(a) Investment in bank premises. No 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 unless—
(1) the bank notifies the appropriate Reserve
Bank at least 15 days prior to such investment and has not received
notice that the investment is subject to further review by the end
of the 15-day notice period;
(2) 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 (as defined
in section 2 of the Banking Act of 1933, as amended, 12 USC 221a),
is less than or equal to the bank’s perpetual preferred stock and
related surplus plus common stock plus surplus, as those terms are
defined in the FFIEC Consolidated Reports of Condition and Income;
or
(3) (i) 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 150 percent of the bank’s perpetual preferred
stock and related surplus plus common stock plus surplus, as those
terms are defined in the FFIEC Consolidated Reports of Condition and
Income; and
(ii)
the bank—
(A) has a CAMELS composite rating
of 1 or 2
under the Uniform Interagency Bank Rating System
5 (or
an equivalent rating under a comparable rating system) as of the most
recent examination of the bank; and
(B) is well capitalized and will continue
to be well capitalized, in accordance with subpart D of this part,
after the investment or loan.
3-202
(b) Investments in securities. Member banks are subject to the same limitations and conditions
with respect to purchasing, selling, underwriting, and holding investment
securities and stocks as are national banks under 12 U.S.C. 24, paragraph
seventh. To determine whether an obligation qualifies as an investment
security for the purposes of 12 U.S.C. 24, paragraph seventh, and
to calculate the limits with respect to the purchase of such obligations,
a state member bank may look to part 1 of the rules of the Comptroller
of the Currency (12 CFR 1) and interpretations thereunder. A state
member bank may consult the Board for a determination with respect
to the application of 12 U.S.C. 24, paragraph seventh, with respect
to issues not addressed in 12 CFR 1. The provisions of 12 CFR 1 do
not provide authority for a state member bank to purchase securities
of a type or amount that the bank is not authorized to purchase under
applicable state law.
