SB-0748, As Passed House, May 18, 2016

SUBSTITUTE FOR

SENATE BILL NO. 748

     A bill to amend 1999 PA 276, entitled

"Banking code of 1999,"

by amending the title and sections 1202, 1203, 2202, 2203, 2308,

4108, and 4304 (MCL 487.11202, 487.11203, 487.12202, 487.12203,

487.12308, 487.14108, and 487.14304).

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

TITLE

     An act to revise and codify the laws relating to banks, out-

of-state banks, and foreign banks; to provide for their regulation

and supervision; to prescribe the powers and duties of banks; to

prescribe the powers and duties of certain state agencies and

officials; to create the state bank regulatory fund; to prescribe

penalties; and to repeal acts and parts of acts.

     Sec. 1202. As used in this act:

     (a) "Financial institution" means an organization that is

licensed, chartered, or regulated by the financial institutions

bureau department under the laws of this state.

     (b) "Foreign bank" means an entity that is organized and

recognized as a bank under the laws of a foreign country that

lawfully engages in the business of banking and is not directly or

indirectly owned or controlled by United States citizens or by a

corporation organized under the laws of the United States. Foreign

bank includes a foreign commercial banks, bank, foreign merchant

banks, bank, and other foreign institutions that engage institution

that engages in banking activities that are usual in connection

with the business of banking in the countries country in which the

foreign institutions are institution is organized.

     (c) "Foreign bank agency" means an office or place of business

of a foreign bank, established under this act, the international

banking act of 1978, or the laws of another state, that does not

exercise trust powers and at which deposits of citizens or

residents of the United States are not accepted.

     (d) "Foreign bank branch" means a place of business of a

foreign bank, located in any state, the District of Columbia, or a

territory, or protectorate of the United States, that is not a

foreign bank agency, bank, or out-of-state bank, at which deposits

are received and that is established and operating as a branch of a

foreign bank under this act, the international banking act of 1978,

or the laws of another state.

     (e) "Foreign country" means a country other than the United

States and includes a colony, dependency, or possession of a

country other than the United States.

     (f) "Incorporator" means a signer of the original articles of

incorporation.

     (g) "Institution" means a bank, state agency, or state foreign

bank branch operating or organized or reorganized under this act or

operating or organized under any law of this state enacted before

August 20, 1969.

     (h) "International banking act of 1978" means the

international banking act of 1978, Public Law 95-369, 92 Stat. Stat

607.

     (i) "Investment security" means a marketable obligation in the

form of a bond, note, or debenture, commonly regarded as an

investment security and that is salable under ordinary

circumstances with reasonable promptness at a fair value.

     (j) "Loan and extension of credit" or "loan or extension of

credit" includes all direct or indirect advances of funds to a

person made on the basis of any obligation of that person to repay

the funds or repayable from specific property pledged by or on

behalf of the person, and any credit exposure arising from a

derivative transaction. To the extent specified by the

commissioner, director, loan and extension of credit or loan or

extension of credit includes any liability of a bank to advance

funds to or on behalf of a person under a contractual commitment.

The term does not include investment securities held by a bank

under section 4301.

     (k) "Loan production office" means an office of a depository

institution or institutions at which activities related to the

lending of money are conducted, deposits are not received, and

checks are not paid, and which office is not the principal office,

a branch, or an agency of an affiliated depository financial

institution.

     (l) "Member" means a person with an ownership interest under

the Michigan limited liability company act, 1993 PA 23, MCL

450.4101 to 450.5200.

     (m) "Messenger service" means a service such as a courier

service or an armored car service that picks up from or delivers to

customers of 1 or more depository institutions, or 1 or more

affiliates of a depository institution, cash, currency, checks,

drafts, securities, or other items relating to transactions between

or involving a depository institution or affiliate of a depository

institution and those customers, or that transfers cash, currency,

checks, drafts, securities, or other items or documents between

depository institutions or affiliates of depository institutions.

The service may be owned and operated by 1 or more depository

institutions or affiliates or by a third party.

     (n) "Mobile branch" means a branch, the physical structure of

which is moved from time to time.

     (o) "National bank" means a national banking association

chartered by the federal government under the national bank act.

     (p) "National bank act" means the national bank act, chapter

106, 13 Stat. 99.12 USC 21 to 216d.

     (q) "Operating in this state" means transacting business in

this state from a branch or other physical location or by other

means, soliciting customers in this state, or employing residents

of this state.

(r) (q) "Out-of-state bank" means a banking corporation that

is organized under the laws of another state, the District of

Columbia, or a territory or a protectorate of the United States

whose principal office is located in a state other than this state,

in the District of Columbia, or in a territory or a protectorate of

the United States, and whose deposits are insured by the federal

deposit insurance corporation.Federal Deposit Insurance

Corporation.

(s) (r) "Person" means an individual, partnership,

corporation, limited liability company, governmental entity, or any

other legal entity.

(t) (s) "Professional investor" means an accredited investor

under 15 U.S.C. 77b.as defined in 15 USC 77b.

(u) (t) "Publication", "publish", or "published" means to

appear in a newspaper of general circulation in the community or

communities where the principal office or offices of the a

depository institution or institutions are located.

     Sec. 1203. As used in this act:

     (a) "Savings bank" means a savings bank that is organized

under the savings bank act, 1996 PA 354, MCL 487.3101 to 487.3804,

or the laws of another state, the District of Columbia, a territory

or protectorate of the United States, or of the United States,

whose deposits are insured by the federal deposit insurance

corporation.Federal Deposit Insurance Corporation.

     (b) "Service entity" means a corporation, mutual company,

limited liability company, limited liability partnership, or

limited partnership in which a bank has invested under section

4310(1). Upon With the written approval of the commissioner,

director, a service entity may be a general partnership.

     (c) "Service provider" means a person that provides any of the

following to an institution:

     (i) Data processing services.

     (ii) Activities that support financial services, including,

but not limited to, lending, funds transfer, fiduciary activities,

trading activities, and deposit taking.

     (iii) Internet-related services, including, but not limited

to, web services and electronic bill payments, mobile applications,

system and software development and maintenance, and security

monitoring.

     (iv) Activities related to the business of banking.

(d) (c) "Shareholder" means the registered owner of any share

or shares of capital stock of an institution.

(e) (d) "State agency" means a foreign bank agency that is

established and operating under this act.

(f) (e) "State foreign bank branch" means a foreign bank

branch that is established and operating under this act.

(g) (f) "Stock association" means an association with that has

authority to issue shares of voting capital stock.

(h) (g) "Subsidiary" means a corporation, mutual company,

limited liability company, limited liability partnership, or

limited partnership, the controlling interests of which are more

than 50% owned by 1 or more depository institutions, and in which a

bank has an ownership interest, membership interest, or other

legally enforceable interest which that is the indicia of

ownership. Upon With the approval of the commissioner, director,

and subject to the ownership requirements set forth in this

subsection, subdivision, a subsidiary may be a general partnership.

(i) (h) "Surplus" means the amount paid for issued and

outstanding common and preferred stock of the a bank in excess of

the stated par value, plus any amount of transferred undivided

profits and any additional amounts paid in or contributed to

increase total capital.

(j) (i) "Total capital" means an amount equal to any capital,

plus any surplus, undivided profits, and instruments of

indebtedness authorized under section 3801.

(k) (j) "Trust office" means an office of a bank at which

trust services are performed and at which deposits are not

accepted, checks are not paid, and money is not lent.

(l) (k) "Uniform commercial code" means the uniform commercial

code, 1962 PA 174, MCL 440.1101 to 440.11102.440.9994.

(m) (l) "Venture capital" means equity financing that is

provided for starting up or expanding a company, or related

purposes such as financing for seed capital, research and

development, introduction of a product or process into the

marketplace, or similar needs requiring risk capital. A venture

capital investment shall not include the purchase of a share of

stock in a company if, on the date on which the share of stock is

purchased, the company has securities outstanding that are

registered on a national securities exchange under section 12(b) of

title I of the securities exchange act of 1934, chapter 404, 48

Stat. 892, 15 U.S.C. USC 78l; that are registered or required to be

registered under section 12(g) of title I of the securities

exchange act of 1934, chapter 404, 48 Stat. 892, 15 U.S.C. USC 78l,

or which would be required to be registered except for the

exemptions in section 12(g)(2) of title I of the securities

exchange act of 1934, chapter 404, 48 Stat. 892, 15 U.S.C. USC 78l.

(n) (m) "Violation", as used in sections 2304, 2305, and 2306,

includes without limitation any action, alone or with others, for

or toward causing, bringing about, participating in, counseling, or

aiding or abetting a violation.

     Sec. 2202. (1) Each institution together with and its

subsidiaries and service entities shall be are subject to

examination of its their condition and affairs by the commissioner

or the commissioner's director or his or her authorized agent not

less frequently than at least once every 18 months.

     (2) The commissioner director shall examine an institution

under the commissioner's director's jurisdiction when requested by

its board of directors. In connection with an examination, the

commissioner, or the commissioner's director, or his or her

authorized agent, may examine on under oath a director, officer,

agent, employee, or shareholder of an institution concerning the

affairs and business of the institution. The commissioner director

shall ascertain whether the institution transacts its business in

the manner prescribed by law and the rules promulgated under law.

The commissioner, or the commissioner's authorized agent, may make

an examination of an affiliate, bank holding company, subsidiary,

or service entity necessary to disclose fully the relation between

an institution and the affiliate, holding company, subsidiary, or

service entity and the effect of the relation upon the institution.

     (3) If an institution under the director's jurisdiction, by

contract or otherwise, engages a service provider to perform any

services of a service provider, whether on or off its premises,

that performance is subject to regulation, examination, and

enforcement by the director, or his or her authorized agent, to the

same extent as if those services were performed by the institution

itself on its own premises.

     (4) The director, or his or her authorized agent, may examine

an affiliate or bank holding company of an institution that is

under the director's jurisdiction.

(5) (3) The commissioner director may examine the branch or

branches located in this state of an out-of-state bank as permitted

by under the federal deposit insurance act.

(6) (4) In fulfilling the requirements of subsections (1) and

(2) and the authority granted under subsections (3) and (4), the

commissioner director may use an examination made under the federal

reserve act, the federal deposit insurance act, or the law of

another state governing the activities of out-of-state banks in

that state. By any federal or state bank regulatory agency. The

commissioner director may require the institution to furnish a copy

of any report required by a federal or state bank regulatory

agency.

(7) (5) An examination required by under this section may

include the fiduciary activities of the institution.

(8) (6) The commissioner director may contract with other

state bank regulatory agencies to assist in the conduct of

examinations of banks with 1 or more branches located in other

states and in examinations of out-of-state banks with 1 or more

branches located in this state.

(9) (7) The contents of a report of examination of a bank and

examination-related documents prepared or obtained under this

section remain the property of the bureau. Dissemination of all or

part of a bank's report of examination for purposes other than the

legitimate business purposes of the bank or as otherwise authorized

by this act shall be a violation of this act subject to the

administrative remedies granted the commissioner under sections

2304 through 2314.director. Any document, material, or information

related to an examination under this act is confidential by law and

privileged, is not subject to the freedom of information act, 1976

PA 442, MCL 15.231 to 15.246, is not subject to subpoena, and is

not subject to discovery or admissible in evidence in any private

civil action. However, the director is authorized to use the

documents, materials, or information in the furtherance of any

supervisory activity or legal action brought as part of the

director's duties.

     (10) The director, or any person that received documents,

materials, or information while acting under the director's

authority, is not permitted and may not be required to testify in

any private civil action concerning any confidential documents,

materials, or information described in subsection (9).

     (11) To assist in the performance of the director's duties

under this act, the director may do any of the following:

     (a) Share documents, materials, or information, including the

confidential and privileged documents, materials, or information

that are subject to subsection (9), with other state, federal, and

international regulatory agencies, and with state, federal, and

international law enforcement authorities, provided that the

recipient agrees to maintain the confidentiality and privileged

status of the documents, materials, or information.

     (b) Receive documents, materials, or information, including

otherwise confidential and privileged documents, materials, or

information, from regulatory and law enforcement officials of other

foreign or domestic jurisdictions. The director shall maintain as

confidential or privileged any documents, materials, or information

received with notice or the understanding that the documents,

materials, or information the director receives are confidential or

privileged under the laws of the jurisdiction that is the source of

the documents, materials, or information.

     (c) Enter into agreements governing the sharing and use of

information that are consistent with this subsection.

     (12) The disclosure of any documents, materials, or

information to the director, or the sharing of documents,

materials, or information under subsection (11), is not a waiver

of, and shall not be construed as a waiver of, any privilege

applicable to or claim of confidentiality in those documents,

materials, or information.

     (13) A person to which confidential and privileged documents,

materials, or information is disclosed shall not further

disseminate those confidential and privileged documents, materials,

or information.

     (14) Any person on which a demand for production of

confidential and privileged documents, materials, or information is

made, whether by subpoena, order, or other judicial or

administrative process, must withhold production of the

confidential and privileged documents, materials, or information

and must notify the director of the demand. If the director is

notified of a demand under this subsection, the director may

intervene for the purpose of enforcing the limitations of this

section or seeking the withdrawal or termination of the attempt to

compel production of the confidential and privileged documents,

materials, or information.

     (15) Any request for discovery or disclosure of confidential

and privileged documents, materials, or information, whether by

subpoena, order, or other judicial or administrative process, shall

be made to the director, and the director shall determine within 21

days whether to disclose the documents, materials, or information

under this act. If the director determines that the documents,

material, or information will not be disclosed, the director's

decision is subject to judicial review.

     (16) The judicial review of a decision of the director under

subsection (15) may include in camera judicial review of the

confidential and privileged documents, materials, or information.

After judicial review, a court may only order disclosure of the

portions of the confidential and privileged documents, materials,

or information that are relevant and otherwise unobtainable by the

requesting party.

     (17) The director may immediately appeal any court order

described in subsection (16) that compels disclosure of

confidential and privileged documents, materials, or information,

and the order is automatically stayed pending the outcome of the

appeal.

     (18) In an addendum to a report of an examination under this

section, the director or his or her authorized agent may suggest

best practices or other improvements in the operation of a bank

that are not required by law or regulation or to address safety and

soundness of the bank. The manner in which a bank addresses issues

concerning its operations is within the discretion of the bank in

the exercise of its business judgment, except as required by law or

regulation or to address a concern over safety and soundness. The

director shall not take action against a bank under this act based

on a failure or refusal of a bank to follow a best practice or

other recommended improvement in the operation of the bank that is

suggested informally by an examiner or that is contained in an

addendum to a report of examination.

     (19) Within 1 year after the effective date of the amendatory

act that added this subsection, the director shall issue guidance

to promote consistency and due process in the examination process

under this section, including, but not limited to, establishing

guidelines that define the scope of the examination process and

clarify how examination issues will be resolved.

     Sec. 2203. (1) The commissioner director shall periodically

establish a schedule of supervisory fees to be paid by banks.

Except for a minimum fee consistent with subsection (2), the fee

shall not be more than 25 cents for each $1,000.00 of 1 of the

following percentages, as applicable, of the total assets of the

bank as reported by the bank on its report of condition as of

December 31 of the previous year: .

     (a) In 2016, 1/40 of 1%.

     (b) In 2017, 1/20 of 1%.

     (c) In 2018 and 2019, 3/40 of 1%.

     (d) In 2020 and in subsequent years, 1/10 of 1%.

     (2) Each bank shall pay an The annual supervisory fee which

shall be not less than established by the director under subsection

(1) shall be at least $1,000.00.

     (3) The commissioner director shall provide an invoice of the

supervisory fee no later than on or before July 1 of each year. The

A bank must pay the annual supervisory fee shall be paid by on or

before August 15 of that year.

     (4) The director shall base the initial supervisory fee for a

bank that obtained a charter as a result of a conversion shall be

based on the total assets of the bank as reported in its report of

condition as of December 31 of the previous year under its prior

charter.

     (5) The supervisory fee of a bank which that was not engaged

in the business of banking on December 31 of the previous year

shall be the minimum supervisory fee established by the

commissioner consistent with subsection director under subsections

(1) and (2).

     (6) The commissioner director shall periodically establish a

schedule of fees, beyond those charged for normal supervision, to

be paid for applications, special evaluations and analyses, and

examinations.

     (7) The director shall base the fees established under

subsection (6) shall be based on the estimated cost to the bureau

department of conducting the activities for which the fees are

imposed.

     (8) The commissioner director may charge reasonable fees for

furnishing and certifying copies of documents or serving notices

required by under this act.

     (9) To the extent any fees, penalties, or fines assessed under

this act are unpaid when due, the commissioner director may, upon

after providing proper notice, maintain an action for the recovery

of the fees, penalties, or fines plus interest and costs.

     (10) The fees, expenses, compensation, penalties, and fines

collected under this act are not refundable. and shall be paid into

the state treasury to the credit of the bureau and used only for

the operation of the bureau.

     (11) The state bank regulatory fund is established in the

department of treasury. All of the following apply to the state

bank regulatory fund:

     (a) The fund shall consist of the following:

     (i) Fees, expenses, compensation, penalties, and fines

received or collected under this act.

     (ii) Money appropriated to the fund.

     (iii) Donations of money made to the fund from any source.

     (iv) Interest and earnings from fund investments.

     (b) Money in the fund at the close of a fiscal year shall

remain in the fund and shall not revert to the general fund.

     (c) Upon appropriation, the department shall use the money in

the fund only for bank regulatory purposes, as determined by the

director.

     (d) The state treasurer shall direct the investment of the

fund.

     (e) The department is the administrator of the fund for

auditing purposes.

     Sec. 2308. If any person participating in the conduct of the

affairs of an institution is charged in any information,

indictment, warrant, or complaint by a county, state, or federal

authority with the commission of, or participation in, a felony

involving or misdemeanor that involves fraud, dishonesty, or breach

of trust, the commissioner, director, by written notice served upon

the person may suspend the person from office or prohibit the

person from further participation in any manner in the conduct of

the affairs of the institution. A copy of the notice shall also be

served upon the institution. The suspension or prohibition is in

effect until the information, indictment, warrant, or complaint is

finally disposed of or until terminated by the commissioner.

director. If a judgment of conviction with respect to the offense

is entered against the person, and when the judgment is not subject

to further appellate review, the commissioner director may issue an

order removing the person from office or prohibiting the person

from further participation in the conduct of the affairs of the

institution except with the consent of the commissioner. director.

The person shall cease to be a director or officer of the

institution when a copy of the order is served upon the

institution. A finding of not guilty or other disposition of the

charge shall not preclude the commissioner director from

instituting proceedings to suspend or remove the person from office

or to prohibit further participation in institution affairs under

section 2306(1), (2), or (3).

     Sec. 4108. (1) Except as otherwise provided in this section, a

bank or bank officer shall not give preference to a depositor or

creditor by pledging the assets of the bank as collateral security

or otherwise.

     (2) A bank may pledge its assets in an aggregate amount not in

excess of that does not exceed 10% of its total assets for the

purpose of securing the following:

     (a) Funds belonging to the United States or belonging to or

being administered by an officer, instrumentality, or agent of the

United States, funds of estates being administered by a federal

court under a federal bankruptcy law, and other funds when required

or permitted to do so under the laws of the United States or an

order of a federal court.

     (b) Surplus funds of the state held by the state treasurer.

     (c) Funds of the Mackinac bridge authority, Bridge Authority,

which is declared to be a political subdivision of this state,

under 1950 (Ex Sess) PA 21, MCL 254.301 to 254.304.254.302.

     (d) Funds of the international bridge authority, which is

declared to be a political subdivision of this state, under 1954 PA

99, MCL 254.221 to 254.240.

     (e) Funds on deposit under 1941 PA 205, MCL 252.51 to 252.64,

providing for limited access highways.

     (f) Funds on deposit to the credit of the Michigan employment

security commission.

     (g) Funds of the Michigan state housing development authority

constituting proceeds of the sale of the authority's notes and

bonds and repayments of those notes and bonds, under the state

housing development authority act of 1966, 1966 PA 346, MCL

125.1401 to 125.1499c.

     (h) Funds belonging to any political subdivision of this

state.

     (i) Funds belonging to any federally recognized Indian tribe.

     (j) Funds representing the proceeds of a grant or loan from a

department or agency of the United States, the award of which is

conditioned upon the recipient depositing the proceeds in an

account secured by a pledge of assets of the depository

institution.

     (3) The requirements, restrictions, and limitations imposed by

under this section shall not apply to the pledging of an obligation

of the United States, direct or fully guaranteed, or both, for the

purpose of securing a deposit of the United States when the deposit

is established coincidentally with the purchase of an obligation of

the United States by or through an institution.

     (4) A bank may pledge its assets to secure liabilities of any

of the following types:

     (a) In the case of member banks, liabilities incurred under

the federal reserve act. In the case of nonmember banks,

liabilities incurred through borrowing under the same conditions as

are imposed upon members of the federal reserve system by the

federal reserve act.

     (b) In the case of federal home loan bank members, liabilities

incurred under the federal home loan bank act.

     (c) Liabilities incurred under former section 202 of title II

of the federal farm loan act, chapter 245, 39 Stat. 360.

     (d) Liabilities incurred on account of a loan made with the

express approval of the commissioner director under section

4202(3)(c).

     (e) Liabilities incurred on account of borrowings from 1

business day to the next from a bank or national banking

association of excess reserve balances from time to time maintained

by the bank or national banking association under section 19 of the

federal reserve act, chapter 6, 38 Stat. 270.12 USC 461.

     (f) Liabilities incurred on account of securities sold under a

repurchase agreement.

     (g) Liabilities incurred in connection with administration of

treasury tax and loan accounts.

     (5) A bank may pledge its assets to counterparties to secure

the counterparties' exposure in interest rate swap transactions.

     Sec. 4304. (1) A bank shall not engage in a transaction with

respect to shares of the capital stock of a corporation unless

specifically authorized by under this act or by order or

declaratory ruling of the commissioner director under this act.

     (2) A bank may purchase and sell securities and stock upon on

the order of and for the account of a customer without recourse.

     (3) A bank shall not make a loan on or discount the security

of the shares of its own capital stock, or the capital stock of its

holding company, if any, unless the security is necessary to

prevent loss upon on a debt previously contracted in good faith.

     (4) A bank may purchase or hold shares of its own stock if any

of the following apply:

     (a) The bank is holding shares amounting that amount to not

more than 5% of its common stock until disposed of in compliance

with an existing stock option plan.

     (b) The purchase or holding of the shares is necessary to

prevent loss upon on a debt that is previously contracted in good

faith.

     (c) The commissioner director gives written approval to the

bank to purchase or hold shares for its own account.

     (5) A bank may purchase and hold shares of stock or other

equity interests, having that have an aggregate purchase price that

is not more than 10% of its capital and surplus, of each of the

following:

     (a) Small business investment companies that are doing

business in this state and licensed under, or established under,

the small business investment act of 1958, Public Law 85-699, 72

Stat. Stat 689.

     (b) The Michigan business development corporation.

     (c) Corporations or partnerships that are authorized by title

IX of the housing and urban development act of 1968, Public Law 90-

448, 82 Stat. Stat 547.

     (d) Business entities whose primary purpose is to provide

capital to banks, which banks are largely owned or controlled by

individuals classified as racial minorities.

     (e) Open-end management investment companies that are

registered with the securities and exchange commission under the

investment company act of 1940, title I of chapter 686, 54 Stat.

789, 15 U.S.C. USC 80a-1 to 80a-64, while the portfolios of the

companies are restricted by their investment policies, changeable

only by vote of the shareholders, to investments permitted to banks

by order or declaratory ruling of the commissioner.director.

     (f) Agricultural credit business entities that are organized

solely for the purpose of making loans to farmers and ranchers for

agricultural purposes, including the breeding, raising, fattening,

or marketing of livestock.

     (g) The student loan marketing association established under

section 439 of part B of title IV of the higher education act of

1965, Public Law 89-329, 20 U.S.C. USC 1087-2.

     (h) Any class of voting securities of banks, out-of-state

banks, or national banks that are engaged exclusively in providing

services to depository institutions or their officers, directors,

employees, and customers, or bank holding companies that own or

control such those banks, out-of-state banks, or national banks if

the stock of the bank holding companies is owned exclusively,

except to the extent directors' qualifying shares are required by

law, by depository institutions and if all subsidiaries of the bank

holding companies engage exclusively in serving depository

institutions or their officers, directors, employees, and

customers.

     (i) Banking organizations or corporations that are chartered

or incorporated under the laws of the United States or of any

state, territory, or protectorate of the United States, and

principally engaged in international or foreign banking, either

directly or through the agency, ownership, or control of foreign

banks.

     (j) Foreign banks that are not engaged, directly or

indirectly, in any activity in the United States except as, in the

judgment of the commissioner, director, is incidental to the

international or foreign business of the foreign banks.

     (k) Entities that provide, and entities that reinsure

providers of, insurance.

     (6) Subject to the limitation based upon on capital and

surplus set forth in under subsection (5), a bank may purchase for

its own account any of the following:

     (a) Securities authorized by title IX of the housing and urban

development act of 1968, Public Law 90-448, 82 Stat. Stat 547.

     (b) Adjustable rate preferred stock and money market preferred

stock.

     (c) Stock, bonds, or other obligations of a business and

industrial development company established under the provisions of

the Michigan BIDCO act, 1986 PA 89, MCL 487.1101 to 487.2001.

     (d) Stock, bonds, or other obligations of community and

economic development entities, community development projects, and

other public welfare investments that are considered under federal

law, federal regulation, or a written interpretation by a federal

bank regulatory agency to be a qualified investment for purposes of

the community reinvestment act of 1977, 12 USC 2901 to 2908,

utilizing the investment test described in 12 CFR 25.23, 12 CFR

228.23, or 12 USC 345.23.

     (7) This section does not limit or expand the investment

authority of a bank granted by under any other section of this act.

     Enacting section 1. This amendatory act takes effect 90 days

after the date it is enacted into law.

     Enacting section 2. This amendatory act does not take effect

unless all of the following bills of the 98th Legislature are

enacted into law:

     (a) Senate Bill No. 749.

     (b) Senate Bill No. 750.