32-1-422. Restriction on investment in corporate stock -- rulemaking authority. (1) Except as provided in subsections (2) and (3), a commercial or savings bank may not purchase or invest its capital or surplus or money of its depositors, or any part of either, in the capital stock of any corporation unless the purchase or acquisition of capital stock is necessary to prevent loss to the bank on a debt previously contracted in good faith. Any capital stock so purchased or acquired must be sold by the bank within 6 months after purchase or acquisition if it can be sold for the amount of the claim of the bank against it. All capital stock purchased or acquired must be sold for the best price obtainable by the bank within 1 year after purchase or acquisition, or if the stock is unmarketable, it must be charged off as an investment loss, which is equivalent to the stock's sale. A person or corporation violating any provision of this section shall forfeit to the state twice the nominal amount of the stock.
     (2) A bank may acquire and hold for its own account:
     (a) up to 20% of its capital and surplus in the capital stock of a bank service corporation organized solely for the purpose of providing services to banks;
     (b) shares of stock of a federal reserve bank, without limitation of amount; and
     (c) shares of stock in a Montana capital company or the Montana small business investment capital company within limits prescribed by the Montana Capital Company Act.
     (3) A bank may invest any amount up to the limit established by the department of its unimpaired capital and surplus in shares of stock of:
     (a) the federal national mortgage association;
     (b) the federal home loan mortgage corporation;
     (c) the federal agricultural mortgage corporation; and
     (d) other corporations created pursuant to acts of congress to meet the agricultural, housing, health, transit, educational, environmental, or similar needs of the nation when the department determines that the investment is in the public interest.
     (4) The department shall adopt rules to implement this section.

     History: En. Sec. 39, Ch. 89, L. 1927; re-en. Sec. 6014.43, R.C.M. 1935; amd. Sec. 1, Ch. 115, L. 1973; R.C.M. 1947, 5-518; amd. Sec. 1, Ch. 259, L. 1983; amd. Sec. 3, Ch. 199, L. 1989; (4) En. Sec. 6, Ch. 199, L. 1989; amd. Sec. 26, Ch. 395, L. 1993.