§ 1864 Bank Stock Investment Limits

Financial Code·California

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Key Takeaways

•Banks can buy shares in certain companies.
•But they can't spend more than 10% of their own money on these shares.
•This rule helps banks stay safe with their money.

Example

A bank wants to buy shares in a tech company.

The bank can buy some shares, but if the bank has $100 million of its own money, it can't spend more than $10 million on these shares.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source

View on CA.gov

§ 1864 Bank Stock Investment Limits

Any bank may invest in the shares of any corporation organized under the provisions of this article, but the aggregate amount of stock held in all corporations engaged in business of the kind described in this chapter shall not exceed 10 percent of the subscribing bank’s shareholders’ equity. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)

Last verified: January 23, 2026

Key Terms

bank invest shares corporation 10 percent shareholders’ equity

References

Official text at leginfo.legislature.ca.gov
California Legislature. Financial Code. Section 1864.

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Key Takeaways

Example

Key Terms

Related Statutes

References