Section 18018.6 Of Article 1. Definitions From California Financial Code >> Division 7. >> Chapter 1. >> Article 1.
18018.6
. "Subordinated notes and debentures," as used in this
division, means an obligation other than an investment certificate
obligation that:
(a) Bears on its face, in boldface type no smaller than the
largest size type used in the obligation, the following: "this
obligation is not a deposit and is not insured by the Federal Deposit
Insurance Corporation."
(b) (1) Has a maturity of at least seven years, or (2) in the case
of an obligation or issue that provides for scheduled repayments of
principal, has an average maturity of at least seven years; however,
the commissioner may permit the issuance of an obligation or issue
with a shorter maturity or average maturity if the commissioner has
determined that exigent circumstances require the issuance of that
obligation or issue. This subdivision shall not apply to mandatory
convertible obligations or issues.
(c) States expressly that the obligation is subordinated and
junior in right of payment to the issuing industrial loan company's
obligations to its investment certificate holders and to the
industrial loan company's other obligations to its general and
secured creditors, and is ineligible as collateral for a loan by the
issuing industrial loan company.
(d) Is unsecured.
(e) States expressly that the issuing industrial loan company may
not retire any part of its obligation without the prior written
consent of the commissioner.
(f) Includes, if the obligation is issued to a depository
institution, a specific waiver of the right of offset by the lending
depository institution.