March 15, 1995

Re: Guarantees by Foreign (Other Nation) Bank Offices

Dear M ________:

This follows your letter of December 28, 1994, and our subsequent telephone conversations. Further, this corrects my initial response to the issue reflected in your letter. In essence, you have asked whether a state licensed office of a foreign (other nation) bank is prohibited by state law from acting as a guarantee for a third party loan.

As we discussed, the State Banking Department (the “Department”) primarily administers Division 1 of the California Financial Code, commencing at Section 99 (the “Banking Law”), and our answer is limited accordingly. There is nothing in the Banking Law which prohibits an office of a foreign (other nation) bank from acting as a guarantee for a third party loan.

As we also discussed, federal law may impact on your client’s ability to act as a guarantor. You are advised to contact the Board of Governors of the Federal Reserve to obtain a definitive answer regarding the current status of federal law in this matter.

If you have any further questions regarding this matter, please feel free to contact me.

Very truly yours,

Acting Superintendent of Banks




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