KRS 286.3-102: Activities permitted to state bank receiving CAMELS rating of 1 or 2 --

Section not applicable to deferred deposit transactions or title pledge lending.

(1) As used in this section, a CAMELS rating means a system of rating used by

examiners of financial institutions to rate the institutions in six (6) categories:

capital adequacy, asset quality, management effectiveness, quantity and quality of

earnings, liquidity, and sensitivity to market risk.

(2) In addition to all other banking activiti es permitted by this subtitle, a state bank

receiving a CAMELS rating of 1 or 2 at its most recent state or federal bank

regulatory examination may engage in any banking activity in which the bank could

engage and is exempted from any statutes or administr ative regulations which

would be preempted if:

(a) It was operating as a national bank in Kentucky;

(b) It was operating as a state bank, state thrift, or state savings bank in any state;

or

(c) It meets the qualified thrift lender test as determined by th e Office of Thrift

Supervision or its successor, or was operating as a federally chartered thrift or

federal savings bank in any state.

(3) Before a state bank may engage in any of the banking activities permitted by

subsection (2) of this section, the sta te bank shall obtain a legal opinion specifying

the statutory or regulatory provisions that permit the activity in which the state bank

intends to engage and the conditions under which such activity is allowed. This

legal opinion shall be maintained by the bank and provided to the department upon

request.

(4) This section shall not apply to exempt any laws which regulate Kentucky state

banks pertaining to deferred deposit transactions in Subtitle 9 of this chapter,

visitorial or examination powers, and interest rates.