A. 1. The total obligations to any bank or trust company of any person, copartnership, association or corporation shall at no time exceed thirty percent (30%) of the capital, less intangible assets, of the bank or trust company. For purposes of this section, the calculation of capital shall be made as of the date the bank or trust company enters into a binding commitment using data from the most recent quarterly report of condition of the bank or trust company.

2.a.The term "obligations" shall mean the direct liability, exclusive of interest, of the maker or acceptor of paper discounted with or sold to such bank and the liability, exclusive of interest, of the endorser, drawer or guarantor who obtains a loan from or discounts paper with or sells paper under the guaranty of the endorser, drawer or guarantor to such bank or trust company.

b.Loans or other extensions of credit to an industrial development authority, or similar public entity created for the purpose of constructing and leasing a plant facility to an occupant, are not an obligation of the authority for the purpose of this section if:

(1)the bank relies on the credit of the occupant in making the loan,

(2)the authority's liability with respect to the loan is limited solely to whatever interest it has in the particular facility,

(3)the authority's interest is assigned to the bank as security for the loan, and

(4)the occupant's lease rentals are assigned and paid directly to the bank.

B. The limitation set forth in paragraph 1 of subsection A of this section shall be subject to the following exceptions:

1. Loans or extensions of credit secured by not less than a like amount of bonds or notes of the United States or certificates of indebtedness of the United States, treasury bills of the United States or obligations fully guaranteed both as to principal and interest by the United States shall not be subject to any limitation based upon capital;

2. Obligations shall not be subject under this section to any limitation based upon such capital to the extent that such obligations are secured or covered by guaranties, or by commitments or agreements to take over or to purchase, made by any Federal Reserve Bank or by the United States or any department, bureau, board, commission or establishment of the United States, including any corporation wholly owned directly or indirectly by the United States;

3. Obligations secured by a segregated deposit account in the lending bank; and

4. Obligations as may be approved by the Commissioner upon written request by the bank.

C. The Board may promulgate rules to administer and implement 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 for particular classes or categories of obligations.

Added by Laws 1965, c. 161, § 802. Amended by Laws 1968, c. 93, § 8, emerg. eff. April 1, 1968; Laws 1968, c. 407, § 2, emerg. eff. May 17, 1968; Laws 1972, c. 207, § 1, emerg. eff. March 31, 1972; Laws 1975, c. 109, § 14, emerg. eff. May 7, 1975; Laws 1976, c. 66, § 1, emerg. eff. April 22, 1976; Laws 1979, c. 173, § 4; Laws 1982, c. 223, § 11; Laws 1983, c. 73, § 11, emerg. eff. April 29, 1983; Laws 1984, c. 133, § 7, eff. Oct. 1, 1984; Laws 1991, c. 128, § 5, emerg. eff. April 29, 1991; Laws 1995, c. 36, § 17, eff. July 1, 1995; Laws 1997, c. 111, § 71, eff. July 1, 1997.