LOANS ON OR PURCHASES BY INSTITUTIONS OF THEIR OWN STOCK; AFFILIATIONS.

SEC. 1207. LOANS ON OR PURCHASES BY INSTITUTIONS OF THEIR OWN STOCK; AFFILIATIONS. (a) Amendment to the Revised Statutes.—Section 5201 of the Revised Statutes of the United States (12 U.S.C. 83) is amended to read as follows: “SEC. 5201. LOANS BY BANK ON ITS OWN STOCK “(a) General Prohibition.—No national bank shall make any loan or discount on the security of the shares of its own capital stock. “(b) Exclusion.—For purposes of this section, a national bank shall not be deemed to be making a loan or discount on the security of the shares of its own capital stock if it acquires the stock to prevent loss upon a debt previously contracted for in good faith.”. (b) Amendments to the Federal Deposit Insurance Act.—Section 18 of the Federal Deposit Insurance Act (12 U.S.C. 1828) is amended— (1) by redesignating subsection (t), as added by section 730 of the Gramm-Leach-Bliley Act (Public Law 106–102; 113 Stat. 1476), as subsection (u); and (2) by adding at the end the following new subsection: “(v) Loans by Insured Institutions on Their Own Stock.— “(1) General prohibition.—No insured depository institution may make any loan or discount on the security of the shares of its own capital stock. 114 STAT. 3035 “(2) Exclusion.—For purposes of this subsection, an insured depository institution shall not be deemed to be making a loan or discount on the security of the shares of its own capital stock if it acquires the stock to prevent loss upon a debt previously contracted for in good faith.”.