C.F.R. » Title 12 » CHAPTER I—COMPTROLLER OF THE CURRENCY, DEPARTMENT OF THE TREASURY › PART 7—ACTIVITIES AND OPERATIONS › Subpart A—National Bank and Federal Savings Association Powers

12 C.F.R. § 7.1006

Loan agreement providing for a national bank or Federal savings association share in profits, income, or earnings or for stock warrants

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A national bank or Federal savings association may take as consideration for a loan a share in the profit, income, or earnings from a business enterprise of a borrower. A national bank or Federal savings association also may take as consideration for a loan a stock warrant issued by a business enterprise of a borrower, provided that the bank or savings association does not exercise the warrant. The share or stock warrant may be taken in addition to, or in lieu of, interest. The borrower's obligation to repay principal, however, may not be conditioned upon the value of the profit, income, or earnings of the business enterprise or upon the value of the warrant received.

[61 FR 4862, Feb. 9, 1996, as amended at 85 FR 83728, Dec. 22, 2020]
Notes of Decisions
Cited in 2 cases, 2012–2017 · leading case: Starr Int'l Co. v. United States, 856 F.3d 953 (Fed. Cir. 2017).
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Starr Int'l Co. v. United States, 856 F.3d 953 (Fed. Cir. 2017). · cites it 4× “12 C.F.R. § 7.1006 (emphasis added). This regulation indicates that “incidental powers” may include, at a minimum, taking shares or stock warrants “in addition to, or in lieu of, interest.”
Starr Int'l Co. v. Fed. Reserve Bank, 906 F. Supp. 2d 202 (S.D.N.Y. 2012). “Ltr., 1992 OCC Ltr. LEXIS 95, at *5 (July 15, 1992) (“In general, the OCC has approved the use by national banks of various forms of participatory financing.”
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