Limitations On Investments

RULES OF PROCEDURE FOR INVESTMENTS AND ACTIVITIES CHAPTER 0180-19 FOR STATE-CHARTERED BANKS AND THEIR SUBSIDIARIES (1) A bank may invest, in the aggregate up to seventy-five percent (75%) of its capital in the stock or purchase of the assets of other corporations, firms, partnerships or companies, including limited liability companies and limited liability partnerships that engage in certain approved activities. However, the Commissioner has determined, based upon safety and soundness concerns, that no bank shall invest more than twenty-five percent (25%) of its capital in any single corporation, firm, partnership or company, including a limited liability company or a limited liability partnership requiring an application and approval pursuant to Rule 0180-19-.04, Rule 0180-19-.05, or Rule 0180- 18-.10. (2) Based upon safety and soundness concerns a state-chartered bank that directly or indirectly engages in any Category II (Rule 0180-19-.04) activity is subject to the lending limitations of T.C.A. §45-2-1805 unless otherwise provided by this chapter. (3) If a single subsidiary engages in activities falling into more than one Category, (See Rules 0180-19- .04, 0180-19-.05 and 0180-19-.10) then the bank’s investment in that subsidiary shall be limited to the lowest applicable percentage of capital limitation.