2009 California Financial Code - Section 1210-1213 :: Article 1.5. Loan And Investment Limitations

1210.  (a) In this article and in Article 4 (commencing with Section
3860) of Chapter 22, "affiliate," when used with respect to a
specified person, means any person controlling, controlled by, or
under common control with, the specified person, directly or
indirectly, through one or more intermediaries.
   (b) "Control" has the meaning set forth in Section 700.
   (c) "Regulated corporation" means any corporation in which a bank
makes an equity investment and which the bank controls.
   (d) "Securities issued by a person" means any debt, equity, or
other security issued by a person, and any and all affiliates of that
person, issued for the benefit of that person or for the benefit of
an affiliate of that person.

1211.  (a) Subject to the limitations in Sections 1221 and 1330, a
bank may hold both obligations made by a person, and securities
issued by that same person.
   (b) The total amount of obligations and securities held by a bank
pursuant to subdivision (a) shall not exceed 25 percent of the sum of
the shareholders' equity, allowance for loan and lease losses,
capital notes and debentures of the bank.

1212.  Subject to prior approval by the commissioner and to any
limitations the commissioner may impose on an investment, the
limitations in subdivision (b) of Section 1211 and Section 1330 shall
not apply to investments by banks in securities of regulated
corporations.

1213.  Sections 1211 and 1330 shall not apply to investments held by
a bank prior to the operative date of this section. All
authorizations regarding investments by a bank issued by the
commissioner prior to the operative date of this section are
terminated.