Section 3
SEC. 3. Section five of the same Act is hereby amended to read as follows: "SEC. 5. Powers of savings and loan association. — A savings and loan association shall be incorporated under the Corporation Law, and in addition to the powers therein granted whenever applicable, it shall exercise the following: "(a) To grant loans of not exceeding the amount deposited by the borrower plus his four months' salary or regular income in the case of a permanent employee or wage earner, or seventy per cent of the fair market value of any property acceptable as collateral on first mortgage that he may put up by way of security: Provided, That no loan shall have a maturity date of more than three years, except loans on the security of unencumbered real estate for the purpose of home building and home development which may be granted with maturities not exceeding twenty years subject to regulations prescribed by the Monetary Board: Provided, further, That in the case of a borrower who is a permanent employee or wage earner, the treasurer, cashier or paymaster of the office employing him is authorized, the provisions of any existing law, rule and regulation to the contrary notwithstanding, to make deductions from his salary, wage, or income pursuant to the terms of his loan, to remit deductions to the savings and loan association, and to collect such reasonable fee for his services as may be authorized by rules promulgated by the Monetary Board. "(b) To charge interest within the limits allowed by law, and collect such necessary fees incidental to the grant of loans as may, by regulation, be authorized by the Monetary Board; "(c) Subject to such rules as the Monetary Board may approve, to discount with recourse commercial papers and accounts receivables; "(d) To invest its funds in any sound non-speculative enterprise, as well as in bonds, securities, and other obligations issued by the Government of the Philippines, or any of its political subdivisions, instrumentalities or corporations including government-owned or controlled corporations subject to the rules and regulations of the Monetary Board: Provided, That stock savings and loan associations may invest in equities only of such allied undertakings as may be approved by the Central Bank for banks of their category as provided for in Section 6-A of Republic Act No. 337, as amended: Provided, further, That (a) the total investment in equities shall not exceed twenty-five percent (25%) of the net worth of the association; (b) the equity investment in any single enterprise shall be limited to fifteen per cent (15%) of the net worth of the association; (c) the total equity investment of the association in any single enterprise shall remain a minority holding in that enterprise, except where the enterprise is not a financial intermediary;, and (d) the equity investment in other banks, if allowed by the Monetary Board, shall be subject to the same limitations imposed on similar investments' of commercial banks and shall be deducted from the investing stock savings and loan association's net worth for purposes of computing the prescribed ratio of net worth to risk assets. Equity investments shall not be permitted in non-related activities. Where the allied undertaking is a wholly or majority-owned subsidiary of the investing association, it may be subject to examination by the Central Bank. "(e) To allow member-depositors to participate in the profits of the savings and loan association on the basis of their deposits on the date dividends are declared; and "(f) To borrow money or incur such obligations not exceeding twenty per centum of the total assets of the association, from any public lending institutions, such as the Development Bank of the Philippines, the Philippine National Bank, the Government Service Insurance System, the Social Security System, and from such private lending institutions as may be approved by the Monetary Board, including other stock savings and loan associations. The Monetary Board may, in meritorious cases, raise the ceiling on the borrowing capacity of a savings and loan association to an amount not exceeding thirty per centum of its total assets: Provided, That in the case of a non-stock savings and loan association organized by employees of an entity or a corporation, such association may borrow funds from said entity or corporation but not vice versa. "(f-1) To maintain deposits with banks and other stock savings and loan associations: Provided, That the amount of such deposits shall be subject to the loan limit to a single borrower as prescribed herein or by other special laws or regulations. "A savings and loan association may, subject to such rules as the Monetary Board may promulgate, also borrow from, or rediscount notes, bills of exchange and other commercial papers with the Central Bank. The rate of interest on such obligations or borrowings to be charged such associations shall not be more than that charged rural banks."