§ 5009 — Loans or discounts on capital stock

A savings bank may not make a loan or discount on the security of or be the purchaser or holder of the shares of its own capital stock or preferred stock or on the security of its own debentures or evidences of its debt that are convertible to capital stock or are junior or subordinate in rights of payment to deposit or other liabilities of the savings bank, unless the security or purchase shall be necessary to prevent loss on a debt previously contracted in good faith; and the stock or evidence of indebtedness acquired or purchased shall, within 6 months from the time of its acquisition, be sold or disposed of at public or private sale.

Legislative History

(Source: P.A. 86-1213.)