Ga. Comp. R. & Regs. R. 80-1-10-.10 - Bank as a Lessor of Real Estate

(1) Pursuant to O.C.G.A. § 7-1-262(a)(1), a bank may acquire and hold real estate the bank occupies or intends to occupy primarily for the transaction of its business or the business of any subsidiary or affiliate. Subject to compliance with the provisions of this rule as well as the Department's prior written approval, a bank may lease excess real estate.

(2) For purposes of this rule, the phrase "occupy primarily" means occupation and use, on a full-time basis, of at least sixty-seven (67) percent of the square footage of each individual premise by the bank or an affiliate or subsidiary of the bank.

(3) The underlying real estate must have been acquired in good faith and for permissible purposes. Nothing herein shall be deemed to authorize a bank to acquire real estate for speculative purposes.

(4) The bank may not lease real estate to a third-party if it raises safety and soundness concerns.

(5) The application for approval to lease real estate to a third-party shall contain, at a minimum, the following information:

(a) A detailed description of the lease that is contemplated, including but not limited to, the terms of the lease, a description of the proposed lessee's operations, the relationship, if any, between the bank and the proposed lessee, the real estate that is proposed to be leased, and the percentage of the real estate that will be occupied by lessee;

(b) The total amount of the bank's fixed assets that will be leased in the event the lease is approved;

(c) An affirmative statement that there is no involvement by any director, committee member, officer or employee of the bank or any related interest of such individuals with the individual or entity that is the proposed lessee. In the event there is any such involvement, then it should be detailed in the application; and

(d) A copy of the resolution adopted by the Board of Directors authorizing the lease of the specific premises to the proposed lessee.

Notes

Ga. Comp. R. & Regs. R. 80-1-10-.10

O.C.G.A. §§ 7-1-61, 7-1-262.

Original Rule entitled "Bank as a Lessor of Real Estate" adopted. F. Jan. 8, 2021; eff. Jan. 28, 2021. Amended: F. July 7, 2022; eff. July 27, 2022.