BILL NUMBER: AB 1536	CHAPTERED  07/06/99

	CHAPTER   57
	FILED WITH SECRETARY OF STATE   JULY 6, 1999
	APPROVED BY GOVERNOR   JULY 6, 1999
	PASSED THE SENATE   JUNE 16, 1999
	PASSED THE ASSEMBLY   MAY 17, 1999
	AMENDED IN ASSEMBLY   MAY 12, 1999

INTRODUCED BY   Assembly Member Robert Pacheco

                        FEBRUARY 26, 1999

   An act to amend Section 3371 of the Financial Code, relating to
banks.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1536, Robert Pacheco.  Banks:  extension of credit.
   Existing state law provides that no bank shall acquire, hold,
extend credit on the security of, or extend credit for the purpose of
acquiring or carrying, any security of the bank or of any
controlling person of the bank.  An "extension of credit" for these
purposes is defined in a specified regulation of the Federal Reserve
Board.
   This bill would make certain technical, nonsubstantive changes in
those provisions.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 3371 of the Financial Code is amended to read:

   3371.  As used in this article:
   (a) "Bank" means:
   (1) Any commercial bank or trust company incorporated under the
laws of this state.
   (2) Any foreign (other nation) bank that is licensed by the
commissioner under Article 3 (commencing with Section 1750) of
Chapter 13.5 of this division to maintain a depositary agency or
branch office (as defined in Section 1700) in this state, with
respect to any office of that type.
   (3) Any corporation incorporated under the laws of this state that
is incorporated for the purpose of engaging in, or that is
authorized by the commissioner to engage in, business under Article 1
(commencing with Section 3500) of Chapter 19.
   (4) Any foreign corporation that is licensed by the commissioner
under Article 1 (commencing with Section 3500) of Chapter 19 of this
division to maintain an office in this state and to transact at the
office business under that article, with respect to any office of
that type.
   (5) When used to designate a person that extends credit, any
subsidiary of a bank, as defined in paragraph (1), (2), (3), or (4).

   (b) "Company" has the meaning set forth in subdivision (b) of
Section 215.2 of Regulation O.
   (c) "Executive officer" has the meaning set forth in paragraph (1)
of subdivision (e) of Section 215.2 of Regulation O.  Also,
"executive officer," when used with respect to any bank of the type
described in paragraph (2) or (4) of subdivision (a), includes the
manager of each office of the type referred to in paragraph (2) or
(4) of subdivision (a) that the bank maintains in this state.
   (d) "Extension of credit" has the meaning set forth in Section
215.3 of Regulation O.  However, for purposes of this subdivision,
the term "member bank," as used in Section 215.3, means a bank.
   (e) "Regulation O" means Regulation O (Part 215 (commencing with
Section 215.1) of Title 12 of the Code of Federal Regulations) of the
Board of Governors of the Federal Reserve System, as amended from
time to time.
   (f) "Subsidiary" has the meaning set forth in Section 1841(d) of
Title 12 of the United States Code.  However, for purposes of this
subdivision, the term "bank holding company," as used in Section 1841
(d) of Title 12 of the United States Code, means a bank holding
company, as defined in Section 1841(a) of Title 12 of the United
States Code, or a bank, and the term "board," as used in Section 1841
(d) of Title 12 of the United States Code, means the commissioner.