§ 19-3-4 - Loans on own shares. - Rhode Island Statutes

SECTION 19-3-4

   § 19-3-4  Loans on own shares. – No stock formed financial institution shall make a loan or discount on thesecurity of the shares of its own capital stock, nor be the purchaser or holderof its shares, unless the security or purchase is necessary to prevent lossupon a debt previously contracted in good faith; provided, however, thatwhenever a financial institution makes a valid loan or discount in good faithupon the general credit of specific security or collateral of a shareholder,other than the shares in the financial institution, nothing in this sectionshall be construed to abridge or modify any of the provisions of the by-laws ofthe financial institution, as affecting the transaction, giving it a lien upon,or any other right or remedy relating to or affecting, the stock of theshareholder. All stock so purchased or acquired by the financial institution ingood faith shall, within one year after its purchase, be disposed of or sold.