SECTION
34-13-50. Maximum
amounts of loans; generally.
(A) The total liabilities,
direct and indirect, of any one
borrower to a bank, including in
the liabilities of a company or
firm the liabilities of its
several members, may never
exceed ten percent of the bank's
unimpaired capital, except by
two-thirds vote of the directors
of the bank, in which case
liabilities other than those of
officers and directors as
described in Section 34-13-80
may be extended to fifteen
percent of the bank's unimpaired
capital. However, liabilities
may be extended by an additional
amount not to exceed thirty-five
percent of the unimpaired
capital of the bank when the
additional loans are secured by
direct obligations of the United
States Government or direct
obligations of this State. The
discount of bills of exchange
drawn in good faith against
existing values and the discount
of commercial or business paper
are not considered money
borrowed.
(B) For purposes of this
section, "unimpaired capital"
means the total of the amount
of:
(5) reserve for contingencies
and other capital reserves,
excluding accrued dividends on
perpetual and limited life
preferred stock;
(6) mandatory convertible
debt;
(7) allowance for loan
losses; and
(8) capital debentures or
notes, convertible or otherwise,
having an average original
maturity of at least seven years
and having been designated
specifically as part of the
bank's unimpaired capital by
resolution duly adopted by the
board of directors of the bank.
SECTION
34-13-60. Maximum
amounts of loans; exceptions for
certain loans secured by
shipping documents and the like.
Notwithstanding the
provisions of Section 34-13-50
the obligations of any person in
the form of notes or drafts
secured by shipping documents,
warehouse receipts or other such
documents transferring or
securing title covering readily
marketable nonperishable staples
when such property is fully
covered by insurance, if it is
customary to insure such
staples, shall be subject:
(1) To a limitation of
twenty-five per cent of such
capital and surplus when the
market value of such staples
securing such obligations is not
at any time less than one
hundred and fifteen per cent of
the face amount of such
obligations;
(2) To a limitation of thirty
per cent of such capital and
surplus when the market value of
such staples securing such
obligations is not at any time
less than one hundred and twenty
per cent of the face amount of
such obligations; and
(3) To a limitation in
addition to such thirty per cent
of such capital and surplus
increased by an additional five
per cent thereof for each and
every additional five per centum
of the market value of such
staples securing such
obligations not in excess,
however, of a total limitation
of fifty per cent of such
capital and surplus.
But this exception shall not
apply to obligations of any one
person arising from the same
transaction or secured upon the
identical staples for more than
ten months.
SECTION
34-13-70. Maximum
amounts of loans; another
maximum.
In no case shall a loan be
made by any State bank which
when added to the then existing
total loans to the borrower
thereof would increase the total
to more than twenty-five per
cent of the capital, surplus and
deposits of the bank, less the
amount invested in real estate,
bonds or other securities.
SECTION
34-13-80.
Limitations on loans to
directors and officers.
Directors and officers of any
bank incorporated under the laws
of this State, members of their
families, and entities with
which they are associated, may
borrow or obtain credit from the
bank in the same manner and
under the same terms and
conditions that directors and
officers, members of their
families, and entities with
which they are associated, of
any national bank are permitted
to borrow or obtain credit from
the national bank as provided by
law.
SECTION
34-13-90. Penalty
for improper borrowing by
directors or officers.
A person who violates the
provisions of Section 34-13-80
is guilty of a felony and, upon
conviction, must be fined in the
discretion of the court or
imprisoned not more than ten
years, or both.
SECTION
34-13-100.
Investigation of security
consisting of warehouse
receipts.
When warehouse receipts for
products are pledged as
securities in any State bank
under examination the examiner
of such bank may go upon the
premises of the person issuing
the receipts, question the
management under oath and, if
thought necessary, have the
actual product exhibited to him.
SECTION
34-13-110. Certain
discounts are not considered as
money borrowed.
The discount of bills of
exchange drawn in good faith
against existing values and the
discount of commercial business
paper shall not be considered as
money borrowed.
SECTION
34-13-130. Repealed
by 1995 Act No. 26, Section 1,
eff upon approval (became law
without the Governor's signature
on April 6, 1995).
SECTION
34-13-140.
Restrictions on loan on or
purchase of bank's own stock.
It shall be unlawful for any
banking association to make any
loan or discount on the security
of the shares of its own capital
stock or to be the purchaser or
holder of any such shares unless
such security or purchase shall
be necessary to prevent loss
upon a debt previously
contracted in good faith.
SECTION
34-13-150.
Investment of funds in Federal
savings and loan associations,
building and loan associations,
and the like.
It shall be lawful for any
building and loan association,
bank, trust company or other
financial institution operating
or doing business in the State
or under the laws of the State
or the United States, any
national bank or the receiver of
any bank, trust company,
building and loan association or
other financial institution
operating under the laws of this
State or of the United States to
invest its funds or the moneys
in its custody or possession
eligible for investment in the
shares of any Federal savings
and loan association or in the
shares of any building and loan
association organized and
existing under the laws of this
State when such shares are
insured by the Federal Savings
and Loan Insurance Corporation
and also in the bonds or
debentures issued by any Federal
home loan bank or in the
consolidated bonds or debentures
issued by the Federal Home Loan
Bank Board.
SECTION
34-13-160.
Investment in farm loan bonds
and the like; accountability for
interest thereon.
Any banking institution or
trust company organized under
the laws of this State may
invest in, or lend money on the
security of: Federal farm loan
bonds issued by Federal land
banks pursuant to the Federal
Farm Loan Act as amended, bonds
issued by the Federal Farm
Mortgage Corporation pursuant to
the provisions of an act of
Congress known as the "Federal
Farm Mortgage Corporation Act,"
Federal Intermediate Credit Bank
debentures issued pursuant to
the Federal Farm Loan Act as
amended, and debentures issued
by the Central Bank for
Cooperatives and regional banks
for cooperatives, organized
under the Farm Credit Act of
1933, and any notes, bonds,
debentures, or other similar
obligations, consolidated or
otherwise, issued by farm credit
institutions pursuant to
authorities contained in the
Farm Credit Act of 1971 (Public
Law 92-181) or by any of such
banks. A banking institution or
trust company organized under
the laws of this State making an
investment or loan authorized by
this section shall not be
chargeable in its account for a
greater rate of interest than
the amount actually received on
the investment or loan.
SECTION
34-13-170.
Investment in bank service
corporations.
(1) Citation of section. -
This section shall be cited as
the "Bank Service Corporation
Act."
(2) Definitions. - For the
purposes of this section-
(a) The term "bank service
corporation" means a corporation
whose primary purpose is to
perform for two or more banks
having an investment in the
corporation services such as
check and deposit sorting and
posting, computation and posting
of interest and other credits
and charges, preparation and
mailing of statements, notices,
and similar items, or any other
similar clerical or bookkeeping
function.
(b) The terms "invest" and
"investment" include any advance
of funds to a bank service
corporation, whether by purchase
of stock, the making of a loan,
or otherwise, except a payment
for earned rent, goods sold and
delivered, or services rendered
prior to the making of such
payment.
(3) Investments. -
Notwithstanding any contrary
provision of law relating to
banks, a bank may at any time
have outstanding investments in
a bank service corporation not
exceeding ten per cent of the
bank's capital and surplus at
such time.