808 KAR 1:080. Investments in bank service corporations by state-chartered banks.

 

      RELATES TO: KRS 286.3-100, 286.3-103

      STATUTORY AUTHORITY: KRS Chapter 13A, 286.1-020(3)

      NECESSITY, FUNCTION, AND CONFORMITY: National banks are permitted to invest in bank service corporations which allow banks to achieve economies of scale in performing certain banking functions. Such investments are neither expressly prohibited nor expressly allowed for state-chartered institutions. KRS 286.1-020(3) authorizes the executive director to prescribe administrative regulations authorizing banks or trust companies to engage in any banking activity in which they could engage were they operating as national banks. The purpose of this administrative regulation is to grant competitive parity to state-chartered banks.

 

      Section 1. Any state-chartered bank is hereby authorized to purchase for its own account shares of stock of a bank service corporation as outlined in the Bank Service Corporation Act (12 U.S.C. 1861 et seq.) and any amendments thereto, provided that such bank service corporation is properly organized under KRS Chapter 271B and is owned by one (1) or more insured banks; and further provided that the total amount of any such investment shall at no time exceed ten (10) per centum of the insured bank's paid-in unimpaired capital and surplus and no insured bank shall invest more than five (5) per centum of its total assets. (8 Ky.R. 34; eff. 8-5-81; Am. 12 Ky.R. 44; eff. 8-13-85; TAm eff. 4-17-2007.)