(2) Financial institutions to which paragraph (1) applies
(A) In general For purposes of paragraph (1), the financial institutions referred to in this paragraph are
(i) any bank (and any corporation which would be a bank except for the fact it is a foreign corporation),
(ii) any financial institution referred to in section
591,
(iii) any small business investment company operating under the Small Business Investment Act of 1958, and
(iv) any business development corporation.
(B) Business development corporation
For purposes of subparagraph (A), the term business development corporation means a corporation which was created by or pursuant to an act of a State legislature for purposes of promoting, maintaining, and assisting the economy and industry within such State on a regional or statewide basis by making loans to be used in trades and businesses which would generally not be made by banks within such region or State in the ordinary course of their business (except on the basis of a partial participation), and which is operated primarily for such purposes.
(C) Limitations on foreign banks
In the case of a foreign corporation referred to in subparagraph (A)(i), paragraph (1) shall only apply to gains and losses which are effectively connected with the conduct of a banking business in the United States.