GENERAL ASSEMBLY OF NORTH CAROLINA
1995 SESSION
CHAPTER 296
The General Assembly of North Carolina enacts:
Section 1. G.S. 53-64 reads as rewritten:
"§ 53-64. Unlawful
to loan on Loans secured by bank's own stock or stock of parent bank
holding company.
It shall be unlawful for any bank to make any loan secured
by the pledge of its own shares of stock or the stock of its parent bank
holding company, nor shall any bank be the holder as pledgee, or as purchaser,
of any portion of its capital stock or of the capital stock of its parent bank
holding company unless such stock is purchased or pledged to it to prevent loss
upon a debt previously contracted in good faith. Provided, that whenever any
bank shall have shares of its own stock or the stock of its parent bank holding
company sold to, or pledged to it, for the purpose of preventing a loss upon a
debt previously contracted, it shall dispose of all such shares of stock within
a period of six months from the date such stock was sold or pledged to it and
if not so disposed of, the same shall be charged to profit and loss and no
longer carried as an asset of the bank.
(a) It shall be lawful for a bank to make a loan secured by the pledge of its own shares of stock or the stock of its parent holding company; provided that whenever any bank shall exercise its security interest in the shares of the bank or its parent holding company upon a loan default or other transfer, it shall dispose of all of such shares of stock within a period of six months. If such stock has not been disposed of within six months, the same shall be charged to profit and loss and no longer carried as an asset of the bank. The Commissioner may extend the six-month period not to exceed an additional six months.
(b) A bank may not make a loan to finance the purchase of or to carry its stock or the stock of its parent holding company. For purposes of this subsection, the phrase 'to carry' shall have the meaning set forth in 12 C.F.R. Part 221, by the Board of Governors of the Federal Reserve System.
(c) A bank may not purchase any portion of its shares of stock, nor the stock of its parent holding company, unless the same is purchased or pledged to the bank to prevent a loss upon a debt previously contracted in good faith. In the event the bank shall become the owner of its shares, or those of its parent holding company, the bank shall dispose of the same as provided in subsection (a) of this section.”
Sec. 2. This act becomes effective upon ratification.
In the General Assembly read three times and ratified this the 20th day of June, 1995.
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Dennis A. Wicker
President of the Senate
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Harold J. Brubaker
Speaker of the House of Representatives