86-1

March 7, 1986

Dear Mr: ________:

This is in response to your letter of February 12, 1986 requesting an interpretation of Sections 751.3 and 1220, regarding which prevails in determining the loan limitations of obligations of a subsidiary of ________.

Although Section 751.3 provides that investments, loans, and guarantees extended for the benefit of its subsidiary may be made up to 10% of the total assets of a bank, any extensions of credit (loans, guarantees, etc.) must comply with the loan limitations of Section 1220. Therefore, Section 751.3 does not preempt Section 1220.

Very truly yours,

LOUIS CARTER
Superintendent of Banks

By

JOHN R. FAGUNDES
Deputy Superintendent of Banks