2.59.601    CONDITIONS OF INVESTMENT

(1) A bank organized under the laws of Montana may invest in a wholly-owned agricultural credit corporation under the following conditions:

(a) The investment in shares of or loans to the agricultural credit corporation by a bank shall be limited to two times the legal lending limit of the bank, i.e., 40% of the bank's unimpaired capital and surplus plus 40% of the outstanding debentures or capital notes issued under the authority of 32-1-413 , MCA.

(b) Any loan or series of loans made to one borrower by the agriculture credit corporation (corporation) shall not exceed the lending limit of the bank.

(c) The directors of the corporation shall execute a resolution or adopt a bylaw which makes available all of the records of the corporation to the commissioner of financial institutions of Montana and his examining personnel without restriction.

(2) A bank operating under the laws of Montana may invest in an agricultural credit corporation owned by two or more investors under the same conditions listed in (1) if the bank owns 80% or more of the outstanding stock of the corporation. A bank owning less than 80% of the stock of the corporation must limit its investment to its statutory lending limit under the Montana Code Annotated and must follow the conditions in (b) (c) above.

(3) Any bank operating under the laws of Montana shall notify the commissioner of financial institutions of its intentions to invest in an agriculture credit corporation. If the bank does not receive from the commissioner within 30 days after he has received the above notice, a statement disapproving the investment for stated reasons, the bank may proceed with the investment in the agriculture credit corporation.

(4) For the purpose of this rule, an agricultural credit corporation is defined as a corporation organized to make available to banks the right to sell or rediscount loans available through the federal intermediate credit bank or any government agricultural lender.

(5) For the purpose of this rule, a loan means extensions of credit to agricultural producers or agribusinesses which are eligible for rediscount or sale to the federal intermediate credit bank or other government agency.

History: Sec. 32-1-362, MCA; IMP, Sec. 32-1-362, MCA; NEW, 1981 MAR p. 1185, Eff. 10/16/81; TRANS, from Commerce, 2001 MAR p. 1181.