§ 36a-277 — Social purpose investments.

Connecticut § 36a-277

• Jurisdiction: Connecticut
• Title 36a: The Banking Law of Connecticut
• Ch. 665: Powers, Loans and Investments

Text

(a) In addition to other investments authorized by sections 36a-275, and 36a-276, this section and section 36a-280, any Connecticut bank may purchase or hold for its own account the following securities, without regard to any other liability to the Connecticut bank of the obligor, maker, guarantor or issuer of such securities, provided the total amount of the securities of any one maker, obligor or issuer held by a Connecticut bank or for a Connecticut bank's account may not exceed, at any time, and except as provided in subsection (b) of this section, ten per cent of its capital and surplus: (1) Equity securities, as defined in section 36a-276 , and debt securities, as defined in section 36a-275 , of companies licensed or that have applied to be licensed as “small business investment companies”, under the federal Small Business Investment Act of 1958, 15 USC Section 661 et seq., as from time to time amended, and which qualify as companies financing disadvantaged persons under 15 USC Section 681(d), as from time to time amended; (2) Equity securities, as defined in section 36a-276 , and debt securities, as defined in section 36a-275 , of companies licensed or that have applied to be licensed as “small business investment companies”, under the federal Small Business Investment Act of 1958, 15 USC Section 661 et seq., as from time to time amended; (3) Debt securities issued by corporations certified by the commissioner to be organized and operated solely for the purpose of providing assistance which will contribute to the public welfare by facilitating the acquisition and maintenance of ownership of homes by individuals whose ability to own their own homes is hampered because of social or economic disadvantages, which debt securities are backed by mortgage loans made by the issuing corporations; (4) Shares of stock and debt securities issued by the National Corporation for Housing Partnerships or by any other corporation created pursuant to Title IX of the Housing and Urban Development Act of 1968; limited partnership interests in The National Housing Partnership or in any other limited partnership formed pursuant to Section 907(a) of that act; and any partnership, limited partnership, or joint venture formed pursuant to Section 907(c) of that act; (5) Shares of stock and debt securities of corporations, and equity interests in and debt securities of, partnerships and limited partnerships, engaged solely in acquiring and rehabilitating housing; (6) Debt securities or equity securities of a corporation, all the equity securities of which corporation are to be owned by one or more Connecticut banks and which corporation is organized and operated for the purpose of developing, and stimulating and assisting the development of, by any means and in any capacity, by itself or jointly with others, low and moderate income housing in this state; (7) Debt securities or equity securities of closed-end investment companies which provide capital to racial or ethnic minority-owned businesses and institutions; (8) Debt securities or equity securities of development corporations or similar organizations organized to promote the business prosperity and economic welfare of this state and to encourage the location and development of new business, industry and commerce at least in part within the municipality where the main office or a branch of such bank is located; and (9) Debt securities or equity securities that are social purpose investments, provided before making any such investment, the bank shall obtain the certification of the commissioner that the investment is a social purpose investment. For purposes of this section, a “social purpose investment” means an investment which contributes to the public welfare by facilitating the provision of a service or facility needed by residents of the area in which an office of the bank making the investment is located. (b) (1) Not later than January 1, 2024, a Connecticut bank may, provided the Connecticut bank notifies the commissioner of such election, in writing, not later than said date, elect to use equity capital and adjusted allowances for credit losses, instead of capital and surplus, for the purpose of calculating the limitation established in subsection (a) of this section on the total amount of the securities of any one maker, obligor or issuer held by a Connecticut bank or for a Connecticut bank's account. (2) Any Connecticut bank that makes the election as provided in subdivision (1) of this subsection may subsequently elect, provided such Connecticut bank notifies the commissioner, in writing, that such Connecticut bank has made such subsequent election, to use capital and surplus, instead of equity capital and adjusted allowances for credit losses, for the purpose of calculating the limitation established in subsection (a) of this section on the total amount of the securities of any one maker, obligor or issuer held by a Connecticut bank or for a Connecticut bank's account.

Legislative History

(P.A. 94-122, S. 126, 340; P.A. 95-70, S. 5, 8; P.A. 96-44, S. 6; P.A. 97-35, S. 2; P.A. 99-7; P.A. 23-126, S. 22.) History: P.A. 94-122 effective January 1, 1995; P.A. 95-70 amended Subdiv. (1) by changing “minority enterprise small business investment companies” to “small business investment companies”, effective May 31, 1995; P.A. 96-44 rewrote section re bank investments, inserted new Subdiv. (2) re investments in “small business investments companies”, deleted population minimum in Subdiv. (5), and inserted “debt securities or equity securities” in several locations; P.A. 97-35 deleted former Subdiv. (7) re investment in small business investment companies and renumbered former Subdivs. (8), (9) and (10) as Subdivs. (7), (8) and (9); P.A. 99-7 amended Subdivs. (1) and (2) by changing “shares of stock” to “equity securities”, adding definition references and making provisions applicable to equity securities of companies that have applied to be licensed as small business investment companies; P.A. 23-126 designated existing introductory provision as Subsec. (a), redesignated existing Subdivs. (1) to (9) as Subsec. (a)(1) to (a)(9), added reference to exception provided in Subsec. (b) in Subsec. (a), replaced reference to “equity capital and reserves for loan and lease losses” with reference to “capital and surplus” in Subsec. (a) and added Subsec. (b)(1) re Connecticut bank may elect to use equity capital and adjusted allowances for credit losses for certain purpose and Subsec. (b)(2) re Connecticut bank that makes such election may subsequently elect to use capital and surplus for certain purpose.