Article 2. Loan And Investment Limitations of California Financial Code >> Division 1.1. >> Chapter 14. >> Article 2.

(a) In this article and in Article 4 (commencing with Section 1710) of Chapter 19, "affiliate," when used with respect to a specified person, means any person controlling, controlled by, or under common control with, the specified person, directly or indirectly, through one or more intermediaries.
  (b) "Control" has the meaning set forth in Section 1250.
  (c) "Regulated corporation" means any corporation or limited liability company or similar entity in which a bank makes an equity investment and which the bank controls.
  (d) "Securities issued by a person" means any debt, equity, or other security issued by a person, and any and all affiliates of that person, issued for the benefit of that person or for the benefit of an affiliate of that person.

(a) Subject to the limitations and exceptions in Sections 1481 and 1510, a bank may hold both obligations made by a person, and securities issued by that same person.
  (b) The total amount of obligations and securities held by a bank pursuant to subdivision (a) shall not exceed 25 percent of the sum of the shareholders' equity, allowance for loan and lease losses, capital notes and debentures of the bank.

Subject to prior approval by the commissioner and to any limitations the commissioner may impose, the limitations in Sections 1471, 1481, and 1510 shall not apply to loans made by a bank to, and the bank's investments in securities of, its regulated corporations.

Sections 1481 and 1510 shall not apply to investments held by a bank prior to January 1, 2009. All authorizations regarding investments by a bank issued by the commissioner prior to January 1, 2009, are terminated.