Ohio § 1109.54

§ 1109.54.

(A) A state bank and its subsidiaries may engage in a covered transaction with an affiliate

only if both of the following apply: (1) The aggregate amount of covered transactions by the bank and its subsidiaries with

the particular affiliate will not exceed ten per cent of the bank's capital. (2) The aggregate amount of all covered transactions by the bank and its subsidiaries

with all of the bank's affiliates will not exceed twenty per cent of the bank's capital. (B) A state bank and its subsidiaries may not purchase a low quality asset from an affiliate

unless the bank or its subsidiary, pursuant to an independent credit evaluation, committed

itself to purchase the asset prior to the time the asset was acquired by the affiliate. (C) Any covered transactions and any transactions between a state bank and an affiliate

shall be on terms and conditions that are consistent with safe and sound banking practices. (D) Except as provided in division (E)(4) of this section, any loan or extension of credit

to, or guarantee, acceptance, or letter of credit issued on behalf of, an affiliate

by a state bank or its subsidiary shall be secured at the time of the transaction

by collateral having a market value equal to any of the following: (1) One hundred per cent of the amount of the loan or extension of credit, guarantee,

acceptance, or letter of credit, if the collateral is composed of any of the following: (a) Obligations of the United States or its agencies or instrumentalities; (b) Obligations fully guaranteed as to principal and interest by the United States or

its agencies or instrumentalities; (c) Notes, drafts, bills of exchange, or bankers' acceptances described in division (B) or (C) of section 1109.17 of the Revised Code ; (d) A segregated, earmarked deposit account with the bank. (2) One hundred ten per cent of the amount of the loan or extension of credit, guarantee,

acceptance, or letter of credit, if the collateral is composed of obligations of any

state or political subdivision of any state; (3) One hundred twenty per cent of the amount of the loan or extension of credit, guarantee,

acceptance, or letter of credit, if the collateral is composed of other debt instruments,

including receivables; (4) One hundred thirty per cent of the amount of the loan or extension of credit, guarantee,

acceptance, or letter of credit, if the collateral is composed of stock, leases, or

other real or personal property. (E) For purposes of division (D) of this section: (1) Any collateral that is subsequently retired or amortized shall be replaced by additional

eligible collateral as needed to keep the percentage of the collateral value relative

to the amount of the outstanding loan or extension of credit, guarantee, acceptance,

or letter of credit equal to the minimum percentage required at the inception of the

transaction. (2) A low quality asset is not acceptable as collateral for a loan or extension of credit

to, or guarantee, acceptance, or letter of credit issued on behalf of, an affiliate. (3) The securities issued by an affiliate of the state bank are not acceptable as collateral

for a loan or extension of credit to, or guarantee, acceptance, or letter of credit

issued on behalf of, that affiliate or any other affiliate of the bank. (4) The collateral requirements set forth in divisions (D) and (E)(1) of this section

do not apply to any acceptance that is fully secured by either attached documents

or other property that is involved in the transaction and that has an ascertainable

market value.