Sec. 36a-250. Powers of Connecticut banks. (a) Except as otherwise provided in
subsection (b) of this section, a Connecticut bank may:
(1) Transact a general banking business and exercise by its governing board or duly
authorized officers or agents, subject to applicable law, all such incidental powers as
are necessary thereto. The express powers authorized for a Connecticut bank under
subdivisions (2) to (41), inclusive, of this subsection do not preclude the existence of
additional powers deemed to be incidental to the transaction of a general banking business pursuant to this subdivision;
(2) (A) Receive deposits as authorized by and subject to the provisions of sections
36a-290 to 36a-305, inclusive, section 36a-307, sections 36a-315 to 36a-323, inclusive,
and sections 36a-330 to 36a-338, inclusive, including: (i) Savings deposits; (ii) time
deposits; (iii) demand deposits; (iv) public funds or money held in a fiduciary capacity;
(v) school savings funds; and (vi) club deposits; and (B) pay interest or dividends
thereon;
(3) Act as a depository of court and trust funds;
(4) Purchase and sell coins and bullion;
(5) Receive for safekeeping or otherwise all kinds of personal property, including
papers, documents and evidences of indebtedness;
(6) Conduct a safe deposit business on its banking premises;
(7) Act (A) as guardian or conservator of the estate of any person, but not of the
person, (B) as a trustee, receiver, executor or administrator, or (C) in any other fiduciary
capacity, all without bond unless a bond is ordered by the court;
(8) Act as agent or attorney in fact for the holders of securities or the owners of real
estate;
(9) Act as transfer agent or registrar of stocks and bonds;
(10) Execute and deliver signature guaranties as may be incidental or usual in the
transfer of investment securities;
(11) Act as agent, fiscal agent or trustee for any corporation or for holders of bonds,
notes or other securities, and pledge assets to secure deposits in its banking department
when (A) made by it as trustee under a trust indenture for the holders of revenue bonds
issued by this state, any municipality, district, municipal corporation or authority or
political subdivision thereof, and the express provisions of the authority or its political
subdivision, and the express provisions of the trust indenture require the deposit to be
so secured, (B) made by it as fiscal agent for a housing authority in connection with a
federally-assisted housing project and federal regulations or other requirements call for
the deposits to be so secured, or (C) made by it to secure deposits in individual retirement
accounts and qualified retirement plan accounts, established in accordance with the
applicable provisions of the Internal Revenue Code of 1986, or any prior or subsequent
corresponding internal revenue code of the United States, as from time to time amended,
where such deposits exceed the maximum of federal deposit insurance available for
such accounts;
(12) Act as fiscal agent for this state or any of its political subdivisions when authorized by the executive head of this state or of the political subdivision;
(13) Act as agent (A) in the collection of taxes for any qualified treasurer of any
taxing district or qualified collector of taxes or (B) for any electric, electric distribution,
gas, water or telephone company operating within this state in receiving moneys due
that company for utility services furnished by it;
(14) Act as agent for the sale, issue and redemption of obligations of the United
States and pledge assets to the United States or to the proper federal reserve bank for
its obligations as that agent;
(15) (A) Act as agent for an insured depository institution affiliate in receiving
deposits, renewing time deposits, closing loans, servicing loans and receiving payments
on loans and other obligations, and in so doing shall not be considered to be a branch
of such affiliate;
(B) A Connecticut bank may not conduct any activity as an agent under subparagraph (A) of this subdivision which such bank is prohibited from conducting as a principal;
(16) Act as treasurer of any organization exempt from federal income taxation under
Section 501 of the Internal Revenue Code of 1986, or any subsequent corresponding
internal revenue code of the United States, as from time to time amended;
(17) Establish a charitable fund, either in the form of a charitable trust or a nonprofit
corporation to assist in making charitable contributions, provided (A) the trust or nonprofit corporation is exempt from federal income taxation and may accept charitable
contributions under Section 501 of the Internal Revenue Code of 1986, or any subsequent
corresponding internal revenue code of the United States, as from time to time amended,
(B) the trust or nonprofit corporation's operations shall be disclosed fully to the commissioner upon request, and (C) the trust department of the bank or one or more directors
or officers of the bank act as trustees or directors of the fund;
(18) In the discretion of a majority of its governing board, make contributions or
gifts to or for the use of any corporation, trust or community chest, fund or foundation
created or organized under the laws of the United States or of this state and organized
and operated exclusively for charitable, educational or public welfare purposes, or of
any hospital which is located in this state and which is exempt from federal income
taxes and to which contributions are deductible under Section 501(c) of the Internal
Revenue Code of 1986, or any subsequent corresponding internal revenue code of the
United States, as from time to time amended;
(19) Discount, purchase and sell accounts receivable, negotiable and nonnegotiable
promissory notes, drafts, bills of exchange and other forms of indebtedness;
(20) (A) Accept for payment at future dates drafts drawn upon it, and (B) except
as provided in section 36a-299, sell or issue without charge negotiable checks or drafts
drawn by or on the bank. Negotiable checks or drafts drawn, sold or issued by a bank
may be drawn on that bank or be payable by or through another bank or out-of-state bank;
(21) Make secured and unsecured loans and issue letters of credit as authorized by
and subject to section 36a-260;
(22) (A) Issue credit cards and debit cards and enter into card agreements with the
bank's card holders and with other card issuers, (B) lend money to individuals, honor
drafts and similar orders drawn or accepted, whether by written instrument or electronic
transmission, and pay and agree to pay obligations incurred in connection with those
agreements, (C) become affiliated with any credit card corporation or association, and
(D) subject to sections 36a-155 to 36a-159, inclusive, where applicable, provide electronic fund transfer facilities and services and enter into agreements with customers and
other persons regarding the provision of such facilities;
(23) Provide home banking services to customers as provided in section 36a-170;
(24) Contract for and pay the premiums upon life insurance in the amount of the
unpaid balance due on loans;
(25) Borrow money and pledge assets therefor, and pledge assets to secure trust
funds on deposit awaiting investment;
(26) Enter into leases of personal property acquired upon the specific request of
and for the use of a prospective lessee;
(27) Make investments as authorized by this title;
(28) Sell to any person, including any state or federal agency or instrumentality,
any loan or group of loans legally owned by the bank, repurchase any such loan or group
of loans, and act as collecting, remitting and servicing agent in connection with any
such loans and charge for its acts as agent. Any such bank is authorized to purchase the
minimum amount of capital stock of the applicable agency or instrumentality if required
by that entity to be purchased in connection with the assignment of loans to that entity
and to hold and dispose of that stock;
(29) With the approval of the commissioner, deal in and underwrite, to the same
extent as is permitted to a national banking association, obligations of: (A) The United
States or any of its agencies; (B) any state or any political subdivision or instrumentality
of the state; or (C) Canada, any province of Canada or any political subdivision of
Canada;
(30) Issue and sell securities which (A) are guaranteed by the Federal National
Mortgage Association or any other agency or instrumentality authorized by state or
federal law to create a secondary market with respect to loans of the type originated by
the bank, or (B) subject to the approval of the commissioner, relate to loans originated
by the bank and are guaranteed or insured by a financial guaranty insurance company
or comparable private entity;
(31) Subject to the approval of the commissioner, authorize the issuance and sale
of evidences of indebtedness, including debentures, debt instruments of all maturities
and capital notes, at such times, in such amount and upon such terms as are determined
by the governing board, provided the issuance of such evidences of indebtedness which
are payable on demand or mature within five years of their issuance or which are effected
in the ordinary course of business do not require the approval of the commissioner.
The proceeds of such evidences of indebtedness which mature after five years of their
issuance which are subordinate to the claims of depositors upon liquidation of the bank
shall be considered part of its capital for the purpose of computing any loan, deposit or
investment limitation under this title;
(32) With the approval of and upon such conditions and under such regulations as
may be prescribed or adopted by the commissioner, establish and maintain one or more
mutual funds and offer to the public shares or participations therein;
(33) (A) With the written approval of the commissioner, acquire, alter or improve
real estate for present or future use in the business of the bank. Such approval shall not
be required in case of the alteration or improvement of real estate already owned or
leased by the bank or a corporation controlled by it as provided in subsection (d) of
section 36a-276, if the expenditure for such purposes does not in any one calendar year
exceed five per cent of the bank's equity capital and reserves for loan and lease losses
or seven hundred fifty thousand dollars, whichever is less.
(B) With the written approval of the commissioner, purchase real estate adjoining
any parcel of real estate then owned by it and acquired in the usual course of business,
provided the aggregate of all investments and loans authorized in this subparagraph and
in subparagraph (A) of this subdivision and in the equipment used by such bank in its
operations, together with the amount of any indebtedness incurred by any corporation
holding real estate of the bank and such bank's proportionate share, computed according
to stock ownership, of any indebtedness incurred by any service corporation, does not
exceed fifty per cent of the equity capital and reserves for loan and lease losses of the
bank, unless the commissioner finds that the rental income from any part of the premises
not occupied by the bank will be sufficient to warrant larger investment;
(34) Convey any real estate owned by it at the price and upon such terms of payment
as its governing board or an authorized committee thereof determines and sets forth in
the bank's records. If any such sale is wholly or partly for credit, a note secured by a
first mortgage on the real estate may evidence that credit. With the written approval of
the commissioner, the bank may accept other real estate in whole or in part for any such
conveyance;
(35) Establish and maintain an international banking facility, as defined in regulations adopted by the Board of Governors of the Federal Reserve System, subject to such
regulations as the commissioner may adopt, in accordance with chapter 54, to specify,
and impose restrictions upon, the types of activities in which the international banking
facility may engage;
(36) Join the Federal Reserve System;
(37) With the approval of the commissioner, join the Federal Home Loan Bank
System and borrow funds as provided under federal law;
(38) Even if not expressly authorized to exercise fiduciary powers, act as trustee
or custodian of a plan which qualifies as part of a retirement plan for self-employed
individuals or an individual retirement account under the provisions of the Internal
Revenue Code of 1986, or any subsequent corresponding internal revenue code of the
United States, as from time to time amended, if the governing instrument limits the
investment of the funds held pursuant to such plan to the following investments: (A)
Savings deposits and time deposits; and (B) with respect to retirement plans for self-employed individuals, notes of members in such plans which evidence the indebtedness
of such members for funds borrowed from the plans. Funds held pursuant to any plan
which so qualifies may be deposited in any Connecticut bank without regard to any
statutory limit on the amount which such bank may have on deposit from one depositor;
(39) Sell insurance and fixed and variable annuities directly, sell insurance and such
annuities indirectly through a subsidiary, or enter into arrangements with third-party
marketing organizations for the sale by such third-party marketing organizations of
insurance or such annuities on the premises of the Connecticut bank or to customers of
the Connecticut bank; provided (A) such insurance and annuities are issued or purchased
by or from an insurance company licensed in accordance with section 38a-41, and (B)
the Connecticut bank, subsidiary or third-party marketing organization, and any officer
or employee thereof, shall be licensed as required by section 38a-769 before engaging
in any of the activities authorized by this subdivision. As used in this subdivision, "annuities" and "insurance" have the same meanings as set forth in section 38a-1, except that
"insurance" does not include title insurance. The provisions of this subdivision do not
authorize a Connecticut bank or a subsidiary of a Connecticut bank to underwrite insurance or annuities;
(40) With the prior written approval of the commissioner, engage in closely related
activities, unless the commissioner determines that any such activity shall be conducted
by a subsidiary of the Connecticut bank, utilizing such organizational, structural or other
safeguards as the commissioner may require, in order to protect the Connecticut bank
from exposure to loss. As used in this subdivision, "closely related activities" means
those activities that are closely related to the business of banking, are convenient and
useful to the business of banking, are reasonably related to the operation of a Connecticut
bank or are financial in nature including, but not limited to, business and professional
services, data processing, courier and messenger services, credit-related activities, consumer services, services related to real estate, financial consulting, tax planning and
preparation, community development activities, any activities reasonably related to such
activities, or any activity permitted under the Bank Holding Company Act of 1956, 12
USC Section 1841 et seq., as from time to time amended, or the Home Owners' Loan Act
of 1933, 12 USC Section 1461 et seq., as from time to time amended, or the regulations
promulgated under such acts as from time to time amended;
(41) Engage in any activity that a federal bank or an out-of-state bank may be authorized to engage in under federal or state law, provided the Connecticut bank shall file
with the commissioner prior written notice of its intention to engage in such activity.
Such notice shall include a description of the activity, a description of the financial
impact of the activity on the Connecticut bank, citation of the legal authority to engage
in the activity under federal or state law, a description of any limitations or restrictions
imposed on such activity under federal or state law, and any other information that the
commissioner may require. The Connecticut bank may engage in such activity unless
the commissioner disapproves such activity not later than thirty days after the notice is
filed. The commissioner may adopt regulations in accordance with chapter 54 to ensure
that any such activity is conducted in a safe and sound manner with adequate consumer
protections. The provisions of this subdivision do not authorize a Connecticut bank or
a subsidiary of a Connecticut bank to sell title insurance; and
(42) Act as trustee or custodian of a manufacturing reinvestment account established pursuant to section 32-9zz.
(b) A trust bank shall not be authorized to exercise any of the powers enumerated
in this section to the extent that such exercise would cause it to function otherwise than
in a fiduciary capacity, including, but not limited to, receiving or holding deposits of
any kind, other than in a fiduciary capacity, or making loans or otherwise extending
credit, other than in a fiduciary capacity.
(c) A Connecticut bank which is authorized to exercise fiduciary powers pursuant
to subsection (a) of this section shall exercise such powers in compliance with the provisions of sections 36a-350 to 36a-353, inclusive, 36a-365 to 36a-372, inclusive, 36a-380
to 36a-386, inclusive, and 36a-395 to 36a-399, inclusive.
(P.A. 94-122, S. 115, 340; P.A. 95-155, S. 20, 29; P.A. 96-39, S. 1, 3; 96-44, S. 2; P.A. 97-317, S. 1, 4; P.A. 98-28, S.
112, 117; 98-178, S. 1; P.A. 99-158, S. 5, 6; P.A. 02-47, S. 15; P.A. 04-136, S. 33; P.A. 05-288, S. 204; P.A. 06-10, S. 4;
P.A. 11-140, S. 6.)
History: P.A. 94-122 effective January 1, 1995; P.A. 95-155 amended Subsec. (a) by adding Subdiv. (14) re acting as
an agent for an insured depository institution, renumbering the remaining Subdivs. accordingly, effective June 27, 1995;
P.A. 96-39 added Subsec. (a)(38) re sale of annuities, effective May 2, 1996; P.A. 96-44 amended Subsec. (a) re bank
investments, deleting references throughout section to investments in stocks, bonds, notes etc. and substituting provision
in Subdiv. (26) to authorize investments permissible under title 36a; P.A. 97-317 amended Subdiv. (38) re sale of insurance,
deleted former Subsec. (b) re prohibition on engaging in insurance business, and redesignated former Subsecs. (c) and (d) as
Subsecs. (b) and (c), effective July 8, 1997; P.A. 98-28 amended Subsec. (a)(12) by adding electric distribution companies,
effective July 1, 1998; P.A. 98-178 amended Subsec. (a) by adding new Subdiv. (4) re purchase and sale of coins and
bullion and by redesignating existing Subdivs. (4) to (38) as Subdivs. (5) to (39); P.A. 99-158 made a technical change in
Subsec. (a)(1) and by added Subsecs.(a)(40) re closely related activities and (41) re authorized activities of federal banks;
P.A. 02-47 made a technical change in Subsec. (a)(11) and added provisions re engaging in activities that an out-of-state
bank may be authorized to engage in under state law in Subsec. (a)(41); P.A. 04-136 amended Subsec. (b) to substitute
"trust bank" for "Connecticut bank which is organized to function solely in a fiduciary capacity", effective May 12, 2004;
P.A. 05-288 made technical changes in Subsec. (a)(38), effective July 13, 2005; P.A. 06-10 amended Subsec. (a)(33) to
modify calculation used to determine amount a bank may expend to acquire, alter or improve real estate for use in bank
business in any one calendar year without commissioner's written approval by substituting $750,000 for $500,000, to
provide exception from written approval requirement for alteration or improvement of real estate leased by the bank and
to make technical changes, effective May 2, 2006; P.A. 11-140 amended Subsec. (a) by adding Subdiv. (42) re trustee or
custodian of manufacturing reinvestment account, effective July 1, 2011.
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Sec. 36a-251a. Actions taken pursuant to commissioner's discretionary powers. Annual report. The commissioner shall submit an annual report to the joint standing
committee of the General Assembly having cognizance of matters relating to banks no
later than January first. The report shall summarize the commissioner's actions taken
pursuant to section 36a-70, 36a-139a or subdivisions (41) and (42) of subsection (a) of
section 36a-250.
(P.A. 00-40; P.A. 03-84, S. 25; P.A. 04-8, S. 3; P.A. 11-140, S. 7.)
History: P.A. 03-84 changed "Commissioner of Banking" to "commissioner", effective June 3, 2003; P.A. 04-8 made
technical changes, effective April 16, 2004; P.A. 11-140 changed reference to Sec. 36a-250(a) from Subdivs. (40) and
(41) to Subdivs. (41) and (42), effective July 1, 2011.
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Sec. 36a-261. (Formerly Sec. 36-99). Mortgage loans. (a) As used in this section,
the term "mortgage loan" means a loan, line of credit or letter of credit secured wholly
or substantially by a lien on or interest in real estate, including a leasehold interest, for
which the lien or interest is central to the extension of credit, but does not include the
following loan transactions:
(1) Loans that are to be sold by the Connecticut bank promptly after origination by
such bank, without extended recourse for payment default, to a financially responsible
third party, provided such loans shall be considered mortgage loans for purposes of
purchases and participations by a Connecticut bank if such loans otherwise qualify as
mortgage loans under this subsection.
(2) Loans for which a lien on or interest in real estate is taken as additional collateral
through an abundance of caution by the Connecticut bank, including loans pursuant to
which the bank takes a blanket lien on all or substantially all of the assets of the borrower,
and the value of the real estate is low relative to the aggregate value of all collateral.
(3) Loans made to manufacturing, industrial or commercial borrowers with a lien
or interest in real estate taken as all or a portion of the collateral to directly or indirectly
secure such loans, when the bank looks for repayment out of the operations of the borrower's business, relying on the borrower's general credit standing and the borrower's forecast of operations.
(b) (1) The assets of Connecticut banks may be invested in mortgage loans, subject
to the general limitations set forth in this section.
(2) Any such mortgage loan shall be secured either by (A) a first mortgage which
is a first lien or (B) a mortgage which is subordinate to another mortgage or other mortgages, provided, in the case of a loan secured by a mortgage which is subordinate to
another mortgage or other mortgages, which other mortgage or mortgages are held by
a person other than the Connecticut bank, the real estate securing such loan is (i) residential real estate, or (ii) nonresidential real estate provided the loan does not exceed, at
the time of origination, a loan-to-value ratio of fifty per cent, or (iii) nonresidential real
estate in a loan transaction which, at the time of origination, exceeds a loan-to-value
ratio of fifty per cent, provided the aggregate amount of all such loans made pursuant
to this subparagraph (B)(iii) does not exceed, at the time of origination, twenty-five per
cent of the equity capital and reserves for loan and lease losses of the Connecticut bank.
A loan which was included within the aggregate limit of subparagraph (B)(iii) of this
subdivision subsequently may be excluded if the loan is repaid or if the applicable loan-to-value ratio is reduced to fifty per cent or below because of a reduction in principal
or senior liens, additional contributions of real estate collateral, or an increase in equity
value substantiated by a current suitable appraisal or evaluation.
(c) "Real estate", as used in this section, includes refrigerating equipment, dishwashing equipment, stoves and clothes washing machines, hereinafter called "household equipment", used on the premises at the time of execution of the mortgage or
substituted after the mortgage is executed if such equipment is specifically declared in
the mortgage deed to be used as a part of the mortgaged realty, and if such mortgage
declares that household equipment substituted for the original household equipment
mentioned in such mortgage shall be part of the mortgaged realty.
(d) The real estate shall be unencumbered, except to the extent that prior mortgages
are permitted by subdivision (2) of subsection (b) of this section. A satisfactory certificate of title or other suitable form of title review issued by a suitable person approved
by such Connecticut bank, or a satisfactory policy of title insurance, shall be filed with
the lending bank until the loan is paid or until the loan is sold. The following are not
encumbrances within the meaning of this section: (1) Reservations to the United States
of America of fissionable materials, (2) leases, provided the impact of the lease is adequately reflected in the appraisal or evaluation required by subsection (e) of this section,
and (3) easements, restrictions, interests and other rights (A) which do not materially
adversely affect the marketability of the real estate, (B) which are otherwise adequately
reflected in the appraisal or evaluation required by subsection (e) of this section, (C)
where the attendant risks are satisfactorily insured under an acceptable policy of title
insurance, or (D) which the bank otherwise reasonably determines do not present a
material adverse risk after consideration of the relevant underwriting risks for the loan
or class of loans. Connecticut banks shall adopt and implement a real estate lending
policy which reflects, in accordance with safe and sound banking principles, consideration of acceptable standards for title review and title insurance.
(e) The real estate shall be appraised or otherwise suitably evaluated, before any
loan is made on its security, by one or more suitable persons who are familiar with real
estate values in the community where the real estate is located. Such persons shall be
approved by the governing board of the Connecticut bank making the loan, or by a
management committee, board committee or agent appropriately designated by such
governing board in accordance with the appraisal policy required by this subsection,
provided, if the loan under consideration is a loan to be insured or guaranteed by a
governmental agency, the appraiser may be one who appraised the property for the
governmental agency. Such appraisal or evaluation shall be in writing, shall state the
amount at which the property has been appraised or evaluated and shall be filed with
the Connecticut bank until the loan is paid or until the loan is sold. Connecticut banks
shall adopt and implement an appraisal policy which reflects, in accordance with safe
and sound banking principles, consideration of appraiser qualifications, procedures for
the approval and selection of appraisers, appraisal and evaluation standards, and the
bank's administration of the appraisal and evaluation process.
(f) Notwithstanding the provisions of subdivision (2) of subsection (h) of this section, the Connecticut bank, in its discretion and for such a period as it deems advisable,
may excuse the borrower on a mortgage loan from amortization of the principal of
such loan.
(g) Loans not exceeding fifty per cent of the value of the real estate may be made
without further restriction than is set forth in subsections (a) to (f), inclusive, of this
section. The requirements of this section relating to the relationship between the loan
amount and the value of the real estate shall be calculated on the basis of the aggregate
amount of such loan plus the unpaid amount of any obligation secured by any prior
mortgages or liens and the amount of any advancements permissible under any loan
secured by such prior mortgage or mortgages in relation to the value of the real estate
interest.
(h) Loans not exceeding ninety per cent of the value of the real estate may be made
subject to the following additional limitations set forth in subdivisions (1) and (2) of
this subsection. (1) No loan shall be made until the person or persons liable on the note
have filed with the bank a satisfactory financial statement which shall be kept on file.
(2) All such loans shall require repayment of principal and payment of interest in at
least consecutive semiannual installments of principal and interest, such payments to
be sufficient to pay the loan in full not later than forty-two years from the date of the
first payment and the first payment to be made within twenty-four months of the date
of the note. The requirements for semiannual principal payments pursuant to this subdivision are not applicable to: (A) Consumer revolving loan agreements made pursuant
to subsection (c) of section 49-2, (B) alternative mortgage loans made pursuant to section
36a-265, (C) loans which may be demanded at any time and which are secured by
residential real estate and (D) any other loan or class of loans determined by the commissioner not to be subject to such requirements.
(i) The following mortgage loans may be made without regard to the ninety per
cent loan-to-value limit set forth in subsection (h) of this section:
(1) Loans guaranteed or insured by the United States government or its agencies,
provided the amount of the guaranty or insurance is at least equal to the portion of the
loan that exceeds the applicable loan-to-value limit.
(2) Loans backed by the full faith and credit of a state government, provided the
amount of the assurance is at least equal to the portion of the loan that exceeds the
applicable loan-to-value limit.
(3) Loans guaranteed or insured by a state, municipal or local government, or its
agency, provided (A) the amount of the guaranty or insurance is at least equal to the
portion of the loan that exceeds the applicable loan-to-value limit and (B) the bank has
determined that the guarantor or insurer has the financial capacity and willingness to
perform under the terms of the guaranty or insurance agreement.
(4) Loans that are renewed, refinanced, or restructured without the advancement of
new funds or an increase in a line of credit, except for reasonable closing costs.
(5) Loans that are renewed, refinanced, or restructured in connection with a workout
situation, either with or without the advancement of new funds, where such action is
consistent with safe and sound banking practices and is a part of a clearly defined and
well documented program to achieve orderly liquidation of the debt, reduce risk of loss
or maximize recovery of the loan.
(6) Loans that facilitate the sale of real estate acquired by the Connecticut bank in
the ordinary course of collecting a debt previously contracted in good faith.
(7) Loans where the Connecticut bank does not rely principally on the real estate
as security.
(8) Loans where all or part of such loan is made in primary reliance upon the mortgage insurance policy of a private mortgage guaranty company, licensed by the Insurance Commissioner to do business in this state and approved by the commissioner.
(9) Loans or loan programs which are determined by the governing board of the
Connecticut bank, or by a management committee or board committee appropriately
designated by such governing board, to be prudent under the circumstances after consideration of the relevant underwriting risks, provided (A) the aggregate amount of all such
loans, calculated at the time of origination of each such loan, does not exceed one hundred per cent of the bank's equity capital and reserves for loan and lease losses, (B) the
aggregate amount of all such loans, calculated at the time of origination of each such
loan, other than loans secured by one-to-four-family residential property, does not exceed thirty per cent of the bank's equity capital and reserves for loan and lease losses, (C)
the aggregate amount of all such loans is included in the percentage of assets limitation
specified in subsection (s) of this section, and (D) the bank makes a notation of such
determination and the reasons therefor in the applicable loan file. A loan which is included within the aggregate limits of this subsection may subsequently be excluded if
the applicable loan-to-value limit is satisfied because of a reduction in principal or senior
liens, additional contribution of real estate collateral or increases in equity value substantiated by a current suitable appraisal or evaluation.
(j) Loans made under this section may be for the purpose of building upon or improving the property of the borrower, and may be made in installments advanced at the
discretion of the lending institution as the work progresses; provided at no time shall
the ratio of the amount loaned to the then total value exceed the ratio the final loan is
to bear to the value of the completed property. Loans made to finance the construction
of buildings and having a maturity of not more than twenty-four months or having a
maturity of not more than thirty-six months if approved by the commissioner are not
subject to the limitations imposed by this subsection.
(k) Connecticut banks are authorized to make and invest in any mortgage loan,
including construction and improvement loans, insured by the Federal Housing Administrator without regard to the limitations and restrictions of this section, except that such
loans are subject to the following limitations: (1) In the case of loans secured by a first
mortgage on real estate, the contract of insurance shall contain a provision that the
debentures to be issued by the Federal Housing Administrator in settlement of such
insurance, in the event of the foreclosure or default of any such loan or mortgage, shall
be fully guaranteed as to payment of principal and interest by the government of the
United States, (2) if the bank has a commitment for such insurance, issued by the Federal
Housing Administration, it may grant a loan to a borrower for the purpose of building
upon or improving the property of the borrower, the money so borrowed to be advanced
at the discretion of the bank in installments as the work progresses, provided the total
of all advances made does not exceed eighty per cent of the value of the property on
the date of each advance or the proportion that the final loan is to bear to the final
estimated value of the property, whichever is greater, except that the final advance may
be in such an amount that the total of all advances made may equal but not exceed the
amount of such commitment. The final advance shall not be made until the buildings
or improvements have been inspected and approved by the Federal Housing Administration for an insured loan.
(l) Subject to such regulations and restrictions as the commissioner finds necessary
and proper, and subject to the limitations, restrictions and privileges contained in this
subsection, Connecticut banks are authorized to make and invest in any loan which the
Administrator of Veterans' Affairs guarantees, makes a commitment to guarantee, or
insures pursuant to Title III of an Act of Congress entitled "Servicemen's Readjustment
Act of 1944", as amended, without regard to the limitations and restrictions of this title.
(1) Each such loan shall be subject to the provisions of this title prescribing the maximum
limits, in amount, of: (A) A loan or loans to or total liability of any one individual, and
(B) a loan upon the security of real estate, with relation to the appraised value of such
real estate. (2) Each such loan shall be secured by a mortgage on real estate, except that
a loan pursuant to Section 501, 502 or 503 of the Servicemen's Readjustment Act of
1944, as amended, for the purpose of repairing, altering or improving a building or
buildings, and a loan pursuant to Section 505(a) of said act, need not be secured by a
lien on real property.
(m) (1) Additional sums, as evidenced by a note or notes signed by the then owner
of record of the mortgaged premises, may be advanced by a Connecticut bank to such
owner and shall be a part of the mortgage debt due the mortgagee, provided (A) such
advancements shall not exceed the difference between the indebtedness at the time of
the advance and the original mortgage debt, (B) the original mortgage deed shall have
been recorded after October 1, 1951, and shall contain specific provisions granting this
right, and (C) the terms of repayment of such advancements shall not extend the time
of repayment beyond the maturity of the original mortgage debt. If the then owner of
record is other than the original mortgagor, neither the original mortgagor nor any other
former owner of the mortgaged premises is liable on such advancements.
(2) Advancements may also be made by writing open-end mortgages in accordance
with the provisions of section 49-2.
(n) (1) Connecticut banks may participate with other lenders, which may be corporations, business trusts, pension trusts, governments or government agencies, in mortgage loans which Connecticut banks are permitted to invest in under this section, but
the amount of the participating interest of any Connecticut bank in any one such loan
shall not exceed the amount which such bank would be permitted to invest individually
in any one loan of the same class under this section, and the amount of the participating
interests shall be included in determining whether or not such bank is exceeding its loan
limits.
(2) Connecticut banks may participate in mortgage loans only pursuant to a written
agreement between all the participating lenders and the servicing agent for such loan
and the servicing agent may impose a service charge therefor.
(o) Any Connecticut bank may grant a loan secured by a first mortgage on property
of the borrower without regard to the limitations and restrictions on loans imposed by
this section, if the borrower has an agreement with a housing authority created under
section 8-40, secured by a commitment of the United States Department of Housing
and Urban Development, pursuant to which the borrower is to construct housing upon
the property and the housing authority is to purchase the property upon completion of
construction, the money so borrowed to be advanced at the discretion of the bank as
construction progresses, provided the ratio of the total of all advances made to the amount
of the agreed purchase price at no time exceeds ninety per cent of the ratio of the value
of the property to the expected value of the property upon completion of construction.
(p) If a loan made under this section is secured by a mortgage on income-producing
real estate and if the Connecticut bank relies upon such real estate or income production
as primary security for the loan, the bank need not require that any person be personally
liable on the note, in which case the bank shall retain in its files, in lieu of the financial
statements required by subdivision (1) of subsection (h) of this section, such income
projection statements, tenants' financial statements and other credit information as the
bank deems necessary.
(q) Subject to such regulations as the commissioner may adopt, Connecticut banks
may make mortgage loans secured by leasehold interests, provided the leasehold estate
securing such mortgage loan has a remaining term at the time such mortgage loan is
originated by the bank which does not expire prior to the maturity of the mortgage loan
obligation. The term of the leasehold estate shall not include any period for which the
lease may grant an option of renewal.
(r) Any Connecticut bank may, in connection with any mortgage loan made by it,
contract with the mortgagor for interest to be paid currently or to accrue, and, if such
interest is to accrue, for the interest to be added to the mortgage debt on which interest
may be charged and collected. Accrued interest which is added to the mortgage debt
shall be secured by the mortgage to the same extent as the principal of the mortgage debt.
(s) The assets of a Connecticut bank may be invested in mortgage loans which do
not conform to the requirements of this section, provided the governing board of the
Connecticut bank, or a management committee or board committee appropriately designated by such governing board, has reviewed the nonconforming aspects of the particular
mortgage loan or mortgage loan program and has determined such mortgage loan or
mortgage loan program to be prudent under the circumstances and all such mortgage
loans outstanding at the time of origination when combined with the loans made pursuant
to subdivision (9) of subsection (i) of this section, do not exceed eight per cent of the
assets of the bank. The bank shall make a notation of the prudence determination and
the reasons for such determination in the applicable loan file. A loan which was included
within the percentage of assets limitation of this subsection subsequently may be excluded if the loan is repaid or if the nonconforming aspects are eliminated or otherwise
cease to exist.
(1949 Rev., S. 5818, 5819; 1949, S. 516a-519a; 1951, 1953, 1955, S. 2679d; 1957, P.A. 89; 1959, P.A. 11, S. 1; 14;
74, S. 1; 1961, P.A. 81; 82; 93; 101, S. 1-3; 1963, P.A. 70; 94; 119, S. 1, 2; February, 1965, P.A. 76, S. 1; 99; 135; 163,
S. 1; 209, S. 1; 222; 359, S. 1; 1967, P.A. 67, S. 1; 357; 427, S. 2; 434, S. 2; 461, S. 22; 1969, P.A. 87; 223, S. 1-3; 255;
265, S. 2; 504, S. 13-15; 1971, P.A. 310, S. 1; 1972, P.A. 114, S. 2; P.A. 73-167, S. 1, 2; 73-224, S. 1, 2; 73-669, S. 1, 2;
P.A. 74-62, S. 1, 2; 74-101, S. 1, 2; P.A. 75-56, S. 2, 3; 75-200, S. 1-4; P.A. 76-28, S. 1, 2; 76-33, S. 2, 3; P.A. 77-74, S.
2, 3; 77-614, S. 161, 163, 610; P.A. 78-121, S. 97, 98, 113; P.A. 79-75; 79-126; P.A. 80-482, S. 247, 345, 348; P.A. 81-120, S. 6-10, 13; 81-391, S. 4; P.A. 85-368, S. 1-3, 5; 85-379, S. 20, 53; P.A. 86-268, S. 2, 7; P.A. 87-9, S. 2, 3; P.A. 90-21; P.A. 91-357, S. 24, 78; P.A. 92-12, S. 37; P.A. 94-122, S. 118, 340; P.A. 95-70, S. 2, 8; P.A. 96-44, S. 3; P.A. 11-50,
S. 5.)
History: 1959 acts made the following changes: In Subsec. (5), the loan limit was changed from $10,000 to $15,000,
in Subsec. (11)(a) the limit was changed from $15,000 to $20,000, in Subsec. (11)(d) the maximum term of loans was
changed from 20 to 25 years and in Subsec. (15) the loan limit was changed from 10% to 15%; 1961 acts made the following
changes: In Subsec. (6) (b) was added, in Subsec. (7) the investment limit was changed from 70% to 85% and the exception
added, in Subsec. (8) the amount of principal indebtedness was changed from 40% to 50%, in Subsec. (13) the opening
clause is new, in Subsec. (14) the reference to Subsec. (7) is new and former clause c. of Subdiv. (1) was deleted, in Subsec.
(15) the provision re guarantee by the administrator of veterans' affairs was changed from a 50% minimum guarantee and
the maximum amount of loan changed from $15,000 to $20,000; 1963 acts added Subsec. (17), added proviso re loans
secured by mortgage accepted by administrator of veterans' affairs in Subsec. (15) and raised limit from 15% to 25% of
assets in that Subsec., increased loan limit from 66.66% to 75% of real estate's value in Subsec. (10) and changed wording
slightly in provision re due date of loan and changed per cent of loan which must be current balance to avoid classification
as loan in Subsec. (11) from 66.66% to 75% of property's value; 1965 acts changed mile limit on loans outside state from
25 to 50 from home office of lending institution in Subsec. (1) and added Subdiv. (b) in that Subsec. re first mortgages,
increased dollar limit on loans from $20,000 to $30,000 and bank's loan limit from 25% to 35% of assets in Subsec. (15)
and deleted requirement that loan be approved by administrator of veterans' affairs beforehand, substituted "partially
guaranteed" loans for "portions of loans guaranteed" in Subsec. (7), allowed loans for 90% rather than 80% of real estate's
value in Subsec. (11) and increased maximum amount from $20,000 to $25,000 in Subdiv. (a), added provision re copy
of sales agreement in Subdiv. (c) and required owner's residency in Subdiv. (e) of that Subsec., deleted requirement in
Subsec. (17) that bank commissioner approve agreements between participating banks and allowed any "qualified" bank
to be servicing agent "whether or not it is a participating bank", deleted limit on individual loan of the greater of $20,000
or 0.5% of bank's assets and, in Subsec. (5) replaced $15,000 limit on loan to one entity with new limits depending on
whether loan is to one entity or for parcel of land; 1967 acts repealed Subsec. (6) re guaranties for loans, renumbering as
necessary, made Subsec. (11)(e) applicable with respect to condominiums, substituted "greater" for "less" in provision re
total of advances under Subsec. (13) and deleted references to state bank and trust companies and their savings departments
throughout section; 1969 acts included savings and loan associations and building and loan associations as qualified banks
in Subsec. (16)(d)(2), deleted requirement that loans exceeding 70% of assets be insured by FHA or guaranteed under
Servicemen's Readjustment Act of 1944 in Subsec. (6), changed period for final payment from 25 to 30 years and first
payment from 18 to 24 months after issuance in Subsec. (9), changed loan limit from $25,000 to $35,000, total limit on
bank loans from 10% to 25% of assets, period for final payment from 25 to 30 years and first payment from 1 year to 24
months in all cases (where previously first payment date depended on type of loan) in Subsec. (10), inserted new Subsec.
(12) and renumbered as necessary and added Subsecs. (18) and (19), inserting references as necessary in Subsecs. (9) and
(10); 1971 act changed maturity date in Subsec. (1)(b) to 10 years; 1972 act applied Subsec. (17) to "lenders" rather than
qualified banks and qualified participating banks and increased limit in Subdiv. (b) from 5% to 10% of assets, restricting
savings bank interests above 5% of assets to residential real estate; P.A. 73-167 rephrased Subsec. (15) and deleted $30,000
limit on individual loans; P.A. 73-224 increased limit in Subsec. (10)(a) from $35,000 to $45,000; P.A. 73-669 specified
permission to invest in loans secured by first mortgage which savings banks may invest in under Subsec. (15); P.A. 74-62
deleted requirement that residential property be "detached" dwellings in Subsec. (10)(e); P.A. 74-101 changed percentage of
assets which may be lent in Subsec. (5) from 1% to 2%; P.A. 75-56 deleted $45,000 limit on loans in Subsec. (10) and
provision requiring that loans be secured by mortgage on fully-completed, single-family residence within 50 miles of
association's place of business; P.A. 75-200 changed loan limit from 75% to 80% of real estate's value and period for final
payment from 30 to 42 years in Subsec. (9), similarly changed final payment period in Subsec. (10) and changed 10% and
5% limits in Subsec. (17)(b) to 25% and 10%, respectively; P.A. 76-28 changed percentage of property's value in Subsec.
(10)(a) from 75% to 80%; P.A. 76-33 repealed Subsec. (6) re total investment limit; P.A. 77-74 allowed appraisal by one
person where previously at least two were required in Subsecs. (2) and (4); P.A. 77-614 placed banking commissioner and
insurance commissioner within the department of business regulation and made their respective departments divisions
within that department, effective January 1, 1979; P.A. 78-121 made technical changes, deleting reference to repealed
Subsec. (6) in Subsec. (18) and revising reference to Subsec. (10) in Subsec. (19); P.A. 79-75 changed limit on interests
of savings banks in Subsec. (17)(b) from 25% to 60% of assets and deleted restriction re savings banks' interests in mortgage
loans whereby all amounts over 10% of assets must be in residential real estate; P.A. 79-126 added "notwithstanding"
clause in Subsec. (7) and removed provision limiting deferral of amortization to cases where, after reappraisal, principal
indebtedness is 50% or less of property's value; P.A. 80-482 restored banking and insurance divisions as independent
departments and abolished the department of business regulation; P.A. 81-120 amended Subsec. (1) to delete the requirement that loans must be secured by a first mortgage and to permit loans to be secured by a mortgage subordinate to another
mortgage if the real estate is residential and the amount of the loan does not exceed certain limits, amended Subsec. (3) to
provide that the real estate may be encumbered by permissible prior mortgages, amended Subsec. (14) to delete the requirement that loans pursuant to the Servicemen's Readjustment Act be secured by a first or second mortgage, amended Subsec.
(15) to delete the requirement that loans secured by mortgages on real estate outside the state must be secured by first
mortgages, and amended Subsec. (17) to delete the requirement that participation loans secured by a mortgage on real
estate located anywhere in the United States must be secured by a first mortgage; P.A. 81-391 added Subsec. (20) permitting
the accrual of interest on mortgage loans and the addition of such accrued interest to the mortgage debt; P.A. 85-368 and
P.A. 85-379 amended Subsec. (10) to increase from 25% to 35% the aggregate amount of assets a savings bank may invest
in uninsured mortgage loans up to 90% of real estate value; P.A. 85-368 also added Subsec. (21) re the granting of
unrestricted mortgage loans up to 90% of real estate value, amending Subsec. (11) to refer to Subsec. (21), and P.A. 85-379 also repealed Subsec. (5); P.A. 86-268 amended Subsec. (9) and (10) to authorize and validate mortgage payment
schedules provided such schedule required at least semiannual payments; (Revisor's note: Pursuant to P.A. 87-9 "banking
department" was changed editorially by the Revisors to "department of banking"); P.A. 90-21 amended Subsec. (15) to
require loans secured by a mortgage on real estate located outside of the state which exceed 10% of the assets of the savings
bank and exceed 80% of the value of the real estate to be insured or guaranteed; P.A. 91-357 made technical changes; P.A.
92-12 redesignated Subsecs., Subdivs. and Subparas. and made technical changes; P.A. 94-122 added a new Subsec. (a)
defining "mortgage loan", renumbered former Subsec. (a) as Subsec. (b), deleted former Subsec. (a)(2) re savings banks'
mortgage loans, deleted former Subsec. (a)(3) referring to leaseholds as mortgages, renumbered former Subsec. (a)(4) as
Subdiv. (2) and allowed subordinate liens in connection with all residential loans, nonresidential loans with a loan-to-value
ratio of less than 50% and other nonresidential loans as long as all such loans do not in the aggregate exceed 25% of the bank's
equity capital and loss reserves, renumbered former Subsec. (b) as Subsec. (c) and included "dishwashing equipment" as
qualifying household equipment, renumbered former Subsec. (c) as Subsec. (d) and broadened and made uniform the
exemptions to the requirement that real estate be unencumbered and required a satisfactory certificate of title or other
suitable form of title review for all mortgage loans, renumbered former Subsec. (d) as Subsec. (e) and allowed real estate
to be "otherwise suitably evaluated" before a loan is made and required all banks to adopt an appraisal policy, renumbered
former Subsecs. (e) and (f) as Subsecs. (f) and (g) and clarified that the calculation of all loan-to-value ratios must include
any prior mortgages or liens, deleted former Subsec. (g) re restrictions for savings banks' mortgage loans, deleted the
requirements that savings banks' escrow tax and insurance payments on loans between 80% and 90% and that loans with
between 80% and 90% loan-to-value ratios make up no more than 35% of the banks' assets in Subsec. (h), added exemptions
(A) through (D) to the requirement that mortgage loans be amortized in Subsec. (h), consolidated existing exemptions to
loan-to-value limits for government guaranteed loans and added exemptions parallel to those allowed under FDIC rules
in new Subsec. (i), renumbered former Subsec. (i) as Subsec. (j) and made uniform the provisions for construction loans,
deleted former Subsec. (j), made uniform the provisions re loans insured by the FHA in Subsec. (k), made uniform the
provisions re veterans' loans and deleted references to savings banks' geographic limits and an outdated aggregate limit
on residential loans in Subsec. (l), deleted Subsec. (m) re a 35% of assets limit on savings banks' out-of-state mortgage
loans and other limits, renumbered former Subsec. (n) as Subsec. (m) and made uniform powers concerning future advances,
renumbered former Subsec. (o) as Subsec. (n) and removed the limit on savings banks' participations of 60% of assets,
removed geographic limits on savings banks' participation loans, deleted the requirement that there be no subordinate
interests in savings banks' participation loans and clarified that a service charge is optional, renumbered former Subsecs.
(p) and (q) as Subsecs. (o) and (p), added new Subsec. (q), deleted former Subsec. (s) re loan leeway provisions, added
new Subsec. (s), and made technical changes, effective January 1, 1995; Sec. 36-99 transferred to Sec. 36a-261 in 1995;
P.A. 95-70 amended Subsec. (b)(2) re mortgages held by a person other than a Connecticut bank, re the subsequent
exclusions from the aggregate limit, and to make a technical correction in Subpara. (B)(iii), added Subsec. (d)(3)(D) re
material adverse risk, amended Subsec. (e) to require approval of appraisers, to add the reference to management and board
committees and agent, and to require the appraisal policy to include procedures for approving and selecting appraisers,
amended Subsec. (i)(9) to add "or loan programs", to add the reference to management and board committees, and to add
"real estate" before "collateral" and amended Subsec. (s) to add the reference to management and board committees and
to add provision re exclusion from the percentage of asset limitations, effective May 31, 1995; P.A. 96-44 amended Subsec.
(i)(9)(C) to reference the percentage of assets limitation in Subsec. (s), amended Subsec. (s) re certain loans limited to 8%
of the bank's assets, and made other changes re bank investments; P.A. 11-50 amended Subsec. (j) to delete "fifty per cent
or" and "whichever is the greater" re maximum ratio of amount loaned to then total value.
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Sec. 36a-263. Insider loans. (a) As used in this section, "executive officer" has
the meaning given to such term in Section 215.2 of Federal Reserve Board Regulation
O, 12 CFR Part 215, as from time to time amended. With the exception of Section 215.7
of Federal Reserve Board Regulation O, 12 CFR Part 215, as from time to time amended,
Connecticut banks are subject to and shall comply with the restrictions contained in 12
CFR Section 337.3, as from time to time amended, and no executive officer, director
or principal shareholder of a Connecticut bank or any of its affiliates shall knowingly
receive, or knowingly permit any of such person's related interests to receive, from
a Connecticut bank, directly or indirectly, any extension of credit that violates such
restrictions. No executive officer, director, employee, agent or other person shall participate in any conduct of the affairs of the bank that violates this subsection.
(b) If the commissioner finds it necessary in the interests of the safety and soundness
of Connecticut banks and of depositors, the commissioner may adopt regulations, in
accordance with chapter 54, providing for further requirements governing extensions
of credit to directors, executive officers, principal shareholders, and the related interests
and associates of such persons.
(c) The commissioner may require Connecticut banks to file periodic reports with
the commissioner regarding the indebtedness owing to such banks by directors, executive officers and principal shareholders of the respective banks, or any related interests
or associates of such persons. These reports shall include such information as the commissioner may require.
(d) The commissioner may take enforcement action with respect to violations of
this section.
(P.A. 94-122, S. 120, 340; P.A. 03-259, S. 19; P.A. 11-50, S. 6.)
History: P.A. 94-122 effective January 1, 1995; P.A. 03-259 amended Subsec. (a) by defining "executive officer" and
adding prohibitions on extension of credit that violates restrictions, and participation in conduct of affairs of bank that
violates Subsec. (a); P.A. 11-50 amended Subsec. (a) to revise references to federal regulations.
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Sec. 36a-276. Investments in equity securities and equity mutual funds. (a) As
used in this section: (1) "Equity security" means any stock or similar security, certificate
of interest or participation in any profit-sharing agreement, preorganization certificate
or subscription, transferable share, voting trust certificate or certificate of deposit for
an equity security, limited partnership interest, interest in a joint venture or certificate
of interest in a business trust; or any security convertible, with or without consideration,
into such a security, or carrying any warrant or right to subscribe to or purchase such a
security; or any such warrant or right; or any put, call, straddle or other option or privilege
of buying such a security from or selling such a security to another without being bound
to do so, but excludes a debt mutual fund, as defined in section 36a-275, and an equity
mutual fund; and (2) "equity mutual fund" means a partnership interest in, shares of
stock of, units of beneficial interest in or other ownership interest in any one investment
company which is registered under the Investment Company Act of 1940, as from time to
time amended, commonly described as mutual funds, money market funds, investment
trusts or business trusts, but excludes a debt mutual fund, as defined in section 36a-275.
(b) In addition to other investments authorized by sections 36a-275 to 36a-277,
inclusive, and 36a-280, any Connecticut bank may purchase or hold for its own account
equity securities and equity mutual funds, without regard to any other liability to the
Connecticut bank of the issuer of such equity securities and equity mutual funds, provided: (1) The total amount of equity securities and equity mutual funds of any one
issuer purchased or held by a Connecticut bank or for a Connecticut bank's account
may not exceed, at any time, twenty-five per cent of its total equity capital and reserves
for loan and lease losses; and (2) the total amount of any equity securities and equity
mutual funds purchased or held by a Connecticut bank or for a Connecticut bank's
account pursuant to this subsection may not exceed, at any time, twenty-five per cent
of its assets.
(c) In addition to other investments authorized by sections 36a-275 to 36a-277,
inclusive, and 36a-280, any Connecticut bank may purchase or hold for its own account,
without regard to any other liability to the Connecticut bank of the issuer, ten per cent
or more of the equity securities, including convertible securities, of a bank, out-of-state
bank or holding company in accordance with law.
(d) In addition to other investments authorized by sections 36a-275 to 36a-277,
inclusive, and 36a-280, any Connecticut bank, with the approval of the commissioner,
may purchase or hold for its own account, without regard to any other liability to the
Connecticut bank of the issuer, a controlling interest in a corporation or other entity,
the functions of which are limited to one or more of the functions which the bank may
carry on directly in the exercise of its express or incidental powers. For purposes of this
subsection and subsection (e) of this section, a "controlling interest" means at least fifty-one per cent of the equity securities issued by the corporation or other entity, unless the
commissioner determines that under the circumstances, a lesser percentage constitutes
effective working control of the corporation or other entity.
(e) The bank shall notify the commissioner, in writing, twenty-four hours prior to
making any investment under subsections (b) and (c) of this section which would result
in such bank having invested in the aggregate in twenty-five per cent or more of the
equity securities of a corporation. Notwithstanding the provisions of this subsection,
any investment in a controlling interest in a corporation or other entity, the functions
of which are limited to one or more of the functions that the bank may carry on directly
in the exercise of its express or incidental powers, shall be made in accordance with
subsection (d) of this section.
(P.A. 94-122, S. 125, 340; P.A. 95-70, S. 4, 8; 95-155, S. 21, 29; P.A. 96-44, S. 5; P.A. 11-50, S. 7.)
History: P.A. 94-122 effective January 1, 1995; P.A. 95-70 amended Subsec. (b)(2) by deleting reference to laws and
supervisory authority governing the bank and by adding a holding company to the list, amended Subsec. (c) by deleting
reference to Subsec. (e), amended Subsec. (d) by changing "ten" to "fifteen", and by renumbering the Subdiv. and adding
Subdiv. (3) re determination of prudence, amended Subsec. (e) by adding references to Subsec. (b)(1) and (c), by deleting
reference to time of investment re the rating, by deleting reference to the opinion of the bank and instead requiring a
determination by the governing board re prudence, by deleting the sentence re review and retention of investments that
are not prudent, by adding a new Subdiv. (2) re bank's investment policy, and by renumbering Subsec. (e)(2) to Subsec.
(f), amended Subsec. (f) by deleting references to Subsec. (e), (f)(1)(A) and (f)(1)(B), by adding references to Subsec.
(d)(3) and (e)(1), and by adding the provision re divestiture, effective May 31, 1995; P.A. 95-155 amended Subsec. (a)(2)
to add proviso re five-year requirement, to add references to the general statutes and to delete the requirement re approval,
effective June 27, 1995; P.A. 96-44 replaced prior provisions re investments in equity securities with new provisions, and
added provisions re equity mutual funds and re controlling interests in entities carrying on functions within bank powers;
P.A. 11-50 amended Subsec. (d) to apply definition of "controlling interest" to Subsec. (e) and amended Subsec. (e) by
adding provision re investment in controlling interest in corporation or other entity, the functions of which are limited to
one or more of the functions the bank may carry on directly, effective June 13, 2011.
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