ORS 708A.120
Investment in stock of other entity

  • rules

(1)

An institution may not invest any of the institution’s assets in the capital stock of any other corporation or in a membership interest in any limited liability company, except:

(a)

In the capital stock of the Federal Reserve Bank.

(b)

In stock or a membership interest the institution acquired or purchased to save a loss on a preexisting debt. The institution shall sell the stock or membership interest within two years of the date the institution acquired or purchased the stock or membership interest. The Director of the Department of Consumer and Business Services may extend the time if the director finds that an extension will not be detrimental to the public interest and will not contravene any other law.

(c)

In the capital stock or a membership interest of any safe deposit company that does an exclusive safe deposit business on premises the institution owns or leases upon 30 days’ advance notice to the director subject to the same limitations applicable to a national bank.

(d)

In the capital stock or a membership interest of an agricultural and livestock finance company, subject to the same limitations applicable to national banks and to the approval of the director.

(e)

In the capital stock or a membership interest, eligible for purchase by national banks, of a small business investment company, but the aggregate investment in the stock or membership interest may not exceed two percent of the institution’s capital.

(f)

In the common stock of any federally chartered corporation that is chartered for the purpose of providing secondary markets for the sale of mortgages by institutions.

(g)

In the stock of the Federal Home Loan Bank.

(h)

In the capital stock of a corporation exclusively engaged in a trust business or a banker’s bank, subject to the same limitations applicable to national banks.

(i)

In the capital stock of a bank service corporation, as provided in ORS 708A.130 (Definition for ORS 708A.135 to 708A.145) to 708A.145 (Authorized services of bank service corporations).

(j)

In the capital stock of a community development corporation, as provided in ORS 708A.150 (Community development corporations).

(k)

If a trust company is not engaged in a banking business and if the director first approves the investment, the trust company may invest an amount that does not exceed 20 percent of the capital of the trust company:

(A)

In the capital stock or a membership interest of a subsidiary investment company of a type defined in the Investment Company Act of 1940, as amended; or

(B)

In a company one of the purposes of which is to act as a federal covered investment adviser or a state investment adviser, as defined in ORS 59.015 (Definitions for Oregon Securities Law), with all the powers a federal covered investment adviser or a state investment adviser customarily exercises.

(L)

In adjustable rate preferred stock of the Student Loan Marketing Association established in 20 U.S.C. 1087-2, except that the aggregate investment in the stock may not exceed 15 percent of the institution’s capital.

(m)

In the capital stock or a membership interest of a company acquired for the purpose of strengthening the institution’s capital structure or eliminating undesirable assets, as provided in ORS 708A.125 (Stock in corporations acquired to strengthen capital or eliminate undesirable assets).

(n)

In the capital stock or a membership interest of a bank, limited liability company or corporation that is engaged in international or foreign banking or foreign banking in a dependency or insular possession of the United States, as provided in ORS 708A.155 (Investment in foreign banks).

(o)

In the capital stock of a corporation, or a membership interest in a limited liability company, that was created to establish ATMs, as provided in ORS 708A.160 (Corporation or limited liability company created to establish ATMs).

(2)

An institution may invest the institution’s assets in shares of any mutual fund, the assets of which are invested solely in obligations of the type described in and limited under ORS 708A.115 (Investment in government obligations).

(3)

An institution may, subject to the director’s approval, acquire or continue to hold the fully paid stock of a corporation or a membership interest in a limited liability company, one of the purposes of which is to assist the institution in handling real estate, claims, judgments or other assets or in holding title to the assets.

(4)

An institution may acquire or continue to hold the fully paid stock of a corporation or a membership interest in a limited liability company, the purpose of which is to permit the institution to engage in any business in which a financial holding company, a bank holding company or a nonbank subsidiary of a financial holding company or a bank holding company is authorized to engage. This subsection does not apply unless the institution is the owner of at least 80 percent of the common stock of the subsidiary corporation or the membership interests of the limited liability company, except qualifying shares of directors or qualifying membership interests of members.

(5)

An institution may, subject to the director’s approval and to rules the director adopts, acquire and continue to hold at least 80 percent of the fully paid stock of a corporation, or at least 80 percent of the membership interests of a limited liability company, that is engaged in any business in which an institution is authorized to engage. Except as otherwise permitted by statute or rule, the investment limitations applicable to the institution apply to the subsidiary.

(6)

An institution may, subject to the director’s approval and under rules the director adopts, acquire and continue to hold all the fully paid stock of a subsidiary corporation, or all of the membership interests of a limited liability company, that is engaged in the business of purchasing the stock of the institution for purposes of holding that stock and making a market for that stock, if not more than 20 percent of the net profit of the banking institution is disbursed to the subsidiary or the limited liability company in any one fiscal year. Except as otherwise permitted by statute or rule, the investment limitations applicable to the institution apply to the subsidiary or the limited liability company. Acquisitions under this subsection may not exceed 15 percent of the institution’s capital.

(7)

An institution may acquire and hold all or part of the stock of a corporation, or the membership interests of a limited liability company, that is or may be licensed after the acquisition as an insurance producer as required by ORS 744.053 (Requirements to be licensed as insurance producer for class of insurance) to transact one or more of the classes of insurance described in ORS 744.062 (Issuance of insurance producer license), subject to the following requirements:

(a)

Acquiring and holding the stock or the membership interests are subject to the director’s approval. The director shall base consideration for approval on the condition of the institution, the adequacy of a formal business plan for the insurance activities, and the existence of satisfactory management for the corporation or the limited liability company.

(b)

The director may revoke or restrict the ongoing authority of the institution to hold stock in the corporation or membership interests in the limited liability company if the condition of the institution substantially deteriorates or if the insurance activities are adversely affecting the institution.

(c)

For each calendar year during which an institution owns all or part of a corporation, or a limited liability company, that is licensed as an insurance producer as required by ORS 744.053 (Requirements to be licensed as insurance producer for class of insurance), the institution shall file a written report with the director. The report must be filed not later than March 31 of the following year and shall disclose the insurance activities of the corporation or the limited liability company. The director shall establish the required contents of the report by rule. The reports filed with the director under this paragraph must be available for public inspection in the director’s office.

(d)

The corporation or limited liability company may not in any manner use customer information that the institution obtained from another insurance producer to promote, develop or solicit insurance business for the corporation or the limited liability company unless the other insurance producer consents to such use of the customer information.

(e)

The corporation or the limited liability company is subject to the limitations that apply to depository institutions under ORS 746.213 (Definitions for ORS 746.213 to 746.219) to 746.219 (Investigatory powers). For the purpose of this paragraph, “depository institution” has the meaning given that term in ORS 746.213 (Definitions for ORS 746.213 to 746.219). [1997 c.631 §119; 1997 c.772 §31b; 1997 c.831 §2a; 2001 c.191 §52; 2001 c.377 §47; 2003 c.363 §7; 2003 c.364 §59a; 2005 c.80 §4; 2005 c.194 §1; 2013 c.104 §3]

Source: Section 708A.120 — Investment in stock of other entity; rules, https://www.­oregonlegislature.­gov/bills_laws/ors/ors708A.­html.

708A.005
Powers of institutions
708A.010
Investments and activities of Oregon commercial banks
708A.115
Investment in government obligations
708A.120
Investment in stock of other entity
708A.125
Stock in corporations acquired to strengthen capital or eliminate undesirable assets
708A.130
Definition for ORS 708A.135 to 708A.145
708A.135
Investment in bank service corporation
708A.140
Discrimination by bank service corporation prohibited against nonstockholding depository institution
708A.145
Authorized services of bank service corporations
708A.150
Community development corporations
708A.155
Investment in foreign banks
708A.160
Corporation or limited liability company created to establish ATMs
708A.165
Membership in Federal Reserve System
708A.170
Securities powers
708A.175
Right to purchase, hold and dispose of real and personal property
708A.180
Acquisition of personal property for leasing purposes
708A.185
Purchase of real estate contracts
708A.190
Acceptance of drafts and bills of exchange
708A.195
Disposition of real and personal property
708A.210
Challenge to validity of institution action
708A.250
Lending money
708A.255
Interest rates on loans or uses of money
708A.260
Accepting own stock as collateral
708A.265
Accepting stock of other institutions as collateral
708A.270
Real estate loans
708A.275
Establishment of loan production office
708A.290
“Capital” defined for ORS 708A.290 to 708A.375
708A.295
Limitations on amount of obligations to Oregon commercial bank
708A.300
Obligations secured by readily marketable collateral
708A.305
Obligations of other financial institutions
708A.310
Obligations of indorser of discounted commercial paper
708A.315
Noncommercial short-term notes
708A.320
Obligations secured by shipping documents
708A.325
Installment consumer paper
708A.330
Bankers’ acceptances of other financial institutions
708A.335
Obligations secured by documents covering readily marketable staples
708A.340
Obligations secured by documents covering livestock
708A.345
Obligations secured by government obligations or shares of mutual fund or unit trust
708A.350
Obligations secured by government bonds
708A.355
Insured and guaranteed obligations
708A.360
Obligations secured by deposits
708A.365
Obligations secured by life insurance policy values
708A.370
Obligations secured by first lien on real estate
708A.375
Obligations of guarantors
708A.400
Deposit accounts
708A.405
Deposits
708A.410
Savings accounts
708A.415
Securing deposits by surety bond, letter of credit or insurance
708A.420
Notice to depositor upon change in terms, charges, withdrawal conditions or decrease in interest rate
708A.425
Deposit made in name of minor
708A.430
Disposition of deposit on death of depositor
708A.435
Adverse claim to deposit
708A.440
Checks drawn by agents presumed to be in authorized manner
708A.445
Checks of intoxicated, drugged or financially exploited persons
708A.450
Certified checks
708A.455
Definitions for ORS 708A.455 to 708A.515
708A.460
Application of ORS 708A.465 to 708A.475
708A.465
Ownership of multiple-party accounts
708A.470
Multiple-party accounts
708A.475
Rights of survivorship based on form of account
708A.480
Transfer of moneys upon death of depositor or trustee is not testamentary disposition
708A.485
Payment of deposit in multiple-party account to one or more parties
708A.488
Withdrawal or payment conditioned on advance notice
708A.490
Joint account
708A.495
P.O.D. account
708A.500
Trust account
708A.505
Discharge of institution from liability for payments made
708A.510
Right of institution to setoff
708A.515
Designation of agent for account
708A.535
Granting security interests in institution assets
708A.555
Generally accepted accounting principles
708A.560
Real and personal property used in institution’s business
708A.565
Certain stock
708A.570
Community development corporations
708A.575
Market-making corporations
708A.580
Capital-strengthening corporations
708A.585
Claims and judgments as assets
708A.590
Charging off real estate assets
708A.595
Charging off personal property assets
708A.600
Charging off losses
708A.605
Separate accounts for foreign branches
708A.630
Negligent, excessive, dishonest or unlawful loans
708A.635
Written policies regarding reporting to and obtaining approval of board
708A.640
Receiving illegal compensation
708A.645
Illegal guaranty or indorsement
708A.650
Banking days
708A.655
Procedures for opening safe deposit box after death of person who was sole lessee or last surviving lessee of box
708A.660
Savings promotion raffles
708A.670
Definitions for ORS 708A.670 and 708A.675
708A.675
Authority of financial institutions in cases of suspected financial exploitation
708A.680
Contractual rights not restricted
708A.990
Civil penalties
708A.995
Criminal penalties
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