§ 516. Limits on indebtedness of one customer, including purchased paper
Purdon's Pennsylvania Statutes and Consolidated StatutesTitle 7 P.S. Banks and BankingEffective: December 24, 2012
Effective: December 24, 2012
7 P.S. § 516
§ 516. Limits on indebtedness of one customer, including purchased paper
(a) General limit--A savings bank shall not at any time acquire indebtedness of any one customer, which includes an individual or any legal entity, of the types specified in this section, in an amount which together with all other such indebtedness then held would exceed fifteen percent of the capital accounts of the savings bank. If the department determines at any time that the interests of a group of more than one individual, partnership, unincorporated association or corporation are so interrelated that they should be considered as a unit for the purpose of extensions of credit, the total indebtedness of that group acquired at any time shall be combined and deemed indebtedness acquired from one customer in applying the limitation of this section. A savings bank shall not be deemed to have violated this section solely by reason of the fact that the indebtedness of a group then held exceeds the limitation of this section at the time of a determination by the department that the indebtedness of that group must be combined but the institution shall, if required by the department, dispose of indebtedness of the group in the amount in excess of the limitation of this section within such reasonable time as shall be fixed by the department.
(iii) to the extent that they exceed fifteen percent of the capital accounts of the savings bank, obligations of the customer as indorser or guarantor of notes, other than those excluded by subsection (c)(ii), having a maturity of not more than six months and actually owned by the customer transferring the notes,
(C) readily marketable frozen or refrigerated staples for a period of not more than six months from the date of the document of the title if such property has a market value of not less than one hundred fifteen percent of the amount of the obligation secured thereby and is fully covered by insurance,
(B) obligations that the savings bank would be authorized to acquire without limit as investment securities pursuant to section 504,1
(d) Regulation--The department may by regulation not inconsistent with the provisions of this section and section 1414(c)2 prescribe definitions of and requirements for transactions included in or excluded from the indebtedness to which the fifteen percent limitation of this section applies.
“Capital accounts”--the aggregate of capital, surplus, undivided profits, capital securities and reserve for loan losses of the savings bank. Reserve for loan losses shall mean that portion of a savings bank's earnings set aside as a general reserve to absorb possible future losses on loans as of the last complete calendar or fiscal year, carried in an account captioned “reserve for loan loss” or “reserve for bad debts.”
“Derivative transaction”--any transaction that is a contract, agreement, swap, warrant, note or option that is based, in whole or in part, on the value of, any interest in or any quantitative measure or the occurrence of any event relating to, one or more commodities, securities, currencies, interest or other rates, indices or other assets.
Credits
1965, Nov. 30, P.L. 847, No. 356, § 516, added 2012, Oct. 24, P.L. 1336, No. 170, § 27, effective in 60 days [Dec. 24, 2012].
7 P.S. § 516, PA ST 7 P.S. § 516
Current through Act 10 of the 2024 Regular Session. Some statute sections may be more current, see credits for details.
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