General prohibition
No national bank shall make any loan or discount on the security of the shares of its own capital stock.
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.
Pub. L. 106–569, title XII, § 1207(a)114 Stat. 3034(R.S. § 5201; , , .)
Editorial Notes
Codification
act June 3, 1864, ch. 106, § 3513 Stat. 110section 38 of this titleR.S. § 5201 derived from , , which was the National Bank Act. See .
Amendments
Pub. L. 106–569section 192 of this title2000— amended section catchline and text generally. Prior to amendment, text read as follows: “No association shall make any loan or discount on the security of the shares of its own capital stock, nor be the purchaser or holder of any such shares, unless such security or purchase shall be necessary to prevent loss upon a debt previously contracted in good faith; and stock so purchased or acquired shall, within six months from the time of its purchase, be sold or disposed of at public or private sale; or, in default thereof, a receiver may be appointed to close up the business of the association, according to .”