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SECTION 97
Power to purchase securities and stocks
Banking (BNK) CHAPTER 2, ARTICLE 3
§ 97. Power to purchase securities and stocks. Subject to the
restrictions and limitations contained in this chapter, a bank or trust
company may invest in and have and exercise all rights of ownership with
respect to:

1. Bonds, notes, debentures and other obligations for payment of
money, which are not in default as to either principal or interest when
acquired.

2. Stocks of any city, county, town or village of this state which are
not in default as to either principal or interest when acquired.

3. Stock of a federal reserve bank in the amount necessary to qualify
for membership in such reserve bank.

4. Stock of each of the following to an amount not in excess of ten
per centum of the capital stock, surplus fund and undivided profits of
such bank or trust company:

(a) Any safe deposit company which does business on premises owned or
leased by the bank or trust company or the vaults of which are connected
with or adjacent to an office of such bank or trust company; provided
that the purchase and holding of such stock is first duly authorized by
resolution of the board of directors of the bank or trust company and by
written approval of the superintendent, stating the number and amount of
the shares which may be so purchased and held, excepting that the bank
or trust company may, without the written approval of the
superintendent, acquire the stock owned by a former director of the safe
deposit company at the time that he ceased to be a director. The bank or
trust company may not pay, without the prior written approval of the
superintendent, more for such stock than the cost thereof to the
director.

(b) Any investment company qualified to exercise the powers specified
in subdivision two of section five hundred eight of this chapter;

(c) The Bank for International Settlements.

4-a. Subject to such restrictions as the superintendent of financial
services may prescribe, stock or other equity investments in subsidiary
corporations, partnerships, unincorporated associations, limited
liability companies, or other entities engaged in, or to be organized to
engage in the following activities:

(a) To acquire and lease personal property under the same terms and
conditions as provided in subdivision twelve of section ninety-six of
this article;

(b) To purchase accounts receivable as provided in subdivision one of
section ninety-six of this article;

(c) To be a corporation organized pursuant to the provisions of
section twenty-five (a) of an act of congress entitled the "Federal
Reserve Act";

(d) To own or operate real or personal property acquired through
foreclosure or in settlement or reduction of debts due it;

(e) To own or operate real or personal property for use as bank
premises; or

(f) To transact any other business in which the bank or trust company
may engage directly.

4-b. Common or preferred stock of any corporation created or existing
under the laws of the United States or of any state, district or
territory thereof, or of the commonwealth of Puerto Rico, provided that:
(a) such common or preferred stock is registered on a national
securities exchange, as provided in an act of congress of the United
States entitled the "Securities Exchange Act of 1934", approved June
sixth, nineteen hundred thirty-four, as amended, or such other exchange
or market system as the superintendent shall approve by regulation; (b)
the aggregate amount of all investments in common and preferred stock as
permitted by this subdivision shall at no time exceed two percent of the
assets or twenty percent of the capital, surplus and undivided profits
of the bank or trust company, whichever is less, provided however that
the superintendent may, upon the request of a bank or trust company,
approve an increase in such aggregate amount to a maximum of five
percent of the assets or one hundred percent of the capital, surplus and
undivided profits of such bank or trust company, whichever is less,
subject to any limitations or conditions prescribed by the
superintendent; (c) the aggregate amount of all investments in the
common and preferred stock of any one issuer pursuant to this
subdivision, together with the aggregate amount of all investments in
the bonds, debentures, notes or other obligations of such issuer made
pursuant to paragraph (i) of subdivision one of section one hundred
three of this chapter, shall at no time exceed one percent of the assets
or fifteen percent of the capital, surplus and undivided profits of the
bank or trust company, whichever is less; and (d) no bank or trust
company shall at any time hold pursuant to this subdivision more than
two percent of the total issued and outstanding shares of stock of any
one issuer.

4-c. Subject to such restrictions as the superintendent of financial
services may prescribe, stock or other equity interest in one or more
small business investment companies, as authorized pursuant to the
provisions of an act of congress entitled "Small Business Investment Act
of 1958," as amended, or in any entity established to invest solely in
such small business investment companies, except that in no event shall
the total amount of such investments exceed five percent of the capital
stock, surplus fund and undivided profits of such bank or trust company.

5. So much of the capital stock of, or any other equity interest in,
any other corporations, partnerships, unincorporated associations,
limited liability companies, or other entities as may be specifically
authorized by the laws of this state or by the superintendent, or
regulations promulgated by the superintendent.

The superintendent is authorized to adopt such rules and regulations
as shall permit banks and trust companies to make a loan which provides
for receipt of shares of stock of or any other equity interest in, or a
share of the profits, income or earnings of, a borrower in consideration
for making the loan.

A bank or trust company may acquire stock or any other equity interest
in settlement or reduction of a loan, or advance of credit or in
exchange for an investment previously made in good faith and in the
ordinary course of business, where such acquisition of stock or any
other equity interest is necessary in order to minimize or avoid loss in
connection with any such loan, advance of credit or investment
previously made in good faith. A trust company may acquire stock or any
other equity interest from any estate, trust or fund with respect to
which such trust company is acting in a fiduciary capacity, if a claim
is asserted or may be asserted against it with respect to the purchase
or retention of such stock or equity interest for such estate, trust or
fund, (a) where such acquisition by the trust company has been
authorized or directed by a court, or (b) where such trust company has
been advised by its counsel in writing that it has incurred a contingent
or potential liability with respect to the purchase or retention of such
stock or equity interest and such trust company desires to relieve
itself from such liability. Stocks or any other equity interest acquired
pursuant to the provisions of this paragraph may be held for such period
as the board of directors deems advisable.

A bank or trust company may continue to hold any bonds or other
securities or stock which it holds in accordance with the provisions of
law at the time this act takes effect.

No bank or trust company shall purchase, acquire, or hold any stock
of, or any other equity interest in, any corporation or any other
entity, except as provided in this section.