October 27, 1978

Dear Mr. ________:

This is in response to your letter of August 31, 1978, in which you requested a ruling as to the permissibility of ________ investing $100, 000. 00 in shares of the stock of Oakland City Center Hotel Company, which has as one of its primary purposes the redevelopment of downtown Oakland.

California Financial Code Section 760.1 provides that a bank may invest in shares of the stock of a corporation which is engaged primarily in civic, public, or social welfare activities. Corporations engaged in community development project are considered to be engaging in civic or public activities for purposes of this section. Therefore, it is proper for ________ to invest in shares of the stock of such corporations.

Code Section 760.1 limits the amount invested in this project to 2% of the Bank’s capital and surplus, as long as the total amount invested under Section 760. 1 does not exceed 5% of the Bank’s capital and surplus. Clearly, this $100,000. 00 investment represents an amount less than 2% of ________ capital and surplus. If, therefore, this investment will not raise the total amount invested pursuant to Section 760. 1 above 5% of the Bank’s capital and surplus, the investment is permissible.

If you have any further questions in regard to this matter, please do not hesitate to call.

Very truly yours,

Superintendent of Banks

MM: j o

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Last updated: Jun 28, 2019 @ 12:19 pm