Section 5
SEC. 5. Powers of savings and loan association.&mdashA 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 percent of the fair 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 one year: And 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. For the purpose of this Act, deposits made by an association to a bank shall not constitute a loan; (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; (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 such dividends are declared; and (f) To borrow money or incur such obligations up to not more than five per centum of the total assets of the, association, from any public lending institutions, such 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 other than another savings and loan association as may be approved by the Monetary Board; the Monetary Board may, in meritorious cases, raise the ceiling on the borrowing capacity of a savings and loan association to not more than ten per centum of its total assets.