Title 12, Banks and BankingRelease 119-110
§83 Loans by Bank on Its Own Stock
Title 12 › CHAPTER 2 — NATIONAL BANKS › SUBCHAPTER IV — REGULATION OF THE BANKING BUSINESS; POWERS AND DUTIES OF NATIONAL BANKS › § 83
Summary
A national bank cannot make a loan using its own shares as collateral. If the bank takes its own stock to avoid losing money on a loan it made earlier in good faith, that is allowed and is not treated as a loan secured by its stock.
Full Legal Text
Title 12, §83
Banks and Banking, Source: USLM XML via OLRC
(a)General prohibition
No national bank shall make any loan or discount on the security of the shares of its own capital stock.
(b)Exclusion
For purposes of this section, a national bank shall not be deemed to be making a loan or discount on the security of the shares of its own capital stock if it acquires the stock to prevent loss upon a debt previously contracted for in good faith.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
Codification R.S. § 5201 derived from act June 3, 1864, ch. 106, § 35, 13 Stat. 110, which was the National Bank Act. See section 38 of this title.
Amendments
2000—Pub. L. 106–569 amended section catchline and text generally. Prior to amendment, text read as follows: “No association shall make any loan or discount on the security of the shares of its own capital stock, nor be the purchaser or holder of any such shares, unless such security or purchase shall be necessary to prevent loss upon a debt previously contracted in good faith; and stock so purchased or acquired shall, within six months from the time of its purchase, be sold or disposed of at public or private sale; or, in default thereof, a receiver may be appointed to close up the business of the association, according to section 192 of this title.”
Reference
Citations & Metadata
Citation
12 U.S.C. § 83
Title 12, Banks and Banking
Last Updated
Sep 22, 2026
Release point: 119-110