6.1-60.1 - (Repealed effective October 1, 2010) Acquisition of or loans on own stock; other investments or loans.
§ 6.1-60.1. (Repealed effective October 1, 2010) Acquisition of or loans onown stock; other investments or loans.
A. No bank shall acquire or own its own stock except to protect itselfagainst loss from debts previously contracted, in which case it shall bedisposed of within twelve months from the time acquired, and except as hereinpermitted. No bank shall make loans collaterally secured by the stock of suchbank, except that nothing in this section shall affect the validity of anysuch security agreement between the bank and its borrower. No bank shallinvest any of its funds in shares of stock of any other corporation, in anysecurity of a limited liability company or in any notes or other obligationssecured by real estate on which as security it is prohibited by § 6.1-63 frommaking any loans. This provision shall not prevent any bank:
1. From acquiring any such stock, notes or other obligations to protectitself or any fund in its custody or possession against loss from debtstheretofore contracted;
2. From acquiring, owning and holding stock of a building corporation orsecurity of a limited liability company of the character and to the amountprovided by § 6.1-57;
3. From acquiring, owning and holding stock of an agricultural creditcorporation organized under the laws of this Commonwealth, provided that thetotal amount of such stock shall not exceed twenty percent of the amount ofthe capital stock of such bank actually paid in and unimpaired, plus theamount of its unimpaired surplus fund;
4. From acquiring, owning and holding stock of the Federal National MortgageAssociation, the Government National Mortgage Association and the FederalHome Loan Mortgage Corporation;
5. From acquiring, holding and owning stock in any corporations or securitiesof limited liability companies which have as their purpose the operation ofparking lots or parking garages, provided that no bank shall own, at any onetime, stock in such corporations exceeding two percent of the amount of thecapital stock of such bank actually paid in and unimpaired, plus the amountof its unimpaired surplus fund;
6. From acquiring, owning and holding stock of a small business investmentcompany as defined by the Federal Small Business Investment Act of 1958;
7. From acquiring, owning and holding stock of an industrial developmentcompany organized under the provisions of the Virginia Industrial DevelopmentCorporation Act (§ 13.1-981 et seq.);
8. From acquiring, owning and holding stock of a bank service corporation orsecurity of a controlled subsidiary corporation, subject to § 6.1-58 or §6.1-58.1, or from investing in a limited liability company, provided suchinvestment conforms to § 6.1-58 or § 6.1-58.1;
9. From acquiring, owning and holding stock of the Student Loan MarketingAssociation, a corporation organized under the Higher Education Act of 1965,as amended;
10. From acquiring, owning and holding stock of a "clearing corporation" asdefined in § 8.8A-102;
11. From acquiring, owning and holding stock of a trust subsidiary as definedin § 6.1-32.1 et seq.;
12. From investing up to four percent of its capital and surplus, includingundivided profits, in shares of any bankers' bank organized under § 6.1-6.1or in any bank holding company wherein the ownership of shares in such bankholding company is restricted to (i) financial institutions which have or areeligible for insurance of deposits by a federal agency or (ii) a financialinstitution holding company as defined in § 6.1-381 or a savings institutionholding company as defined in § 6.1-194.87;
13. From acquiring its own stock, with the book value of all such stock heldnot to exceed in the aggregate five percent of the book value of all sharesissued and outstanding, including capital, surplus and undivided profits asof the time of the purchase being made. In computing such capital surplus andundivided profits for purposes of this section, amounts received for resaleof any repurchased stock shall be added back to capital, surplus andundivided profits for purposes of computation of the five percent criterion.Such purchase may be without the written consent of the State CorporationCommission, unless the Commission or Commissioner has previously notified thebank in writing that it may not utilize this subdivision, until furthernotice. The Commission may further allow purchases of such stock in excess ofsuch five percent criterion where the Commission finds that such purchasewill not impair the safety and solvency of the bank and is otherwiseappropriate and may require the divestiture of any shares held if deemednecessary and appropriate;
14. From acquiring, owning and holding, subject to such conditions as theCommissioner may prescribe, shares of investment companies;
15. From acquiring, owning and holding, subject to such conditions as theCommissioner may prescribe, shares of stock in a community developmentcorporation;
16. From acquiring, owning and holding shares of the Federal AgriculturalMortgage Corporation; nor
17. From acquiring, owning and holding shares of a Federal Home Loan Bank.
B. The provisions of this section shall not be construed to require a bank todispose of any preferred stocks lawfully acquired as an investment prior toJanuary 1, 1940.
(1982, c. 185; 1985, c. 339; 1986, c. 269; 1987, c. 297; 1988, c. 464; 1989,cc. 377, 650; 1992, c. 366; 1993, c. 186; 1994, c. 119; 1996, c. 27.)