A. An association may invest funds as follows:

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1. In an account of any state or federal association, the accounts of which are insured by an insurance corporation.

2. In obligations of or fully guaranteed by the United States, in stock or obligations of federal home loan banks or in stocks or obligations of the federal national mortgage association or other agencies of the United States approved by rule of the deputy director.

3. In any of the following where the aggregate amount invested in all such investments does not exceed twenty percent of the association’s total assets:

(a) Bonds or other direct obligations of or guaranteed as to principal and interest by this state.

(b) Obligations that by the laws of this state are made legal investments for savings and loan associations.

(c) Bonds or other evidences of indebtedness that are direct general obligations of any county, incorporated city or town, school district, improvement district or other political subdivision or municipal corporation of this state and, subject to such rules as the deputy director may adopt, readily marketable corporate debt securities of the type commonly regarded as investment securities that were publicly distributed when issued and that are publicly traded at the time of acquisition by the association and loans or securities, which meet standards of sound lending practices.

4. In certificates of deposit issued by any bank that is a member of the federal deposit insurance corporation, provided that the purchase or renewal of certificates issued by banks that do not have their principal offices in this state are governed by such rules as the deputy director may prescribe.

5. In accordance with this paragraph and any rules of the deputy director, any Arizona association may invest in the capital stock, obligations or other securities of any service corporation, under whatever laws organized, if the entire corporate stock of the service corporation is available for purchase only by savings and loan associations of this state and federal savings and loan associations having their home office in this state, but an association may not make any investment under this section if its aggregate outstanding investment under this section, determined as prescribed by the rules of the deputy director, would exceed six percent of its assets and provided that any investment in excess of five percent of its assets serves primarily community, inner-city or community development purposes. The deputy director shall prescribe rules under this authority to effectuate the intent of section 6-402, subsection B. If a service corporation engages in an activity that is prohibited under this section for a service corporation in which an association may invest, an association having an investment in such a service corporation shall dispose of such an investment promptly unless, within ninety days following notice to such an association, the prohibited activity is discontinued. The service corporation shall file a certified audit as provided in section 6-477, and the deputy director may examine service corporations as provided in section 6-476.

6. With or without security, make loans, advance credit and purchase obligations representing loans and advances of credit for the payment of expenses of community college, college or university education, but no association may have loans under this paragraph, exclusive of any loan that is or that at the time of its making was otherwise authorized, aggregating at any one time more than five percent of its total assets. An association making a loan under this paragraph may require a comaker or comakers, insurance, guaranty under a government student loan guarantee plan or other protection against contingencies. The borrower shall certify to the association that the proceeds of the loan are to be used by a full-time student solely for the payment of expenses of community college, college or university education at an institution that provides an education program for which it awards a bachelor’s degree or provides not less than a two-year program that is acceptable for full credit toward such a degree.

7. Notwithstanding any other provision of this article, but subject to such prohibitions, limitations, conditions and restrictions as the deputy director may prescribe, an association may do any of the following:

(a) Invest in primarily residential real property, including interests in such real property, located within this state.

(b) Acquire, develop and improve such property or interests in the property for primarily residential usage.

(c) Hold, sell or otherwise dispose of, lease, improve and operate any such property or any interest in the property. An association shall not make any investment under this paragraph if its aggregate outstanding investment would exceed ten percent of its assets. For the purposes of this paragraph, "improve" includes any type of improvement other than the construction of residential housing.

8. Subject to chapter 1, article 4 of this title, in any class of capital stock of any bank or savings and loan association, under whatever laws organized, or any corporation which directly or indirectly acting through one or more persons owns or has the power to vote twenty-five percent or more of any class of voting stock of any such bank or savings and loan association.

9. In an amount not exceeding ten percent of the association’s assets, in any other investments not prohibited by rules adopted by the deputy director. No investment made under the authority of this paragraph may be made in a service corporation referred to in paragraph 5 of this subsection. An investment made under the authority of this paragraph may be made or continued for the purpose of creating or acquiring, directly or through any affiliate or subsidiary, any obligation of a purchaser of consumer goods created in the acquisition of such goods or any monetary obligation of a member of the association.

B. Notwithstanding any other provision of law, but except as provided in subsection A, paragraphs 5 and 7 of this section, an association shall have the following powers:

1. To offer and accept savings accounts or other accounts for fixed, minimum or indefinite periods of time or in the form of demand or transaction accounts including overdraft privileges incident thereto to any person or entity.

2. To make, invest in or acquire loans or participating interests in loans, secured or unsecured, of any type and for any purpose to any person or entity.

3. To make, invest in or acquire loans on the security of any residential or nonresidential property interest, of any priority, whether fee or leasehold to any person or entity.

4. To make or acquire loans on the security of, or invest in, commercial paper, securities and other corporate debt obligations of any type.

5. To issue debt or equity securities for cash or other consideration.

6. To acquire, invest in or hold real or personal property for rental or sale, which at the time of such acquisition or investment would not exceed twenty percent of an association’s assets, and to enter into or create lease financing arrangements with respect to such property.

7. To act as trustee, executor, administrator, personal representative, conservator, guardian or custodian, or in any other fiduciary capacity, to offer trust or fiduciary services incident thereto and to receive reasonable compensation therefor.

C. The association in the exercise of such powers provided herein may do so without regard to geographic limitations and on terms and provisions in accordance with this section unless restricted by rules of the deputy director.

D. An association shall not invest in or acquire a loan or a participating interest in a loan originated or acquired by an affiliate or by a subsidiary of a related holding company or companies other than a service corporation qualified as provided in this section. Before making an investment in or acquiring a loan or a participating interest in a loan the association shall evaluate the creditworthiness of the obligor in the same manner as though the association were originating the loan. The association shall document and retain the credit review in the loan file.

E. All of the provisions of this section are subject to section 33-1571.