecured loan which a federal savings and loan association may make in this state, and that it is immaterial whether such federal association acts under a specific federal statute or under authority of the rules and regulations for the Federal Savings and Loan System.

            And such is our opinion.

Very truly yours,

SMITH TROY
Attorney General

GEORGE DOWNER
Assistant Attorney General