HARRY HUGHES, Governor

191

As to the minimum par value of capital stock, see
§ 3-202(b)(7) of this title.

3-303. LOANS FOR STOCK SUBSCRIPTION.

A COMMERCIAL BANK MAY NOT MAKE ANY LOAN THE PROCEEDS OF
WHICH ARE TO BE USED TO PAY FOR ANY PART OF A SUBSCRIPTION
TO ITS CAPITAL STOCK UNLESS THE LOAN IS SECURED ADEQUATELY
BY OTHER COLLATERAL.

REVISOR'S NOTE: This section is new language derived
without substantive change from Art. 11, § 81.

In this section, the term "commercial bank",
which is defined in § 1—101 of this article, is
substituted for references to a "bank or trust
company". Although the last sentence of present
Art. 11, § 81 defines "bank" to include "savings
institutions having a capital stock", that
sentence is deleted as obsolete. See revisor's
note to § 4-401 of this article.

The term "capital stock" is defined in § 3-101 of
this title.

3-304. LOANS ON AND ACQUISITIONS OF OWN STOCK PROHIBITED.

(A)   GENERAL RULE.

EXCEPT AS NECESSARY TO PREVENT A LOSS ON A LOAN
PREVIOUSLY MADE IN GOOD FAITH, A COMMERCIAL BANK NAY NOT:

(1)   MAKE ANY LOAN SECURED BY ANY OF ITS
OUTSTANDING CAPITAL STOCK; OR

(2)   BUY OR HOLD ANY OF ITS OUTSTANDING CAPITAL
STOCK.

(B)   REQUIRED DISPOSITION.

IF A COMMERCIAL BANK BUYS OR HOLDS ANY OF ITS
OUTSTANDING CAPITAL STOCK, THE COMMERCIAL BANK SHALL SELL
THE STOCK AT PUBLIC OR PRIVATE SALE WITHIN:

(1)   1 YEAR AFTER THE DATE OF ACQUISITION; OR

(2)   ANY LONGER PERIOD THAT THE BANK COMMISSIONER
AUTHORIZES.

REVISOR'S NOTE: This section is new language derived
without substantive change from Art. 11, § 80.

Throughout this section, the term "commercial
bank", which is defined in § 1—101 of this
article, is substituted for references to a "bank
or trust company". Although the last sentence of
present Art. 11, § 80 defines "bank" to include