(b) Property held by a state bank as fiduciary shall not be sold or transferred, by loan or otherwise, to the bank or its directors, officers, or employees, or to individuals with whom there exists such a connection, or organizations in which there exists such an interest, as might affect the exercise of the best judgment of the bank in selling or transferring such property, or to affiliates of the bank or their directors, officers, or employees, except:

1. (1) Where lawfully authorized by the instrument creating the relationship or by court order or by local law;
2. (2) In cases in which the bank has been advised by its counsel in writing that it has incurred as fiduciary a contingent or potential liability and desires to relieve itself from such liability, in which case such a sale or transfer may be made with the approval of the board of directors, provided that in all such cases the bank, upon the consummation of the sale or transfer, shall make reimbursement in cash at no loss to the account;
3. (3) As is provided in subsection (b)(8)(B) of this rule; or
4. (4) Where required by the State Bank Department.

(c)

1. (1) Except as provided in 23 CAR § 320-1306(b), funds held by a state bank as fiduciary shall not be invested by the purchase of stock or obligations of the bank or its affiliates unless authorized by the instrument creating the relationship or by court order or by local law, provided that if the retention of stock or obligations of the bank or its affiliates is authorized by the instrument creating the relationship or by court order or by local law, it may exercise rights to purchase its own stock or securities convertible into its own stock when offered pro rata to stockholders, unless such exercise is forbidden by local law.
2. (2) When the exercise of rights or receipt of a stock dividend results in fractional share holdings, additional fractional shares may be purchased to complement the fractional shares so acquired.

(e) A state bank may make a loan to an account from the funds belonging to another such account, when the making of such loans to a designated account:

1. (1) Is authorized by the instrument creating the account from which such loans are made; and
2. (2) Is not prohibited by local law.

(f) A state bank may make a loan to an account and may take as security therefore assets of the account, provided such transaction:

1. (1) Is fair to such account; and
2. (2) Is not prohibited by local law.