                                 CODE OF VIRGINIA

INVESTMENT IN STOCK OR SECURITIES OF CONTROLLED SUBSIDIARY CORPORATIONS (§
6.2-885)

A. As used in this section and &#xA7;&#xA7; 6.2-886, 6.2-887, and 6.2-888:
			&#8220;Control&#8221; has the meaning assigned to it in &#xA7; 2 of the Bank
Holding Company Act of 1956 (12 U.S.C. &#xA7; 1841 et seq.).
			&#8220;Controlled subsidiary corporation&#8221; means a corporation that is
controlled by a bank organized under the laws of the Commonwealth, or by more
than one bank, at least one of which is organized under the laws of the
Commonwealth.

B. A bank may acquire, own, and hold the stock, securities, or obligations of
one or more controlled subsidiary corporations. Such investment in stock,
securities, or obligations, together with any investment of the bank in stock,
securities, or obligations of a bank service corporation, shall not exceed in
the aggregate 50 percent of the bank&#8217;s capital stock and permanent
surplus, without the permission of the Commission, which limit on investment
shall not include, but shall be in addition to, investment in (i) a real estate
subsidiary as provided in &#xA7; 6.2-873, (ii) the stock, securities, or
obligations of a building corporation under &#xA7; 6.2-870, and (iii) controlled
subsidiary corporations that are wholly owned by the bank.

C. A controlled subsidiary corporation shall not be authorized to (i) receive
deposits except as hereafter provided; (ii) engage in the trust business; or
(iii) conduct any business that is required under &#xA7; 13.1-620 to be
specifically stated in the articles of incorporation, except a controlled
subsidiary corporation may engage in the business of credit card operations,
leasing, safe deposit, factoring, credit bureaus, mortgage brokerage or
servicing, data processing, international banking and finance, and any other
function or business activity in which a bank might engage, except the receipt
of deposits, or the trust business. Subject to the foregoing limitations on the
businesses that a controlled subsidiary corporation is authorized to conduct,
and with the prior approval of the Commission and subject to such conditions as
the Commission may impose, a controlled subsidiary corporation may also engage
in any business that is authorized by statute, regulation, or official
interpretation for a subsidiary of a national bank or an out-of-state state bank
as defined in &#xA7; 6.2-836 to the extent such activity is financial in nature,
or incidental or complimentary to a financial activity, and is not otherwise
prohibited by state law. A controlled subsidiary corporation transacting
business as a real estate brokerage firm shall be governed by &#xA7; 6.2-888 and
be subject to the provisions of this section. A controlled subsidiary
corporation may charge and collect such finance charges and fees or interest
rates as are authorized to banks by the laws of the Commonwealth or as otherwise
authorized by Chapter 3 (&#xA7; 6.2-300 et seq.).

D. A controlled subsidiary corporation engaged solely in the business of
international banking and finance, and subject to the regulation and supervision
by the Board of Governors of the Federal Reserve System, shall not be prohibited
from receiving deposits or from taking any other action that any such regulated
international banking and finance institution is permitted to take.

E. The provisions of &#xA7; 6.2-874 relating to investment of funds in shares of
stock of another corporation shall be applicable to controlled subsidiary
corporations, except that a controlled subsidiary corporation may acquire, own,
and hold stock in a subsidiary corporation if a bank would be permitted to
directly acquire, own, or hold the stock hereunder. The provisions of &#xA7;
6.2-876 relating to loans to officers, directors, or employees of the bank shall
be applicable both to loans by the subsidiary to officers, directors, or
employees of the bank and to loans by the bank to officers, directors, or
employees of the subsidiary, with the approval of the board of directors of the
bank only being required for purposes of &#xA7; 6.2-876. The limitations of
&#xA7;&#xA7; 6.2-878 through 6.2-881 as they relate to appraisal value, maximum
term, and amortization on loans secured by real estate shall be applicable to
controlled subsidiary corporations. Notwithstanding any provisions of this
subsection to the contrary, the restrictions set out in &#xA7;&#xA7; 6.2-874
through 6.2-881 shall not be imposed upon any controlled subsidiary that has no
state banks as shareholders.

F. The provisions of &#xA7; 6.2-875 relating to limitations upon obligations of
any one borrower shall apply to the total obligations of any borrower in the
aggregate to the subsidiary corporation and to any bank or bank holding company
owning stock securities or obligations of such subsidiary corporation. The loan
limit of the subsidiary shall be computed by attributing to the subsidiary a pro
rata share of the lending limit of each bank stockholder prorated in accordance
with the percentage of stock owned by such bank. However, in the case of a
subsidiary, any of the stock, securities, or other obligations of which are
owned by a bank holding company, the loan limits of the subsidiary shall be
computed by attributing to the subsidiary a pro rata share of the lending limits
of all bank subsidiaries of such holding company, which share shall be prorated
based on the percentage of stock owned by the holding company and all subsidiary
banks thereof. In computing whether a bank or a subsidiary that is not wholly
owned is complying with its lending limit, the loans of the bank and the
subsidiary to any common borrower shall be aggregated on a basis pro rata to the
percentage of stock of the subsidiary owned by the bank. Such controlled
subsidiary corporation shall not otherwise be subject to the provisions of this
chapter except where it is expressly so provided. Notwithstanding any provisions
of this subsection to the contrary, the restrictions set out in &#xA7;&#xA7;
6.2-874 through 6.2-881 shall not be imposed upon any controlled subsidiary that
has no state banks as shareholders.

HISTORY: 1968, c. 270, § 6.1-58.1; 1978, c. 797; 1988, c. 296; 1993, c. 64;
1997, c. 277; 1999, c. 60; 2001, c. 508; 2003, cc. 536, 558; 2010, c. 794.