Whereas, without the proposed change, Maine-based lenders may suffer competitive losses to out-of-state financial corporations; and

Whereas, Maine companies that would prefer to do business with local lenders are forced to use other financial organizations; and

Whereas, Maine lenders are ready and able to serve these Maine businesses but for the restraints resulting from the current Maine banking law; and

Whereas, this current Maine banking law was passed prior to Maine's many recent banking code changes regarding interstate banking; and

Whereas, this legislation would amend Maine law so that Maine's Superintendent of Banking may waive certain requirements that predate these changes to Maine's banking code; and

Whereas, without this legislation Maine-based lenders would continue to see loan business move to out-of-state financial organizations; and

Whereas, in the judgment of the Legislature, these facts create an emergency within the meaning of the Constitution of Maine and require the following legislation as immediately necessary for the preservation of the public peace, health and safety; now, therefore,

Be it enacted by the People of the State of Maine as follows:

Sec. 1. 9-B MRSA §439-A, sub-§2, as amended by PL 1997, c. 398, Pt. I, §25, is further amended to read:

2. Limitations. A financial institution subject to this Title or a service corporation established pursuant to section 445 may not make loans or extensions of credit outstanding at one time to a person in excess of 20% of its total capital. Total Except as provided in paragraph A, total loans or other extensions of credit in excess of 10% of total capital must be approved by a majority of the governing body or the executive committee of that institution or corporation. Any loan made in violation of this section is subject to the remedies prescribed in section 465-A.