Missouri Code of State Regulations › Title 20 - DEPARTMENT OF COMMERCE AND INSURANCE › Division 1140 - Division of Finance › Chapter 2 - Banks and Trust Companies › Section 20 CSR 1140-2.065 - Bank Investment in Real Estate Development Corporations

Current through Register Vol. 49, No. 14, July 15, 2024
PURPOSE: Senate Bill 52 was approved by the governor
				  and took effect on September 28, 1985. The bill amended section
				  362.106, RSMo
				  to permit banks and trust companies to make certain investments in real estate
				  development corporations. This rule establishes guidelines under section
				  362.106, RSMo
				  which permit banks and trust companies to make certain investments in real
				  estate development corporations and clarifies unclear provisions of the
				  law.
PUBLISHER'S NOTE: The secretary of state has
				  determined that the publication of the entire text of the material which is
				  incorporated by reference as a portion of this rule would be unduly cumbersome
				  or expensive. Therefore, the material which is so incorporated is on file with
				  the agency who filed this rule, and with the Office of the Secretary of State.
				  Any interested person may view this material at either agency's headquarters or
				  the same will be made available at the Office of the Secretary of State at a
				  cost not to exceed actual cost of copy reproduction. The entire text of the
				  rule is printed here. This note refers only to the incorporated by reference
				  material.
(1) For purposes of
				this rule, a real estate development corporation (REDC) shall mean any
				corporation whose activities are limited to managing or owning agricultural
				property, subdividing and developing real property and building residential
				housing or commercial improvements on that property and owning, renting,
				leasing, managing, operating for income and selling property which the REDC has
				developed and improved.
(2) A bank
				may invest in the stock of an REDC; provided-
(A) Within thirty (30) days of investing, the
				bank advises the office of the commissioner of finance of the name of the REDC,
				the amount of this investment and related loans, lines of credit and guarantees
				and the location and general description of the principal projects of the
				REDC;
(B) The REDC shall not engage
				in a joint venture with any executive officer or principal shareholder of the
				bank or any related interest of the bank as those terms are defined in
				Regulation O of the Federal Reserve Board ( 12 CFR 215 );
(C) The bank's total of investments and
				extensions of credit in all REDCs shall not exceed five percent (5%) of the
				bank's assets;
(D) The bank's total
				equity investment in any one (1) real estate project shall not exceed twenty
				percent (20%) of its unimpaired capital; for purposes of this subsection, the
				investments in all REDC joint ventures on a given project shall be
				aggregated;
(E) The real estate
				owned by the REDC shall be located-1) in the same county or a county adjoining
				that county where the main banking house of the bank is located or 2) in the
				bank's local community as defined by the Community Reinvestment Act (
				12 U.S.C.
				2901 ); provided, however, that this real
				estate may be located anywhere in Missouri or in any state adjoining Missouri
				with the prior approval of the director of the Division of Finance;
				and
(F) The REDC shall obtain
				proper documentation and perfected security interests on all
				projects.