No national bank or State member bank shall invest in bank premises, or in the stock, bonds, debentures, or other such obligations of any corporation holding the premises of such bank, or make loans to or upon the security of any such corporation—

(1) unless the bank receives the prior approval of the Comptroller of the Currency (with respect to a national bank) or the Board (with respect to a State member bank);

(2) unless the aggregate of all such investments and loans, together with the amount of any indebtedness incurred by any such corporation that is an affiliate of the bank, is less than or equal to the amount of the capital stock of such bank; or

(3) unless—

(A) the aggregate of all such investments and loans, together with the amount of any indebtedness incurred by any such corporation that is an affiliate of the bank, is less than or equal to 150 percent of the capital and surplus of the bank; and

(B) the bank—

(i) has a CAMEL composite rating of 1 or 2 under the Uniform Financial Institutions Rating System (or an equivalent rating under a comparable rating system) as of the most recent examination of such bank;

(ii) is well capitalized and will continue to be well capitalized after the investment or loan; and

(iii) provides notification to the Comptroller of the Currency (with respect to a national bank) or to the Board (with respect to a State member bank) not later than 30 days after making the investment or loan.

For purposes of this section—

(1) the term “affiliate” has the same meaning as in section 221a of this title; and

(2) the term “well capitalized” has the same meaning as in section 1831*o*(b) of this title.

(Dec. 23, 1913, ch. 6, §24A, as added June 16, 1933, ch. 89, §14, 48 Stat. 184; amended Aug. 23, 1935, ch. 614, title II, §203(a), 49 Stat. 704; June 30, 1954, ch. 434, §2, 68 Stat. 358; Pub. L. 104–208, div. A, title II, §2206, Sept. 30, 1996, 110 Stat. 3009–405.)

**1996**—Pub. L. 104–208 inserted section catchline and amended text generally. Prior to amendment, text read as follows: “No national bank, without the approval of the Comptroller of the Currency, and no State member bank, without the approval of the Board of Governors of the Federal Reserve System, shall (1) invest in bank premises, or in the stock, bonds, debentures, or other such obligations of any corporation holding the premises of such bank, or (2) make loans to or upon the security of the stock of any such corporation, if the aggregate of all such investments and loans, together with the amount of any indebtedness incurred by any such corporation which is an affiliate of the bank, as defined in section 221a of this title, will exceed the amount of the capital stock of such bank.”

**1954**—Act June 30, 1954, inserted “together with the amount of any indebtedness incurred by any such corporation which is an affiliate of the bank, as defined in section 221a of this title”.

Section 203(a) of act Aug. 23, 1935, changed name of Federal Reserve Board to Board of Governors of the Federal Reserve System.

Functions vested by any provision of law in Comptroller of the Currency, referred to in this section, not included in transfer of functions to Secretary of the Treasury, see note set out under section 1 of this title.