State Codes and Statutes

State Codes and Statutes

Statutes > North-carolina > Chapter_53 > GS_53-64

§53‑64.  Loans secured by bank's own stock or stock of parent bank holdingcompany.

(a)        It shall be lawfulfor a bank to make a loan secured by the pledge of its own shares of stock orthe stock of its parent holding company; provided that whenever any bank shallexercise its security interest in the shares of the bank or its parent holdingcompany upon a loan default or other transfer, it shall dispose of all of suchshares of stock within a period of six months. If such stock has not beendisposed of within six months, the same shall be charged to profit and loss andno longer carried as an asset of the bank. The Commissioner may extend the six‑monthperiod not to exceed an additional six months.

(b)        A bank may not makea loan to finance the purchase of or to carry its stock or the stock of itsparent holding company. For purposes of this subsection, the phrase "tocarry" shall have the meaning set forth in 12 C.F.R. Part 221, by theBoard of Governors of the Federal Reserve System.

(c)        A bank may not purchaseany portion of its shares of stock, nor the stock of its parent holdingcompany, unless the same is purchased or pledged to the bank to prevent a lossupon a debt previously contracted in good faith. In the event the bank shallbecome the owner of its shares, or those of its parent holding company, thebank shall dispose of the same as provided in subsection (a) of this section. (1921,c. 4, s. 45; C.S., s. 220(t); 1927, c. 47, s. 9; 1983, c. 214, s. 6; 1995, c.296, s. 1.)