12 U.S.C. § 371d — Investment in bank premises or stock of corporation holding premises
submitted 113 years ago by ch. 6 to r/title-12-BANKS-AND-BANKING · 303 words · no verdicts yet
National banks and state member banks need approval before investing in bank premises or the company that holds them. The total invested is capped, usually at the bank's capital, unless the bank meets stricter safety tests that raise the cap.
(a) Conditions of investment. A national bank or state* member bank can't invest in its own bank premises, or in the stock or debt of a corporation that holds those premises, or lend to or on the security of such a corporation, unless it meets one of three rules. (1) The bank must first get approval — from the Comptroller of the Currency for a national bank, or from the Board for a state member bank. (2) One path: the total of all these investments and loans, plus any debt of that corporation that counts as the bank's affiliate, must be no more than the bank's capital stock. (3) The other path: (A) that same total must be no more than 150% of the bank's capital and surplus, and (B) the bank must (i) have a CAMEL composite rating of 1 or 2 (a bank-safety rating) at its most recent exam, (ii) be "well capitalized" both now and after making the investment or loan, and (iii) notify the Comptroller (national banks) or the Board (state member banks) within 30 days after making the investment or loan.
(b) Definitions. (1) "Affiliate" has the same meaning given in section 221a of this title. (2) "Well capitalized" has the same meaning given in section 1831o(b) of this title.
No national bank 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—
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);
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
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 150 percent of the capital and surplus of the bank; and
the bank—
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;
is well capitalized and will continue to be well capitalized after the investment or loan; and
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.
For purposes of this section—
the term “affiliate” has the same meaning as in section 221a of this title; and
the term “well capitalized” has the same meaning as in section 1831o(b) of this title.
Source credit: (Dec. 23, 1913, ch. 6, § 24A, as added June 16, 1933, ch. 89, § 14, 48 Stat. 184; amended Aug. 23, 1935, ch. 614, title II, § 203(a), 49 Stat. 704; June 30, 1954, ch. 434, § 2, 68 Stat. 358; Pub. L. 104–208, div. A, title II, § 2206, Sept. 30, 1996, 110 Stat. 3009–405.)
- 1913Enacted · Act of Dec. 23, 1913, ch. 6 · 48 Stat. 184
- 1935Amended · Act of Aug. 23, 1935, ch. 614 · 49 Stat. 704
- 1954Amended · Act of June 30, 1954, ch. 434 · 68 Stat. 358
- 1996Amended · Pub. L. 104-208 · 110 Stat. 3009
A history note hasn’t been published yet. The record shows enactment by ch. 6 on 1913-12-23.
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