§ 33-37-410 — Who may become members, stockholders or bondholders.

In addition to other persons and notwithstanding any provision of general or special law or any provision in their respective charters, agreements of association, articles of organization, or trust indentures: (1) All domestic corporations organized for the purpose of carrying on business within this State, including without implied limitation, public utility companies and insurance and casualty companies, foreign corporations licensed to do business in the State, and all trusts, may acquire, purchase, hold, sell, assign, transfer, mortgage, pledge, or otherwise dispose of bonds, securities, or other evidences of indebtedness created by or the shares of the capital stock of the corporation and while owners of the stock may exercise all the rights, powers, and privileges of ownership, including the right to vote on it, all without the approval of a regulatory authority of the State. (2) All financial institutions may become members of the corporation and make loans to the corporation as provided in this chapter. (3) A financial institution which does not become a member of the corporation may not acquire any shares of the capital stock of the corporation. In the event a nonmember financial institution becomes an owner of shares in the corporation but does not become a member, these shares shall automatically become nonvoting shares and may not be considered for the purpose of determining a quorum. (4) Each financial institution which becomes a member of the corporation may acquire, purchase, hold, sell, assign, transfer, mortgage, pledge, or otherwise dispose of bonds, securities, or other evidences of indebtedness created by or the shares of the capital stock of the corporation and while owners of the stock may exercise all the rights, powers, and privileges of ownership, including the right to vote on it, all without the approval of a regulatory authority of the State. The amount of the capital stock of the corporation which may be acquired by a member pursuant to the authority granted in this section may not exceed five percent of the capital and surplus of the member. The amount of capital stock of the corporation which a member may acquire pursuant to the authority granted in this section is in addition to the amount of capital stock in corporations which the member otherwise is authorized to acquire. A shareholder may acquire or hold more than ten percent of the outstanding shares of the corporation, however all shares in excess of ten percent automatically become nonvoting shares.

Legislative History

HISTORY: 1962 Code SECTION 12-1141; 1958 (50) 1886; 1995 Act No. 123, SECTION 2; 2015 Act No. 60 (S.389), SECTION 1, eff June 4, 2015. Effect of Amendment 2015 Act No. 60, SECTION 1, in (1), inserted a comma following "limitation"; in (3), added the second sentence, relating to nonmember financial institution owning of shares; and in (4), added the last sentence, relating to holding more than 10 percent of outstanding shares.