State Codes and Statutes

Statutes > California > Fin > 7450-7462

FINANCIAL CODE
SECTION 7450-7462



7450.  (a) An association may make any loan authorized by this
division, but the association shall first determine that the type,
amount, purpose, and repayment provisions of the loan in relation to
the borrower's resources and credit standing support the reasonable
belief that the loan will be financially sound and will be repaid
according to its terms, and that the loan is not otherwise unlawful.
   (b) Subject to any regulations of the commissioner, an association
may make or acquire loans directly or indirectly to or from any
director, officer, affiliated person, or any parent or subsidiary.
Loans made or acquired, directly or indirectly, the proceeds of which
are intended to inure or have inured to the benefit of these parties
are subject to the same regulations.



7450.2.  Except with the prior written consent of the commissioner,
no association shall knowingly make:
   (a) Any loan to any corporation of which 10 percent or more of the
stock is owned or controlled individually or collectively by any one
or more of the directors, officers, employees, or substantial
stockholders of the association.
   As used in this subdivision, "substantial stockholder" means a
person who has a real or beneficial ownership of more than 10 percent
of the outstanding stock of the association. For this purpose, stock
owned by the person's immediate family shall be deemed owned by that
person.
   (b) Any loan the proceeds of which are intended to inure to the
benefit of any corporation specified in subdivision (a).



7451.  Except as otherwise provided by the commissioner, an
association shall not make or acquire total loans with respect to one
borrower or on one project in an amount exceeding 25 percent of the
net worth of the association. As used in this section, "one borrower"
has the meaning defined in Section 7453.



7452.  (a) An association may make consumer loans, provided that the
total of such loans shall not exceed 30-percent of the assets of the
association.
   (b) An association may include loans to dealers in consumer goods
to finance inventory and floor planning in the total investment as
part of the 30-percent limitation described in subdivision (a). For
purposes of the limitations on loans to one borrower, loans to
dealers in consumer goods to finance inventory and floor planning
shall be treated as commercial loans.



7453.  (a) An association may make, invest in, sell, purchase,
participate in, or otherwise deal in secured or unsecured loans for
agricultural, business, commercial, or corporate purposes, provided
that the total investment in such loans does not exceed 10 percent of
the assets of the association.
   (b) An association may invest in, sell, purchase, participate in,
or otherwise deal in loans specified in subdivision (a) which are
originated by any savings association, federal association, holding
company of a federally insured savings association, commercial bank,
bank holding company, subsidiary of a bank holding company, or
insurance company, provided that the total investment in such loans
shall not exceed 10 percent of the association's assets.
   (c) For the purposes of this section, the term "loan" does not
include any corporate debt security unless it is rated in one of the
four highest rating categories by at least one nationally recognized
rating service.
   (d) No association shall make, invest in, purchase, or participate
in a loan for agricultural, business, commercial, or corporate
purposes to one borrower, except as the commissioner may approve in
writing, if the sum of the amount of the association's interest in
the loan and the total balance of the association's interest in all
outstanding loans for those purposes owed to the association by that
borrower exceed the greater of (1) the amount a national bank having
an identical total capital and surplus could lend to one borrower, or
(2) the amount a commercial bank, as defined in Section 105, having
an identical total shareholders' equity, capital notes, and
debentures, could lend to one borrower. This subdivision shall not
apply to loans (1) secured by real property, (2) sold without
recourse, (3) on the security of the association's deposit accounts,
or (4) of unsecured day funds, including federal funds or similar
unsecured loans.
   (e) As used in this section the term "one borrower" means:
   (1) Any person that is, or upon the making of a loan will become,
an obligor on the loans. However, a guarantor shall not be included
within the meaning of "obligor" if, in connection with a loan the
association has determined, in good faith, that the primary obligor
has qualified for the loan irrespective of the existence of the
guarantor. In the case of a loan that has been assumed by a third
party with the consent of the association, the former debtor and any
guarantor shall not be deemed to be an "obligor."
   (2) Nominees of the obligor.
   (3) All persons, trusts, syndicates, partnerships and corporations
of which the obligor is a nominee, a beneficiary, a member, a
general partner, a limited partner owning an interest of 10 percent
or more based on the value of his or her capital contribution, or a
record or beneficial stockholder owning 10 percent or more of the
capital stock.
   (4) If the obligor is a trust, syndicate, partnership or
corporation, all trusts, syndicates, partnerships and corporations of
which any beneficiary, member, general partner, limited partner
owning an interest of 10 percent or more based on the value of his or
her capital contribution, or record or beneficial stockholder owning
10 percent or more of the capital stock, is also a beneficiary,
member, general partner, limited partner owning an interest of 10
percent or more based on the value of his or her capital
contribution, or record or beneficial stockholder owning 10 percent
or more of the capital stock of the obligor.



7454.  Each association is authorized to issue credit cards, extend
credit in connection with the cards, and otherwise engage in or
participate in credit card operations. The provisions of Title 2
(commencing with Section 1801) of the Civil Code shall not apply to
any credit extended by an association pursuant to the provisions of
this section.



7455.  No association or director, officer, or employee of an
association shall require, as a condition to the granting of any loan
or the extension of any other service by the association, that the
borrower or any other person undertake a contract of insurance with
any specific company, agency, or individual.



7456.  Any loan commitment made by an association shall be counted
as an investment and shall be included in total assets of the
association only to the extent that funds have been advanced (and not
repaid) pursuant to the commitment. For the purposes of this
section, the term "loan commitment" includes a loan in process, a
letter of credit, or any other commitment to extend credit.



7457.  An association may make loans on the security of its savings
accounts, whether or not the borrower is the owner of the account,
subject to the limitations of this article.



7458.  An association may make overdraft loans specifically related
to transaction accounts, subject to regulations issued by the
commissioner.


7459.  In addition to establishing reserves pursuant to Section
6476, an association or federal association, as defined in Section
5102, may establish a separate loan reserve account regarding losses
resulting from fraud by a borrower and may recover any of those
losses from that borrower.



7460.  (a) Notwithstanding Section 726 of the Code of Civil
Procedure or any other provision of law to the contrary, an
association, a federal association, an affiliate of an association or
federal association, a service corporation, or any successor in
interest thereto, that originates, acquires, or purchases, in whole
or in part, any loan secured directly or collaterally, in whole or in
part, by a mortgage or deed of trust on real property, or any
interest therein, may bring an action for recovery of damages,
including exemplary damages not to exceed 50 percent of the actual
damages, against a borrower where the action is based on fraud under
Section 1572 of the Civil Code and the fraudulent conduct by the
borrower induced the original lender to make that loan.
   (b) The provisions of this section shall not apply to loans
secured by single-family, owner-occupied residential real property,
when the property is actually occupied by the borrower as represented
to the lender in order to obtain the loan and the loan is for an
amount of one hundred fifty thousand dollars ($150,000) or less, as
adjusted annually, commencing on January 1, 1987, to the Consumer
Price Index as published by the United States Department of Labor.
   (c) Any action maintained under this section for damages shall not
constitute a money judgment for deficiency or a deficiency judgment
within the meaning of Section 580a, 580b, or 580d of the Code of
Civil Procedure.



7461.  The provisions of any deed of trust or mortgage on real
property which authorize an association, federal association,
affiliate or service corporation of an association or federal
association, or any successor in interest thereto, to accelerate the
maturity date of the principal and interest on any loan secured
thereby or to exercise any power of sale or other remedy contained
therein upon the failure of the trustor or mortgagor to pay, at the
times provided for under the terms of the deed of trust or mortgage,
any taxes, rents, assessments, or insurance premiums with respect to
the property or the loan, or any advances made by the association,
federal association, affiliate or service corporation of an
association or federal association, or any successor in interest
thereto, shall be enforceable whether or not impairment of the
security interest in the property has resulted from the failure of
the trustor or mortgagor to so pay the taxes, rents, assessments,
insurance premiums, or advances.



7462.  The provisions of any deed of trust or mortgage on real
property which authorize an association, federal association,
affiliate or service corporation of an association or federal
association, or any successor in interest thereto, to receive and
control the disbursement of the proceeds of any policy of fire,
flood, or other hazard insurance respecting the property shall be
enforceable whether or not impairment of the security interest in the
property has resulted from the event that caused the proceeds of the
insurance policy to become payable.

State Codes and Statutes

Statutes > California > Fin > 7450-7462

FINANCIAL CODE
SECTION 7450-7462



7450.  (a) An association may make any loan authorized by this
division, but the association shall first determine that the type,
amount, purpose, and repayment provisions of the loan in relation to
the borrower's resources and credit standing support the reasonable
belief that the loan will be financially sound and will be repaid
according to its terms, and that the loan is not otherwise unlawful.
   (b) Subject to any regulations of the commissioner, an association
may make or acquire loans directly or indirectly to or from any
director, officer, affiliated person, or any parent or subsidiary.
Loans made or acquired, directly or indirectly, the proceeds of which
are intended to inure or have inured to the benefit of these parties
are subject to the same regulations.



7450.2.  Except with the prior written consent of the commissioner,
no association shall knowingly make:
   (a) Any loan to any corporation of which 10 percent or more of the
stock is owned or controlled individually or collectively by any one
or more of the directors, officers, employees, or substantial
stockholders of the association.
   As used in this subdivision, "substantial stockholder" means a
person who has a real or beneficial ownership of more than 10 percent
of the outstanding stock of the association. For this purpose, stock
owned by the person's immediate family shall be deemed owned by that
person.
   (b) Any loan the proceeds of which are intended to inure to the
benefit of any corporation specified in subdivision (a).



7451.  Except as otherwise provided by the commissioner, an
association shall not make or acquire total loans with respect to one
borrower or on one project in an amount exceeding 25 percent of the
net worth of the association. As used in this section, "one borrower"
has the meaning defined in Section 7453.



7452.  (a) An association may make consumer loans, provided that the
total of such loans shall not exceed 30-percent of the assets of the
association.
   (b) An association may include loans to dealers in consumer goods
to finance inventory and floor planning in the total investment as
part of the 30-percent limitation described in subdivision (a). For
purposes of the limitations on loans to one borrower, loans to
dealers in consumer goods to finance inventory and floor planning
shall be treated as commercial loans.



7453.  (a) An association may make, invest in, sell, purchase,
participate in, or otherwise deal in secured or unsecured loans for
agricultural, business, commercial, or corporate purposes, provided
that the total investment in such loans does not exceed 10 percent of
the assets of the association.
   (b) An association may invest in, sell, purchase, participate in,
or otherwise deal in loans specified in subdivision (a) which are
originated by any savings association, federal association, holding
company of a federally insured savings association, commercial bank,
bank holding company, subsidiary of a bank holding company, or
insurance company, provided that the total investment in such loans
shall not exceed 10 percent of the association's assets.
   (c) For the purposes of this section, the term "loan" does not
include any corporate debt security unless it is rated in one of the
four highest rating categories by at least one nationally recognized
rating service.
   (d) No association shall make, invest in, purchase, or participate
in a loan for agricultural, business, commercial, or corporate
purposes to one borrower, except as the commissioner may approve in
writing, if the sum of the amount of the association's interest in
the loan and the total balance of the association's interest in all
outstanding loans for those purposes owed to the association by that
borrower exceed the greater of (1) the amount a national bank having
an identical total capital and surplus could lend to one borrower, or
(2) the amount a commercial bank, as defined in Section 105, having
an identical total shareholders' equity, capital notes, and
debentures, could lend to one borrower. This subdivision shall not
apply to loans (1) secured by real property, (2) sold without
recourse, (3) on the security of the association's deposit accounts,
or (4) of unsecured day funds, including federal funds or similar
unsecured loans.
   (e) As used in this section the term "one borrower" means:
   (1) Any person that is, or upon the making of a loan will become,
an obligor on the loans. However, a guarantor shall not be included
within the meaning of "obligor" if, in connection with a loan the
association has determined, in good faith, that the primary obligor
has qualified for the loan irrespective of the existence of the
guarantor. In the case of a loan that has been assumed by a third
party with the consent of the association, the former debtor and any
guarantor shall not be deemed to be an "obligor."
   (2) Nominees of the obligor.
   (3) All persons, trusts, syndicates, partnerships and corporations
of which the obligor is a nominee, a beneficiary, a member, a
general partner, a limited partner owning an interest of 10 percent
or more based on the value of his or her capital contribution, or a
record or beneficial stockholder owning 10 percent or more of the
capital stock.
   (4) If the obligor is a trust, syndicate, partnership or
corporation, all trusts, syndicates, partnerships and corporations of
which any beneficiary, member, general partner, limited partner
owning an interest of 10 percent or more based on the value of his or
her capital contribution, or record or beneficial stockholder owning
10 percent or more of the capital stock, is also a beneficiary,
member, general partner, limited partner owning an interest of 10
percent or more based on the value of his or her capital
contribution, or record or beneficial stockholder owning 10 percent
or more of the capital stock of the obligor.



7454.  Each association is authorized to issue credit cards, extend
credit in connection with the cards, and otherwise engage in or
participate in credit card operations. The provisions of Title 2
(commencing with Section 1801) of the Civil Code shall not apply to
any credit extended by an association pursuant to the provisions of
this section.



7455.  No association or director, officer, or employee of an
association shall require, as a condition to the granting of any loan
or the extension of any other service by the association, that the
borrower or any other person undertake a contract of insurance with
any specific company, agency, or individual.



7456.  Any loan commitment made by an association shall be counted
as an investment and shall be included in total assets of the
association only to the extent that funds have been advanced (and not
repaid) pursuant to the commitment. For the purposes of this
section, the term "loan commitment" includes a loan in process, a
letter of credit, or any other commitment to extend credit.



7457.  An association may make loans on the security of its savings
accounts, whether or not the borrower is the owner of the account,
subject to the limitations of this article.



7458.  An association may make overdraft loans specifically related
to transaction accounts, subject to regulations issued by the
commissioner.


7459.  In addition to establishing reserves pursuant to Section
6476, an association or federal association, as defined in Section
5102, may establish a separate loan reserve account regarding losses
resulting from fraud by a borrower and may recover any of those
losses from that borrower.



7460.  (a) Notwithstanding Section 726 of the Code of Civil
Procedure or any other provision of law to the contrary, an
association, a federal association, an affiliate of an association or
federal association, a service corporation, or any successor in
interest thereto, that originates, acquires, or purchases, in whole
or in part, any loan secured directly or collaterally, in whole or in
part, by a mortgage or deed of trust on real property, or any
interest therein, may bring an action for recovery of damages,
including exemplary damages not to exceed 50 percent of the actual
damages, against a borrower where the action is based on fraud under
Section 1572 of the Civil Code and the fraudulent conduct by the
borrower induced the original lender to make that loan.
   (b) The provisions of this section shall not apply to loans
secured by single-family, owner-occupied residential real property,
when the property is actually occupied by the borrower as represented
to the lender in order to obtain the loan and the loan is for an
amount of one hundred fifty thousand dollars ($150,000) or less, as
adjusted annually, commencing on January 1, 1987, to the Consumer
Price Index as published by the United States Department of Labor.
   (c) Any action maintained under this section for damages shall not
constitute a money judgment for deficiency or a deficiency judgment
within the meaning of Section 580a, 580b, or 580d of the Code of
Civil Procedure.



7461.  The provisions of any deed of trust or mortgage on real
property which authorize an association, federal association,
affiliate or service corporation of an association or federal
association, or any successor in interest thereto, to accelerate the
maturity date of the principal and interest on any loan secured
thereby or to exercise any power of sale or other remedy contained
therein upon the failure of the trustor or mortgagor to pay, at the
times provided for under the terms of the deed of trust or mortgage,
any taxes, rents, assessments, or insurance premiums with respect to
the property or the loan, or any advances made by the association,
federal association, affiliate or service corporation of an
association or federal association, or any successor in interest
thereto, shall be enforceable whether or not impairment of the
security interest in the property has resulted from the failure of
the trustor or mortgagor to so pay the taxes, rents, assessments,
insurance premiums, or advances.



7462.  The provisions of any deed of trust or mortgage on real
property which authorize an association, federal association,
affiliate or service corporation of an association or federal
association, or any successor in interest thereto, to receive and
control the disbursement of the proceeds of any policy of fire,
flood, or other hazard insurance respecting the property shall be
enforceable whether or not impairment of the security interest in the
property has resulted from the event that caused the proceeds of the
insurance policy to become payable.


State Codes and Statutes

State Codes and Statutes

Statutes > California > Fin > 7450-7462

FINANCIAL CODE
SECTION 7450-7462



7450.  (a) An association may make any loan authorized by this
division, but the association shall first determine that the type,
amount, purpose, and repayment provisions of the loan in relation to
the borrower's resources and credit standing support the reasonable
belief that the loan will be financially sound and will be repaid
according to its terms, and that the loan is not otherwise unlawful.
   (b) Subject to any regulations of the commissioner, an association
may make or acquire loans directly or indirectly to or from any
director, officer, affiliated person, or any parent or subsidiary.
Loans made or acquired, directly or indirectly, the proceeds of which
are intended to inure or have inured to the benefit of these parties
are subject to the same regulations.



7450.2.  Except with the prior written consent of the commissioner,
no association shall knowingly make:
   (a) Any loan to any corporation of which 10 percent or more of the
stock is owned or controlled individually or collectively by any one
or more of the directors, officers, employees, or substantial
stockholders of the association.
   As used in this subdivision, "substantial stockholder" means a
person who has a real or beneficial ownership of more than 10 percent
of the outstanding stock of the association. For this purpose, stock
owned by the person's immediate family shall be deemed owned by that
person.
   (b) Any loan the proceeds of which are intended to inure to the
benefit of any corporation specified in subdivision (a).



7451.  Except as otherwise provided by the commissioner, an
association shall not make or acquire total loans with respect to one
borrower or on one project in an amount exceeding 25 percent of the
net worth of the association. As used in this section, "one borrower"
has the meaning defined in Section 7453.



7452.  (a) An association may make consumer loans, provided that the
total of such loans shall not exceed 30-percent of the assets of the
association.
   (b) An association may include loans to dealers in consumer goods
to finance inventory and floor planning in the total investment as
part of the 30-percent limitation described in subdivision (a). For
purposes of the limitations on loans to one borrower, loans to
dealers in consumer goods to finance inventory and floor planning
shall be treated as commercial loans.



7453.  (a) An association may make, invest in, sell, purchase,
participate in, or otherwise deal in secured or unsecured loans for
agricultural, business, commercial, or corporate purposes, provided
that the total investment in such loans does not exceed 10 percent of
the assets of the association.
   (b) An association may invest in, sell, purchase, participate in,
or otherwise deal in loans specified in subdivision (a) which are
originated by any savings association, federal association, holding
company of a federally insured savings association, commercial bank,
bank holding company, subsidiary of a bank holding company, or
insurance company, provided that the total investment in such loans
shall not exceed 10 percent of the association's assets.
   (c) For the purposes of this section, the term "loan" does not
include any corporate debt security unless it is rated in one of the
four highest rating categories by at least one nationally recognized
rating service.
   (d) No association shall make, invest in, purchase, or participate
in a loan for agricultural, business, commercial, or corporate
purposes to one borrower, except as the commissioner may approve in
writing, if the sum of the amount of the association's interest in
the loan and the total balance of the association's interest in all
outstanding loans for those purposes owed to the association by that
borrower exceed the greater of (1) the amount a national bank having
an identical total capital and surplus could lend to one borrower, or
(2) the amount a commercial bank, as defined in Section 105, having
an identical total shareholders' equity, capital notes, and
debentures, could lend to one borrower. This subdivision shall not
apply to loans (1) secured by real property, (2) sold without
recourse, (3) on the security of the association's deposit accounts,
or (4) of unsecured day funds, including federal funds or similar
unsecured loans.
   (e) As used in this section the term "one borrower" means:
   (1) Any person that is, or upon the making of a loan will become,
an obligor on the loans. However, a guarantor shall not be included
within the meaning of "obligor" if, in connection with a loan the
association has determined, in good faith, that the primary obligor
has qualified for the loan irrespective of the existence of the
guarantor. In the case of a loan that has been assumed by a third
party with the consent of the association, the former debtor and any
guarantor shall not be deemed to be an "obligor."
   (2) Nominees of the obligor.
   (3) All persons, trusts, syndicates, partnerships and corporations
of which the obligor is a nominee, a beneficiary, a member, a
general partner, a limited partner owning an interest of 10 percent
or more based on the value of his or her capital contribution, or a
record or beneficial stockholder owning 10 percent or more of the
capital stock.
   (4) If the obligor is a trust, syndicate, partnership or
corporation, all trusts, syndicates, partnerships and corporations of
which any beneficiary, member, general partner, limited partner
owning an interest of 10 percent or more based on the value of his or
her capital contribution, or record or beneficial stockholder owning
10 percent or more of the capital stock, is also a beneficiary,
member, general partner, limited partner owning an interest of 10
percent or more based on the value of his or her capital
contribution, or record or beneficial stockholder owning 10 percent
or more of the capital stock of the obligor.



7454.  Each association is authorized to issue credit cards, extend
credit in connection with the cards, and otherwise engage in or
participate in credit card operations. The provisions of Title 2
(commencing with Section 1801) of the Civil Code shall not apply to
any credit extended by an association pursuant to the provisions of
this section.



7455.  No association or director, officer, or employee of an
association shall require, as a condition to the granting of any loan
or the extension of any other service by the association, that the
borrower or any other person undertake a contract of insurance with
any specific company, agency, or individual.



7456.  Any loan commitment made by an association shall be counted
as an investment and shall be included in total assets of the
association only to the extent that funds have been advanced (and not
repaid) pursuant to the commitment. For the purposes of this
section, the term "loan commitment" includes a loan in process, a
letter of credit, or any other commitment to extend credit.



7457.  An association may make loans on the security of its savings
accounts, whether or not the borrower is the owner of the account,
subject to the limitations of this article.



7458.  An association may make overdraft loans specifically related
to transaction accounts, subject to regulations issued by the
commissioner.


7459.  In addition to establishing reserves pursuant to Section
6476, an association or federal association, as defined in Section
5102, may establish a separate loan reserve account regarding losses
resulting from fraud by a borrower and may recover any of those
losses from that borrower.



7460.  (a) Notwithstanding Section 726 of the Code of Civil
Procedure or any other provision of law to the contrary, an
association, a federal association, an affiliate of an association or
federal association, a service corporation, or any successor in
interest thereto, that originates, acquires, or purchases, in whole
or in part, any loan secured directly or collaterally, in whole or in
part, by a mortgage or deed of trust on real property, or any
interest therein, may bring an action for recovery of damages,
including exemplary damages not to exceed 50 percent of the actual
damages, against a borrower where the action is based on fraud under
Section 1572 of the Civil Code and the fraudulent conduct by the
borrower induced the original lender to make that loan.
   (b) The provisions of this section shall not apply to loans
secured by single-family, owner-occupied residential real property,
when the property is actually occupied by the borrower as represented
to the lender in order to obtain the loan and the loan is for an
amount of one hundred fifty thousand dollars ($150,000) or less, as
adjusted annually, commencing on January 1, 1987, to the Consumer
Price Index as published by the United States Department of Labor.
   (c) Any action maintained under this section for damages shall not
constitute a money judgment for deficiency or a deficiency judgment
within the meaning of Section 580a, 580b, or 580d of the Code of
Civil Procedure.



7461.  The provisions of any deed of trust or mortgage on real
property which authorize an association, federal association,
affiliate or service corporation of an association or federal
association, or any successor in interest thereto, to accelerate the
maturity date of the principal and interest on any loan secured
thereby or to exercise any power of sale or other remedy contained
therein upon the failure of the trustor or mortgagor to pay, at the
times provided for under the terms of the deed of trust or mortgage,
any taxes, rents, assessments, or insurance premiums with respect to
the property or the loan, or any advances made by the association,
federal association, affiliate or service corporation of an
association or federal association, or any successor in interest
thereto, shall be enforceable whether or not impairment of the
security interest in the property has resulted from the failure of
the trustor or mortgagor to so pay the taxes, rents, assessments,
insurance premiums, or advances.



7462.  The provisions of any deed of trust or mortgage on real
property which authorize an association, federal association,
affiliate or service corporation of an association or federal
association, or any successor in interest thereto, to receive and
control the disbursement of the proceeds of any policy of fire,
flood, or other hazard insurance respecting the property shall be
enforceable whether or not impairment of the security interest in the
property has resulted from the event that caused the proceeds of the
insurance policy to become payable.

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