Loans by bank on its own stock

12 U.S.C. § 83

• Title: 12 — Banks and Banking
• Chapter: SUBCHAPTER IV—REGULATION OF THE BANKING BUSINESS; POWERS AND DUTIES OF NATIONAL BANKS

Text

(a) General prohibition
No national bank shall make any loan or discount on the security of the shares of its own capital stock.
(b) Exclusion
For purposes of this section, a national bank shall not be deemed to be making a loan or discount on the security of the shares of its own capital stock if it acquires the stock to prevent loss upon a debt previously contracted for in good faith.

History

(R.S. §5201; Pub. L. 106–569, title XII, §1207(a), Dec. 27, 2000, 114 Stat. 3034.)

Editorial Notes

Editorial Notes

Codification
R.S. §5201 derived from act June 3, 1864, ch. 106, §35, 13 Stat. 110, which was the National Bank Act. See section 38 of this title.

Amendments
2000—Pub. L. 106–569 amended section catchline and text generally. Prior to amendment, text read as follows: "No association shall make any loan or discount on the security of the shares of its own capital stock, nor be the purchaser or holder of any such shares, unless such security or purchase shall be necessary to prevent loss upon a debt previously contracted in good faith; and stock so purchased or acquired shall, within six months from the time of its purchase, be sold or disposed of at public or private sale; or, in default thereof, a receiver may be appointed to close up the business of the association, according to section 192 of this title."