RS 6:415 Loans; restrictions; penalties
§415. Loans; restrictions; penalties
A. A state bank shall not loan on an unsecured basis to any one borrower, directly or indirectly, an amount in excess of twenty percent of the sum of its capital stock and surplus.
B. A state bank shall not loan on a secured basis to any one borrower, directly or indirectly, an amount in excess of one-half the sum of its capital stock and surplus. However, a state bank may loan to one borrower an amount not to exceed the sum of its capital stock and surplus, but only when such loan is secured by a pledge of obligations of the United States of America, or of the state of Louisiana, or any subdivision or municipality thereof, or is a commodity loan secured by readily marketable staples.
C. Loans and other extensions of credit which are fully secured by a pledge of any deposit of the lending bank are not subject to any of the limits prescribed by this Section.
D. The acceptance of drafts and the issuance of letters of credit shall also be subject to this Section.
E. A state bank's capital stock and surplus shall be reduced by the amount of the negative undivided profits taking into account current operating income for purposes of calculating the maximum loan amounts in Subsections A and B of this Section. This Subsection shall not apply to the renewal of a loan that was within the legal loan limit when originated.
F. In accordance with regulations promulgated by the commissioner, a state bank may acquire a pool of loans and other extensions of credit or a participation in such pool of loans or extensions of credit from other entities, with partial or full recourse to those entities to the extent that the limits prescribed in Subsections A and B apply to individual loans contained in the pool, provided that an executive officer of the bank, designated by the board of directors, affirm by affidavit that a representative portion of the individual loans has been reviewed by him, or by a qualified third party who has contracted with the bank for that purpose, to determine that they appear to be credit worthy, and that the bank is relying primarily on the responsibility of each maker for payment of the loans or extensions of credit and not on a full or partial recourse endorsement and guarantee by the transferor.
G. In accordance with regulations promulgated by the commissioner, a state bank may make a loan or other extension of credit which would otherwise exceed the limits prescribed in Subsections A and B when the purpose of the loan is to finance the sale of real estate acquired for debts previously contracted or for use as bank premises. Such loans may only be made upon prior written approval of the commissioner.
H. Whoever violates any of the provisions of this Section may be subject to a fine of not more than one thousand dollars per day for each day such violation continues.
Acts 1984, No. 719, §1, eff. Jan. 1, 1985; Acts 1986, No. 9, §1; Acts 1991, No. 200, §1, eff. July 2, 1991; Acts 1992, No. 1129, §1, eff. Sept. 1, 1992; Acts 1993, No. 281, §1, eff. July 1, 1993; Acts 1999, No. 260, §1; Acts 2001, No. 529, §1, eff. June 21, 2001.