Part 4: POWERS AND DUTIES OF FINANCIAL INSTITUTIONS
Chapter 43: LOANS IN GENERAL
§439-A. Lending limits
As used in this section, unless the context otherwise indicates, the following terms
have the following meanings.
A. "Loans or extensions of credit" includes all direct or indirect advances of funds
to a person that are made on the basis of any obligation of that person to repay the
funds or that are repayable from specific property pledged by or on behalf of the
person. "Loans or extensions of credit" may include, to the extent specified by the
superintendent, any liability of a financial institution to advance funds to or on
behalf of a person pursuant to a contractual commitment. [1991, c. 34, §8 (NEW).]
B. "Person" has the same meaning as defined in section 131, subsection 30. In determining
loan limitations pursuant to subsection 2, the superintendent may further define "person,"
including, through rulemaking, the establishment of standards regarding the aggregation
of loans with respect to related persons. [1991, c. 34, §8 (NEW).]
1991, c. 34, §8 (NEW)
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. 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.
A. The superintendent may grant a partial or full waiver of the voting requirement
for loans or other extensions of credit in excess of 10% of total capital for good
cause shown. In granting this waiver, the superintendent shall consider capital,
management and resources of the financial institution or other relevant factors as
determined by the superintendent. [1999, c. 205, §1 (NEW).]
B. Any waiver granted pursuant to paragraph A may be withdrawn by the superintendent
upon written notice to the financial institution. [1999, c. 205, §1 (NEW).]
1999, c. 205, §1 (AMD)
3.Exclusions from limitations.
The limitations contained in subsection 2 are subject to the following exceptions:
A. Loans or extensions of credit arising from the discount of commercial or business
paper evidencing an obligation to the person negotiating it with recourse; [1991, c. 34, §8 (NEW).]
B. Loans or extensions of credit to municipal corporations located within this State
upon their bonds or notes; [1991, c. 34, §8 (NEW).]
C. Loans or extensions of credit to the extent that they are secured or covered by
guarantees, or by commitments or agreements to take over or purchase the loans or
extensions of credit, made by any Federal Reserve Bank, the United States, this State
or any department, bureau, board, commission, agency, authority, instrumentality or
establishment of the United States or this State, including any corporation owned
directly or indirectly by the United States or this State; [1991, c. 34, §8 (NEW).]
D. Loans or extensions of credit secured by a segregated deposit account in the lending
bank; [1991, c. 34, §8 (NEW).]
E. Obligations as endorser, with or without recourse, or as guarantor, conditional
or unconditional of dealer-originated obligations; and [1991, c. 34, §8 (NEW).]
F. Sales of federal funds, interbank deposits, which do not include certificates of
deposit, and clearings. [1991, c. 34, §8 (NEW).]
1991, c. 34, §8 (NEW)
4.Record of directors' actions.
When loans in excess of 10% of total capital are approved, the records of the financial
institution or service corporation must show who voted in favor of the loan. These
records and those required by section 222 constitute prima facie evidence of the truth
of all facts stated in the records in prosecutions and civil actions to enforce the
provisions and penalties under section 465-A.
1991, c. 681, §1 (AMD)
The superintendent may adopt rules to administer and carry out this section, including
rules to define or further define terms used in this section and to establish limits
or requirements other than those specified in this section if the superintendent determines
that such action is necessary for the protection of depositors, investors or the public.
Rules adopted pursuant to this section are routine technical rules as defined in Title
5, chapter 375, subchapter II-A.
1997, c. 398, Pt. I, §26 (AMD)
1991, c. 34, §8 (NEW).
1991, c. 681, §1 (AMD).
1997, c. 398, §§I25,26 (AMD).
1999, c. 205, §1 (AMD).
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