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Maryland Code, Financial Institutions § 5-503

Current as of January 01, 2025 | Updated by Findlaw Staff

(a) A banking institution may buy and hold real property only as provided in this section.

(b)(1) Subject to the limitations in paragraph (3) of this subsection, a banking institution may buy or hold any real property that is necessary for the convenient transaction of its business.

(2) In addition to its offices, this property may include:

(i) A parking lot that the banking institution provides, with or without charge, primarily for the use of its customers; and

(ii) Any rental space that is located in the bank building or on adjoining land.

(3) Except as provided in paragraph (4) of this subsection, a banking institution may not invest in its bank building and furnishings more than an amount that equals 50 percent of its unimpaired capital and surplus or guaranty fund.

(4) If a banking institution is rated CAMELS 1 or 2 and remains well capitalized in accordance with the requirements of the Federal Deposit Insurance Act,  1 it may invest in its bank building and furnishings an amount equivalent to 75 percent of its:

(i) Unimpaired capital, surplus, and undivided profits; or

(ii) Guaranty fund and undivided profits.

(c)(1) Subject to the limitations in paragraphs (2) and (3) of this subsection, a banking institution may hold any real property that the banking institution acquires:

(i) In satisfaction of a debt contracted in the course of its business; or

(ii) At sale on a judgment, decree, or mortgage foreclosure under a security that it holds.

(2) At a sale, a banking institution may not bid more than the amount of money that is necessary to satisfy the secured debts and costs.

(3) A banking institution:

(i) May not hold property acquired under this subsection for more than:

1. 8 years; and

2. Under conditions that the Commissioner sets, 2 additional years; and

(ii) Within 1 year after that period, shall:

1. Sell the property; or

2. Reduce the value of the property on its books to a value that the Commissioner approves.

1 Sept. 21, 1950, ch. 967, 1, 2, 64 Stat. 873, codified at 12 U.S.C.A. § 1811 et seq.
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Cite this article: FindLaw.com - Maryland Code, Financial Institutions § 5-503 - last updated January 01, 2025 | https://codes.findlaw.com/md/financial-institutions/md-code-fin-inst-sect-5-503/

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