Okla. Admin. Code § 85:10-11-6

Current through Vol. 42, No. 4, November 1, 2024

Section 85:10-11-6 - Loans and investments in other banks

(a)Application to trust companies. The provisions of this section are made applicable to trust companies in the same manner as to banks and each reference to "bank" or "banks" shall include "trust company" or "trust companies" as if so worded.

(b)Limitation and waiver. The following limitations shall apply to all state chartered banks as they relate to their deposits, loans and investments in other banks (whether state or national), providing, however, that these limitations can be exceeded upon specific authorization in writing from the Commissioner for a specific authorized period of time when in the opinion of the Commissioner conditions warrant due to seasonal influx, extraordinary large items and temporary situations. Request for waiver of the limitation must be made by the selling or depositing bank on an individual basis, stating reasons for request and time of waiver requested. As these rules relate to Federal Funds and Term Federal Funds, the limitation shall not apply if those funds are secured by at least 100% market value of securities which can be legally held by a state chartered bank.

(c)Definitions. The following words and terms, when used in this section shall have the following meaning, unless the text clearly indicates otherwise:

(1) "Buying bank/depository bank" means the bank receiving the funds.

(2) "Certificate of deposit" means those deposits placed in a bank and evidenced by a written instrument or other record providing the funds shall remain on deposit for a given period of time (at least seven days) and draw interest thereon at a given rate of interest.

(3) "Demand balance" means those deposits placed in a bank on which no interest is payable and are withdrawable on demand.

(4) "Federal funds" means a loan from one bank to another on which the buying bank shall pay interest on a daily basis and the funds shall be available to the selling bank any day.

(5) "Selling bank/depositing bank" means bank from which the funds came.

(6) "Term federal funds" means a loan from one bank to another, on which the buying bank shall pay interest on a daily basis, or any other basis, and the funds shall be available to the selling bank at a predetermined future date.

(d)Total deposits. No state chartered bank shall at any time have on deposit at any other bank an amount in excess of the depository bank's capital and surplus accounts (exclusive of debentures, undivided profits and reserve accounts). The permissible amount should then be reduced by those funds covered under other provisions of this section.

(e)Fed funds. No state chartered bank shall at any time have sold in the form of federal funds to any other bank an amount in excess of twice the selling bank's capital, surplus and undivided profits accounts exclusive of debentures and reserves, as reflected on the most recent report of condition. The permissible amount should then be reduced by those funds covered under subsection (f) of this section, if any, but in no event in excess of buying bank's capital and surplus.

(f)Term fed funds and/or certificates of deposit. No state chartered bank shall at any time have sold to any other bank in the form of term federal funds, and/or have deposited in any other bank in the form of a certificate of deposit, or any other interest bearing deposit, an aggregate amount in excess of the selling or depositing bank's capital, surplus and undivided profits accounts, exclusive of debentures and reserves as reflected on the most recent report of condition.

(g)Capital debentures of bank. No state chartered bank shall at any time invest its funds in the capital debenture issue of another bank in an amount of more than its lending limit, and capital debentures so invested in shall be qualified as ""investment securities" as set forth in 85:10-11-2.

(h)Concentration of funds. Compliance with these rules does not preclude the Department from concluding that deposits in a single institution could be considered a concentration of funds and placing these comments in the reports of examination to be called to the attention of an institution's board of directors.

Okla. Admin. Code § 85:10-11-6

Amended at 25 Ok Reg 1064, eff 5-25-08