(1) Any readily marketable bond or like obligation that is held by a commercial bank as an investment;
(2) Any loan that is made to this State or to a political subdivision and that matures in less than 1 year;
(3) Any loan of $3,500 or less, unless that loan exceeds 20 percent of the unimpaired capital and surplus of the commercial bank; or
(4) Any liability lawfully incurred before June 1, 1937.
Total liability of one person to commercial bank
(b) The total of all liabilities of any one person to a commercial bank, including all liabilities referred to in this section, may not exceed at any time 30 percent of the unimpaired capital and surplus of the commercial bank.
Total liability of one person for loans
(c)(1) In this subsection, “loan”:
(i) Includes an obligation under a standby letter of credit; and
(ii) Does not include any discount or obligation that is subject to subsection (d) or (e) of this section.
(2) The total liability of any one person to a commercial bank for loans may not exceed at any time:
(i) 10 percent of the unimpaired capital and surplus of the commercial bank; or
(ii) 30 percent of the unimpaired capital and surplus of the commercial bank if the excess over 10 percent is approved by a two-thirds vote of the board of directors and is secured by currency or obligations of the United States or obligations of this State or any political subdivision.
Total liability of one person for discounts of commercial paper
(d)(1) In this subsection, “commercial paper” means any commercial paper issued in connection with a commercial transaction or any chattel paper, if the person negotiating the commercial paper or chattel paper owns it.
(2) The total liability of any one person to a commercial bank for discounts of commercial paper may not exceed at any time 25 percent of the unimpaired capital and surplus of the commercial bank.
Total liability of one person for obligations secured by goods
(e)(1) In this subsection, “obligations secured by goods” means obligations that are drawn in good faith against actual existing values and are:
(i) Secured by goods in the process of shipment; or
(ii) When accepted, accompanied by documents of title for these goods.
(2) The total liability of any one person to a commercial bank for obligations secured by goods may not exceed at any time 25 percent of the unimpaired capital and surplus of the commercial bank.
Application of rules set forth in subsections (g) through (j)
(f) For purposes of this section, the rules set forth in subsections (g) through (j) of this section apply in computing the total liabilities of any one person to a commercial bank.
Total liabilities of any individual to commercial bank
(g)(1) Except as provided in paragraph (2) of this subsection, the total liabilities of any individual to a commercial bank include:
(i) All liabilities to the commercial bank of any partnership or unincorporated association of which the individual is a member; and
(ii) All loans that the commercial bank makes for the benefit of the individual or for the benefit of any partnership or unincorporated association of which the individual is a member.
(2) If the individual holds only a limited interest in a limited partnership, the liabilities of the limited partnership and the loans made for its benefit that are included in the individual's total liabilities may not exceed the value of the individual's interest in the limited partnership.
Total liabilities of partnership or unincorporated association to commercial bank
(h) The total liabilities of any partnership or unincorporated association to a commercial bank include:
(1) All liabilities of its individual members to the commercial bank; and
(2) All loans that the commercial bank makes for the benefit of the partnership or association or for the benefit of any member of the partnership or association.
Total liabilities of corporation to commercial bank
(i) The total liabilities of any corporation to a commercial bank include all loans that the commercial bank makes for the benefit of the corporation.
Loan considered to be made for benefit of corporation, partnership, or unincorporated association
(j) For purposes of this section, a loan is considered to be made for the benefit of a corporation, partnership, or unincorporated association to the extent that the proceeds of the loan are transferred to the corporation, partnership, or association.
Unimpaired surplus of commercial bank
(k) For purposes of this section, “unimpaired surplus” of a commercial bank includes surplus, retained earnings, and 100 percent of the reserve for possible loan losses.
Credits
Added by Acts 1980, c. 33, § 2, eff. July 1, 1980. Amended by Acts 1981, c. 792; Acts 1995, c. 595, § 1, eff. Oct. 1, 1995.
Current through legislation effective through May 9, 2024, from the 2024 Regular Session of the General Assembly. Some statute sections may be more current, see credits for details.
