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.