CO Code § 11-105-302 (2021)
2021 Colorado Code|Title 11 - Financial Institutions|Article 105 - Banking Practices|Part 3 - Reserves, Loans, and Investments|§ 11-105-302. Loans, Acceptances, Investments, and Letters of Credit

 A state bank may make such loans, secured or unsecured, accept such drafts, make such investments, and issue such letters of credit as shall be permissible pursuant to rules promulgated by the banking board or otherwise permitted by this code. In promulgating such rules the banking board shall consider all relevant factors, including without limitation the policies set forth in section 11-101-102 .   History. Source: L. 2003: Entire article added with relocations, p. 1121, § 3, effective July 1.    Editor's note:   This section is similar to former § 11-7-102 as it existed prior to 2003.   ANNOTATION   Law reviews. For article, “Loan Documentation Clauses to Avoid Lender Liability”, see 19 Colo. Law. 2225 (1990).   Annotator's note. Since § 11-105-302 is similar to § 11-7-102 as it existed prior to the 2003 recodification of the “Colorado Banking Code”, articles 101 to 109 of title 11, and to repealed laws antecedent to CSA, C. 18, § 33, relevant cases construing those provisions have been included in the annotations to this section.   Reduction of capital stock and distribution of assets thus received is sale of own stock to bank. Where a bank reduced its capital stock by one-half and distributed assets of the bank amongst the stockholders equal to one-half the par value of the original stock, such a transaction was in effect a sale of one-half of the capital stock of the bank to itself, which is prohibited by law except in specified instances, and its agreement to pay for such stock is therefore in violation of its charter powers and cannot be enforced to the detriment of the rights of general creditors. Kassler v. Kyle, 28 Colo. 374 , 65 P. 34 (1901).   A cashier selling stock in a bank to such bank is liable for misappropriation of funds. Where the cashier of a bank handed in his resignation before the sale of stock in the bank to the bank, this was a mere subterfuge resorted to for the purpose of apparently changing his relations with the bank and he is therefore liable for the misappropriation of the assets of the bank to which he was a party in his official capacity independent of the ownership of the stock transferred. United Sec. Co. v. Ostenberg, 60 Colo. 249 , 152 P. 1163 (1915).   Where a bank put it in the power of the cashier to carry out a deal prohibited by this section, it should bear the loss, if he committed a wrong and damaged the defendant by improper methods, purporting to act in his official capacity. The bank should bear the loss rather than an innocent outsider, who undoubtedly had faith in the cashier because of his relations to the bank. Commercial Bank & Trust Co. v. Beach, 66 Colo. 226 , 180 P. 982 (1919).   Stockholders conveying bank's own stock to such bank hold assets received subject to rights of creditors. A stockholder who conveys his stock in a bank to such bank, or for a transfer of his stock knowingly receives therefor the funds and assets of the bank, holds the same subject to the prior rights of the creditors of the institution. United Sec. Co. v. Ostenberg, 60 Colo. 249 , 152 P. 1163 (1915).