On appeal from the Department of Banking.
Bischoff, Botter and Dwyer. The opinion of the court was delivered by Bischoff, P.J.A.D.
This appeal requires a further consideration of the scope of the investment powers granted savings and loan associations by the Legislature; specifically, whether the power to "invest in or make installment loans" conferred by L.1975, c. 48, § 1, N.J.S.A. 17:9A-53.1 and N.J.S.A. 17:12B-165(5), includes the power to purchase "time sale" contracts or other similar obligations originated by sellers of goods or services, including motor vehicle installment sales.
Appellant Tri-County Savings and Loan Association (hereafter Tri-County) is a small savings and loan association chartered by the State of New Jersey pursuant to the Savings and Loan Act (1963). N.J.S.A. 17:12B-1 et seq. It is under the direct supervisory and regulatory authority of the Commissioner of Banking. Also, because of its membership in the Federal Savings and Loan Insurance Corporation, Tri-County is subject to the supervision of the Federal Home Loan Bank Board.
N.J.S.A. 17:12B-155B grants savings and loan associations the power to:
And N.J.S.A. 17:12B-165(5) provides that savings and loan associations may invest:
In any investment in which savings banks of New Jersey are or shall be authorized to invest by any law of this State, other than investments which are, or which hereafter shall be, specifically designated and regulated by this act . . ..
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. 17A:9A-53.1 to provide:
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.
Interpreting this amendment as granting it broad new powers of investment, Tri-County began making direct installment loans in late 1975 or early 1976. In addition, it prepared to indirectly enter the commercial money market by investing in or purchasing retail security obligations generated by retail sellers in the course of selling their goods and services. Tri-County was specifically interested in the purchase of installment obligations generated by Pennsylvania automobile dealers.
Pursuant to this plan, Tri-County applied for and obtained a license from the Commonwealth of Pennsylvania authorizing it to purchase installment obligations generated by automobile dealers in that state. It also submitted an application to the New Jersey Department of Banking for a license to operate as a sales finance company under the terms of the Retail Installment Sales Act of 1960. N.J.S.A. 17:16C-1 et seq. That act requires any "person" to obtain a license before it may "engage in or continue to engage in the business of a sales finance company," N.J.S.A. 17:16C-2, or, in other words, before it may engage "in the business of acquiring or arranging for the acquisition of retail installment contracts . . . by purchase, discount, pledge or otherwise . . .." N.J.S.A. 17:16C-1(f).
On November 24, 1976 the Acting Commissioner of Banking issued a written decision and order denying Tri-County's application for a license because there was nothing in the Savings and Loan Act (1963) "which would authorize a savings and loan association to engage in the subsequent financing of time ...