Bill Text: MI HB5172 | 2011-2012 | 96th Legislature | Introduced
Bill Title: Financial institutions; banks; participation in business development corporations; authorize. Amends sec. 4304 of 1999 PA 276 (MCL 487.14304). TIE BAR WITH: HB 5169'11
Spectrum: Partisan Bill (Democrat 13-0)
Status: (Introduced - Dead) 2011-11-29 - Printed Bill Filed 11/14/2011 [HB5172 Detail]
Download: Michigan-2011-HB5172-Introduced.html
HOUSE BILL No. 5172
November 10, 2011, Introduced by Reps. Slavens, Meadows, Jackson, Brown, Segal, Liss, Barnett, Hovey-Wright, Lindberg, Townsend, Cavanagh, Switalski and Howze and referred to the Committee on Banking and Financial Services.
A bill to amend 1999 PA 276, entitled
"Banking code of 1999,"
by amending section 4304 (MCL 487.14304).
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 4304. (1) A bank shall not engage in a transaction with
respect to shares of the capital stock of a corporation unless
specifically authorized by this act or by order or declaratory
ruling of the commissioner under this act.
(2)
A bank may purchase and sell securities and stock upon on
the order of and for the account of a customer without recourse.
(3) A bank shall not make a loan on or discount the security
of the shares of its own capital stock unless the security is
necessary
to prevent loss upon on a debt previously contracted in
good faith.
(4) A bank may purchase or hold shares of its own stock if any
of the following apply:
(a) The bank is holding shares amounting to not more than 5%
of its common stock until disposed of in compliance with an
existing stock option plan.
(b) The purchase or holding of the shares is necessary to
prevent
loss upon on a debt previously contracted in good faith.
(c) The commissioner gives written approval to the bank to
purchase or hold shares for its own account.
(5) A bank may purchase and hold shares of stock or other
equity interests, having an aggregate purchase price not more than
10%
of its capital and surplus, of each 1 or more of any of the
following:
(a)
Small A small business investment companies company doing
business in this state and licensed under, or established under,
the
small business investment act of 1958, Public Law 85-699. ,
72
Stat.
689.
(b)
The Michigan A business development corporation
incorporated under the business development corporation act.
(c)
Corporations or partnerships A
corporation or partnership
authorized by title IX of the housing and urban development act of
1968,
Public Law 90-448. , 82 Stat. 547.
(d)
Business entities A
business entity whose primary purpose
is
to provide capital to banks , which banks that are largely owned
or controlled by individuals classified as racial minorities.
(e)
Open-end An open-end management investment companies
company registered with the securities and exchange commission
under
the investment company act of 1940, title I of chapter 686,
54
Stat. 789, 15 U.S.C. 15 USC 80a-1 to 80a-64, while the
portfolios
portfolio of the companies are company is restricted by
their
its investment policies, changeable only by vote of the
shareholders, to investments permitted to banks by order or
declaratory ruling of the commissioner.
(f)
Agricultural An
agricultural credit business entities
entity organized solely for the purpose of making loans to farmers
and ranchers for agricultural purposes, including the breeding,
raising, fattening, or marketing of livestock.
(g) The student loan marketing association established under
section
439 of part B of title IV of the higher education act of
1965,
Public Law 89-329, 20 U.S.C. 20
USC 1087-2.
(h)
Any class of voting securities of banks a bank, out-of-
state
banks bank, or national banks bank engaged
exclusively in
providing services to depository institutions or their officers,
directors,
employees, and customers, or a bank holding companies
company
that own or control such banks,
out-of-state banks, or
national
owns or controls any of those
banks if the stock of the
bank
holding companies company is owned exclusively, except to the
extent directors' qualifying shares are required by law, by
depository institutions and if all subsidiaries of the bank holding
companies
company engage exclusively in serving depository
institutions or their officers, directors, employees, and
customers.
(i)
Banking organizations or corporations A banking
organization or corporation chartered or incorporated under the
laws of the United States or of any state, territory, or
protectorate of the United States, and principally engaged in
international or foreign banking, either directly or through the
agency, ownership, or control of foreign banks.
(j)
Foreign banks A foreign
bank that are is not
engaged,
directly or indirectly, in any activity in the United States except
as, in the judgment of the commissioner, is incidental to the
international
or foreign business of the foreign banks bank.
(k)
Entities An entity that provide, and entities that
reinsure
provides insurance or
reinsures providers of , insurance.
(6)
Subject to the limitation based upon on capital and
surplus set forth in subsection (5), a bank may purchase for its
own account any of the following:
(a) Securities authorized by title IX of the housing and urban
development
act of 1968, Public Law 90-448. , 82 Stat. 547.
(b) Adjustable rate preferred stock and money market preferred
stock.
(c) Stock, bonds, or other obligations of a business and
industrial development company established under the provisions of
the Michigan BIDCO act, 1986 PA 89, MCL 487.1101 to 487.2001.
(7) This section does not limit or expand the investment
authority of a bank granted by any other section of this act.
Enacting section 1. This amendatory act does not take effect
unless Senate Bill No.____ or House Bill No. 5169(request no.
01519'11) of the 96th Legislature is enacted into law.
