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Letter 17: Investment in Common Stock of Student Loan Marketing Association

This Office has received several requests for an opinion relating to authority of state chartered banks to invest in shares of common stock to be issued by "Sallie Mae," in accordance with an offering circular dated April, 1974.

Sallie Mae is a United States Government Sponsored, privately owned, corporation. Its function is to provide liquidity to lenders engaged in the Guaranteed Student Loan Program through warehousing and purchases of student loans.

The minimum stock purchase requirement for participation in the program is 100 shares (offering price $150). Certain exceptions to this equity requirement appear to exist; however, the status of Wisconsin state chartered banks in this connection in unclear. It is, therefore, the conclusion of this Office that state banks may invest -- in common stock issued by Sallie Mae.

Bkg. Ltr. #17, March 29, 1974, Commissioner Mildenberg