HARRY HUGHES, Governor

3335

CHAPTER 711

(House Bill 1589)

AN ACT concerning

Commercial Banks - Qualifications of Directors

FOR the purpose of clarifying the method for determining the
amount of capital stock which a bank director must own in
order to qualify as a director of that bank.

BY repealing and reenacting, with amendments,

Article - Financial Institutions
Section 3-403(a)
Annotated Code of Maryland
(1980 Volume and 1983 Supplement)

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That the Laws of Maryland read as follows:

Article - Financial Institutions

3-403.

(a) (1) After the initial issuance of capital stock by a
commercial bank, each of its directors shall own in good faith
and of record unencumbered shares of the capital stock of:

(i) The commercial bank; or

(ii) A corporation that owns more than 80
percent of the capital stock of the commercial bank.

(2)  The unencumbered capital stock owned by the
director shall be in the amount of at least:

(i) $500; or

(ii) $250, if the commercial bank is a State
bank that has $50,000 or less in capital stock.

(3)  To determine the amount of capital stock owned by
a director:

(i) [Only the par or stated value of common and
preferred stock may be considered] BASED ON THE VALUE OF THE
STOCK ON THE DATE OF PURCHASE OR ON THE DATE THE DIRECTOR TOOK
OFFICE, WHICHEVER IS GREATER, ANY 1 OR MORE OF THE FOLLOWING MAY
BE CONSIDERED: