State Codes and Statutes

State Codes and Statutes

Statutes > North-carolina > Chapter_53 > GS_53-47

§53‑47.  Limitations on investment in stocks.

(a)        In addition to anypowers or investments authorized by any other section of this Chapter, a bankmay invest in the capital stock or other securities of any other state,national or foreign bank or trust company, and in any other industrial bank,savings bank, Morris Plan bank, savings and loan association, bankers'  bank orother deposit taking entity chartered or existing under any federal, state, orforeign law including, but not limited to, the capital stock of clearingcorporations defined in G.S. 25‑8‑102, the capital stock or othersecurities of central reserve banks whose capital stock exceeds one milliondollars ($1,000,000) and the capital stock of an Edge or Agreement corporation.As used in this Chapter, the term "bankers' bank" means an insureddepository financial institution, organized and chartered to do businessexclusively with other banks and savings institutions, and the stock of which,or the stock of the holding company which controls such bank, is ownedexclusively (except to the extent directors' qualifying shares are required bylaw) by banks or savings institutions. To constitute a central reserve bank ascontemplated by this Chapter, at least fifty percent (50%) of the capital stockof such bank shall be owned by other banks. The investment of any bank in thecapital stock of such central reserve bank or bank organized under the"Edge Act", (12 U.S.C. § 611 et seq.) shall at no time exceed tenpercent (10%) of the paid‑in capital and permanent surplus of the bankmaking the investment.

(b)        A bank may invest,without limitation, in a corporation, firm, partnership, or company:

(1)        Which is a bankoperating subsidiary, or

(2)        To protect the bankfrom loss.

(c)        In addition to theforegoing, upon 30 days prior written notice to the Commissioner of Banks,providing such detail as the Commissioner may require, a bank may invest, inthe aggregate, up to seventy‑five percent (75%) of its unimpaired capitalfund in the stock or assets of other corporations, firms, partnerships, orcompanies which are:

(1)        Primarily engagingin activities permissible for national banks or bank holding companies underapplicable laws, rules, regulations or orders;

(2)        Primarily engagingin activities of a financial nature, including the transmission or processingof information or data relating to such activities. For the purpose of thissubsection, activities of a financial nature shall include, but not be limitedto, all forms of securities activities, including underwriting, distribution,and brokerage, together with such other activities as the Commissioner of Banksshall determine by regulation or order;

(3)        Engaging in anyother activity approved by the Commissioner of Banks.

(d)        Any state ornational bank subsidiary which engages in an activity subject to licensureand/or regulation under other than Chapter 53 of the General Statutes shall besubject to licensure and/or regulation on a basis that does not arbitrarilydiscriminate by the appropriate regulatory agency which licenses and/orregulates nonbanks which engage in the same activity.

(e)        Unless otherwisenotified by the Commissioner within 30 days following receipt of the writtennotice, a bank may complete its investment in the stock or assets of the othercorporation, firm, partnership, or company, or commence a new activity throughan existing subsidiary. The Commissioner may extend the 30‑day period ifthe Commissioner determines that the proposed investment or activity raisesissues which require additional information or additional time for analysis. Ifthe 30‑day period is extended, the bank may proceed with respect to theproposed investment or activity only upon written approval of the Commissionerof Banks.

(f)         The Commissionerof Banks shall monitor the impact of investment activities of banks under thissection on the safety and soundness of such banks. Any stocks owned orhereafter acquired in excess of the limitations herein imposed shall bedisposed of at public or private sale within six months after the date ofacquiring the stocks, and if not so disposed of, they shall be charged toprofit and loss account, and no longer carried on the books as an asset. Thelimit of time in which said stocks shall be disposed of or charged off thebooks of the bank may be extended by the Commissioner of Banks if in theCommissioner's judgment it is for the best interest of the bank that suchextension be granted; provided that the limitations imposed in this section onthe ownership of stock in or securities of corporations are suspended only tothe extent that any bank operating under the supervision of the Commissioner ofBanks may subscribe for and purchase shares of stock in or debentures, bonds,or other types of securities of any corporation organized under the laws of theUnited States for the purposes of insuring to depositors a part or all of theirfunds on deposit in banks where and to such extent as such stock or securityownership is required in order to obtain the benefits of such deposit insurancefor its depositors. (1921, c. 4, s. 28; C.S., s. 220(c); 1931, c. 243, s.5; 1935, c. 81, s. 3; 1973, c. 497, s. 7; 1983, c. 214, s. 3; 1991, c. 677, s.2; 1995, c. 417, s. 1; 1997‑181, s. 25.)