Loans on and acquisitions of own stock prohibited

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    (a)    Except as necessary to prevent a loss on a loan previously made in good faith, a commercial bank may not:

        (1)    Make any loan secured by any of its outstanding capital stock; or

        (2)    Buy or hold any of its outstanding capital stock.

    (b)    If a commercial bank buys or holds any of its outstanding capital stock, the commercial bank shall sell the stock at public or private sale within:

        (1)    1 year after the date of acquisition; or

        (2)    Any longer period that the Commissioner authorizes.


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