Section 97. Power to purchase securities and stocks

Subject  to  the
  restrictions and limitations contained in this chapter, a bank or  trust
  company may invest in and have and exercise all rights of ownership with
  respect to:
    1.  Bonds,  notes,  debentures  and  other  obligations for payment of
  money, which are not in default as to either principal or interest  when
  acquired.
    2. Stocks of any city, county, town or village of this state which are
  not in default as to either principal or interest when acquired.
    3.  Stock of a federal reserve bank in the amount necessary to qualify
  for membership in such reserve bank.
    4. Stock of each of the following to an amount not in  excess  of  ten
  per  centum  of the capital stock, surplus fund and undivided profits of
  such bank or trust company:
    (a) Any safe deposit company which does business on premises owned  or
  leased by the bank or trust company or the vaults of which are connected
  with  or  adjacent  to an office of such bank or trust company; provided
  that the purchase and holding of such stock is first duly authorized  by
  resolution of the board of directors of the bank or trust company and by
  written approval of the superintendent, stating the number and amount of
  the  shares  which may be so purchased and held, excepting that the bank
  or  trust  company  may,   without   the   written   approval   of   the
  superintendent, acquire the stock owned by a former director of the safe
  deposit company at the time that he ceased to be a director. The bank or
  trust  company  may  not  pay, without the prior written approval of the
  superintendent, more for  such  stock  than  the  cost  thereof  to  the
  director.
    (b)  Any investment company qualified to exercise the powers specified
  in subdivision two of section five hundred eight of this chapter;
    (c) The Bank for International Settlements.
    4-a. Subject to such restrictions as the banking board may  prescribe,
  stock   or   other   equity   investments  in  subsidiary  corporations,
  partnerships, unincorporated associations, limited liability  companies,
  or  other  entities  engaged  in,  or  to  be organized to engage in the
  following activities:
    (a) To acquire and lease personal property under the  same  terms  and
  conditions  as  provided  in subdivision twelve of section ninety-six of
  this article;
    (b) To purchase accounts receivable as provided in subdivision one  of
  section ninety-six of this article;
    (c)  To  be  a  corporation  organized  pursuant  to the provisions of
  section twenty-five (a) of an act  of  congress  entitled  the  "Federal
  Reserve Act";
    (d)  To  own  or  operate  real  or personal property acquired through
  foreclosure or in settlement or reduction of debts due it;
    (e) To own or operate real  or  personal  property  for  use  as  bank
  premises; or
    (f)  To transact any other business in which the bank or trust company
  may engage directly.
    4-b. Common or preferred stock of any corporation created or  existing
  under  the  laws  of  the  United  States  or  of any state, district or
  territory thereof, or of the commonwealth of Puerto Rico, provided that:
  (a)  such  common  or  preferred  stock  is  registered  on  a  national
  securities  exchange,  as  provided  in an act of congress of the United
  States entitled the "Securities Exchange Act  of  1934",  approved  June
  sixth,  nineteen hundred thirty-four, as amended, or such other exchange
  or market system as the superintendent shall approve by regulation;  (b)
  the aggregate amount of all investments in common and preferred stock as

  permitted by this subdivision shall at no time exceed two percent of the
  assets  or  twenty percent of the capital, surplus and undivided profits
  of the bank or trust company, whichever is less, provided  however  that
  the  superintendent  may,  upon  the request of a bank or trust company,
  approve an increase in such  aggregate  amount  to  a  maximum  of  five
  percent of the assets or one hundred percent of the capital, surplus and
  undivided  profits  of  such  bank  or trust company, whichever is less,
  subject  to  any   limitations   or   conditions   prescribed   by   the
  superintendent;  (c)  the  aggregate  amount  of  all investments in the
  common  and  preferred  stock  of  any  one  issuer  pursuant  to   this
  subdivision,  together  with  the aggregate amount of all investments in
  the bonds, debentures, notes or other obligations of  such  issuer  made
  pursuant  to  paragraph  (i)  of  subdivision one of section one hundred
  three of this chapter, shall at no time exceed one percent of the assets
  or fifteen percent of the capital, surplus and undivided profits of  the
  bank  or  trust  company,  whichever  is  less; and (d) no bank or trust
  company shall at any time hold pursuant to this  subdivision  more  than
  two  percent  of the total issued and outstanding shares of stock of any
  one issuer.
    4-c. Subject to such restrictions as the banking board may  prescribe,
  stock  or other equity interest in one or more small business investment
  companies, as authorized  pursuant  to  the  provisions  of  an  act  of
  congress  entitled  "Small Business Investment Act of 1958," as amended,
  or in any entity established to invest solely  in  such  small  business
  investment  companies, except that in no event shall the total amount of
  such investments exceed five percent of the capital stock, surplus  fund
  and undivided profits of such bank or trust company.
    5.  So  much of the capital stock of, or any other equity interest in,
  any  other  corporations,  partnerships,  unincorporated   associations,
  limited  liability  companies,  or other entities as may be specifically
  authorized by the laws of this state or by  resolution  of  the  banking
  board,  or  by  regulations  promulgated  by  the  banking board, upon a
  three-fifths vote of all its members.
    The superintendent is authorized to adopt such rules  and  regulations
  as  shall permit banks and trust companies to make a loan which provides
  for receipt of shares of stock of or any other equity interest in, or  a
  share of the profits, income or earnings of, a borrower in consideration
  for making the loan.
    A bank or trust company may acquire stock or any other equity interest
  in  settlement  or  reduction  of  a  loan,  or  advance of credit or in
  exchange for an investment previously made in  good  faith  and  in  the
  ordinary  course  of  business,  where  such acquisition of stock or any
  other equity interest is necessary in order to minimize or avoid loss in
  connection  with  any  such  loan,  advance  of  credit  or   investment
  previously  made in good faith. A trust company may acquire stock or any
  other equity interest from any estate, trust or  fund  with  respect  to
  which  such  trust company is acting in a fiduciary capacity, if a claim
  is asserted or may be asserted against it with respect to  the  purchase
  or  retention of such stock or equity interest for such estate, trust or
  fund,  (a)  where  such  acquisition  by  the  trust  company  has  been
  authorized  or  directed by a court, or (b) where such trust company has
  been advised by its counsel in writing that it has incurred a contingent
  or potential liability with respect to the purchase or retention of such
  stock or equity interest and  such  trust  company  desires  to  relieve
  itself from such liability. Stocks or any other equity interest acquired
  pursuant to the provisions of this paragraph may be held for such period
  as the board of directors deems advisable.

    A  bank  or  trust  company  may  continue  to hold any bonds or other
  securities or stock which it holds in accordance with the provisions  of
  law at the time this act takes effect.
    No  bank  or  trust company shall purchase, acquire, or hold any stock
  of, or any other equity  interest  in,  any  corporation  or  any  other
  entity, except as provided in this section.