04 NCAC 16K .0109. SELF‑DEALING

(a)  Unless authorized by the instrument creating the relationship, or by court order, property held by a savings institution as fiduciary shall not be sold or transferred, by loan or otherwise, to the savings institution or its affiliates; or the directors, executive officers, or employees of either of them; or to individuals with whom there exists such a connection, or organizations in which there exists such an interest, as might affect the exercise of the best judgment of the savings institution, in selling or transferring such property, except:

(1)           In cases in which the savings institution has been advised by its counsel in writing that it has incurred as fiduciary a contingent or potential liability and desire to relieve itself from such liability, such a sale or transfer may be made with the approval of the Board of Directors and the Administrator, provided that, in all such cases, the savings institution, upon the consummation of the sale or transfer, shall make reimbursement in cash at no loss to the account;

(2)           As provided in the laws and regulations governing collective investment;

(3)           When required by the Administrator.

(b)  If the purchase or retention of stock or obligations of the savings institution is authorized by the instrument creating the relationship, or by court order, it may exercise rights to purchase its own stock, or securities convertible into its own stock, when offered pro rata to stockholders.  When the exercise of rights or receipt of a stock dividend results in fractional share holdings, additional fractional shares may be purchased to complement the fractional shares so acquired.  In elections of directors, a savings institution's share held by the savings institution as sole trustee, whether in its own name as trustee or in the name of its nominee, may not be voted by the registered owner unless, under the terms of the trust, the manner in which such shares shall be voted may be determined by a donor or beneficiary of the trust and the donor or beneficiary actually directs how the shares will be voted.

 

History Note:        Filed as a Temporary Amendment Eff. October 2, 1991 for a period of 180 days to expire on

March 31, 1992;

Statutory Authority G.S. 54B‑55; 54B‑77; 54C‑53; 54C‑146;

Eff. November 1, 1982;

Amended Eff. February 15, 1992.