Fritz, Ard and Pressler. The opinion of the court was delivered by Pressler, J.A.D.
These consolidated appeals present a narrow but important question regarding the scope of the investment powers accorded by the Legislature to savings and loan associations.
The most recent comprehensive revision of the Savings and Loan Act, N.J.S.A. 17:12B-1 et seq. , enacted in 1963, permits such associations to invest "In any investment in which savings banks of New Jersey are or shall be authorized to invest by any law of this State * * *." N.J.S.A. 17:12B-165(5). In 1975 Article 12 of the Banking Act of 1948, N.J.S.A. 17:9A-53 to 59, was amended by the adoption of N.J.S.A. 17:9A-53.1, which provides in full as follows:
A savings bank may invest in or make installment loans upon the terms and conditions prescribed for banks in accordance with article 12 of the act to which this is a supplement; provided, however, that the total of all such loans made by a savings bank pursuant
to this act shall not exceed 10% of such savings bank's deposits.
The immediate and conceded effect of N.J.S.A. 17:9A-53.1 was to authorize savings banks for the first time in their history to make Class I loans as defined by N.J.S.A. 17:9A-53(B) (6), that is, personal installment loans unrelated to the borrower's use or improvement of real property. The precise issue before us is the extent to which, if at all, the authorization of N.J.S.A. 17:9A-53.1 applies, by virtue of N.J.S.A. 17:12B-165(5), to savings and loan associations as well as to savings banks.
The question arises as a result of the understanding by Suburban Savings and Loan Association (Suburban) that the full scope of the authorization of N.J.S.A. 17:9A-53.1 was applicable to savings and loan associations. It accordingly, shortly after the April 7, 1975 effective date of that provision, corresponded with the New Jersey Commissioner of Banking seeking his confirmation of that construction of the enactment and advising of its intention to commence making consumer installment loans as of November 1, 1975. The New Jersey Bankers Association (Bankers), a voluntary association representing the financial interests of the commercial banks in this State, learning of Suburban's intention, also communicated with the Commissioner in order to attempt to persuade him that N.J.S.A. 17:9A-53.1 was not intended by the Legislature to permit savings and loan associations as well as savings banks to compete freely with commercial banks in respect of consumer installment loans. The Commissioner requested an opinion from the Attorney General which, apparently, was not immediately forthcoming, and Suburban did in fact start its consumer installment loan activity as scheduled and at rates generally lower than those charged by commercial banks for similar services.
On August 17, 1976 the Acting Commissioner of Banking dispatched the following letter to Suburban:
We have just been advised by the Office of the Attorney General that a savings and loan association "may invest in but * * * may not make installment loans pursuant to the provisions of N.J.S.A. 17:12B-165(5)."
Therefore, pursuant to N.J.S.A. 17:2B-178 [17:12B-178], you are hereby instructed to immediately cease advertising and making installment loans pursuant to the provisions of N.J.S.A. 17:12B-165(5).
This advisory, as well as the cease and desist instruction, was confirmed by the Commissioner ...