(a) Conditions of investment. No nationalbank or State member bank shall invest in bank premises, or
in the stock, bonds, debentures, or other such obligations of any corporation
holding the premises of such bank, or make loans to or upon the security of
any such corporation—
(1) unless the bank receives the prior approval of the Comptroller of the
Currency (with respect to a national bank) or the Board (with respect to a
State member bank);
(2) unless the aggregate of all such investments and loans, together with
the amount of any indebtedness incurred by any such corporation that is an
affiliate of the bank, is less than or equal to the amount of the capital
stock of such bank; or
(3) unless—
(A) the aggregate of all such investments and loans, together with the
amount of any indebtedness incurred by any such corporation that is an
affiliate of thebank, is less than or equal to 150 percent of the capital and
surplus of the bank; and
(B) the bank—
(i) has a CAMEL composite rating of 1 or 2 under the Uniform Financial
Institutions Rating System (or an equivalent rating under a comparable rating
system) as of the most recent examination of such bank;
(ii) is well capitalized and will continue to be well capitalized after the
investment or loan; and
(iii) provides notification to the Comptroller of the Currency (with respect
to a national bank) or to the Board (with respect to a State member bank) not
later than 30 days after making the investment or
loan.
(b) Definitions. For purposes of this section—
(1) the term “affiliate” has the same meaning as in section 2 of the
Banking Act of 1933; and
(2) the term “well capitalized” has the same meaning as in section 38(b)
of the Federal Deposit Insurance Act.
[12 USC 371d. As added by act of June 16, 1933 (48 Stat. 183);
amended by acts of June 30, 1954 (68 Stat. 358) and Sept. 30, 1996 (110 Stat.
3009-405).]
