6.1-80 - (Repealed effective October 1, 2010) Preferences; exceptions for certain borrowings and for repurchase agreements.
§ 6.1-80. (Repealed effective October 1, 2010) Preferences; exceptions forcertain borrowings and for repurchase agreements.
Notwithstanding the provisions of § 6.1-78, any bank is authorized:
1. To pledge its assets as security for amounts of borrowed money which shallnot, without the approval of the State Corporation Commission given inadvance in writing, exceed in the aggregate the amount of the capital,surplus and undivided profits of such bank actually paid in or earned andremaining undiminished by losses or otherwise. The amount of assets pledgedfor the security of such a loan shall not without such approval, so given,exceed 150 percent of the amount borrowed. No loan in excess of the amount sopermitted made to any such bank shall be invalid or illegal as to the lender,even though made without the consent of the Commission. Rediscounting with orwithout guarantee or endorsement of notes, drafts, bills of exchange or loansis hereby authorized and shall not be limited by the terms of this section,and shall not be considered as borrowed money within the meaning of thissection;
2. To borrow from a Federal Reserve Bank or a Federal Home Loan Bank and torediscount with and sell to a Federal Reserve Bank or a Federal Home LoanBank any and all notes, drafts, bills of exchange, acceptances and othersecurities, and to give security for all money so borrowed and for allliabilities incurred by the discount of such notes, drafts, bills of exchangeand other securities without restriction in like manner and to the sameextent as national banks may lawfully do under the acts of Congress andregulations of the Board of Governors of the Federal Reserve System and theFederal Housing Finance Board; and
3. To pledge its assets in connection with qualified financial contracts,which transactions shall be governed by this subdivision and not subdivision1 of this section. The amount of assets pledged for obligations under suchcontracts shall not exceed 150 percent of the amount of the obligations,without the consent of the Commission, and the qualified financial contractshall be in writing and approved by the board of directors of such bank or anappropriate committee, which approval shall be reflected in the minutes ofsuch board or committee. At the time any qualified financial contractsconsisting of retail repurchase agreements are sold by a state bank, themarket value of the underlying security must be at least equal to the amountof the aggregate purchase price paid by the purchasers of the retailrepurchase agreements. "Qualified financial contract" means a qualifiedfinancial contract as defined in 12 U.S.C. § 1821 (e) (8) (D) (i), as thesame may be amended, and any contract or transaction that the Commissionerdetermines to be a qualified financial contract for purposes of this section.
(Code 1950, § 6-66; 1966, c. 584; 1982, c. 411; 1989, c. 376; 1993, c. 182;1994, c. 7; 1996, c. 306.)