§412:5-302  Limitations on loans and
extensions of credit to one borrower.  (a)  No bank shall permit a person
to become indebted or liable to it, either directly or indirectly on loans and
extensions of credit, in a total amount outstanding at any one time in excess
of twenty per cent of the capital and surplus of the bank.



(b)  This section applies to all loans and
extensions of credit made by a bank and its subsidiaries.  It does not apply to
loans and extensions of credit made by a bank or its subsidiaries to its
affiliates or subsidiaries.



(c)  The limitations set forth in this section
shall not apply to:



(1)  A bank's eligible acceptances as described in
section 412:5-204(b);



(2)  A bank's purchase or discount of another bank's
acceptances of the kinds described in section 13 of the Federal Reserve Act;



(3)  A bank's deposits with a Federal Reserve Bank,
Federal Home Loan Bank or another depository institution made in compliance
with this chapter;



(4)  A bank's sale of federal funds to another depository
institution with a maturity of one business day or under a continuing contract;



(5)  Loans and extensions of credit secured by the
interest-bearing obligations of the United States or those for which the faith
and credit of the United States are distinctly pledged to provide for the
payment of the principal and interest thereof or of the State or any county or
municipal or political subdivision of this State, issued in compliance with the
laws of this State, where the market value of the security shall be at any time
not less than one hundred five per cent of the face amount of the loans and
extensions of credit;



(6)  Loans and extensions of credit to the extent
secured by a pledge or security interest in a deposit account in the lending
bank; and



(7)  Loans and extensions of credit arising from the
discount of negotiable or nonnegotiable credit sales contracts which carry a
partial recourse endorsement or limited guarantee by the person transferring
the credit sales contracts, if the bank's respective file or the knowledge of
its officers of the financial condition of each maker of such credit sales
contract is reasonably adequate, and an officer of the bank certifies in
writing that the bank is relying primarily upon the responsibility of each
maker for payment of such credit sales contract and not upon any partial
recourse endorsement or limited guarantee by the transferor.  Under these
circumstances, such credit sales contract will be considered a loan and
extension of credit to the maker of the credit sales contract rather than the
seller of the credit sales contract.



(d)  In computing the total loans and
extensions of credit made by a bank to any person, all loans and extensions of
credit by the bank to the person and to any partnership, joint venture or
unincorporated association of which the person is a partner or a member shall
be included unless the person is a limited partner, but not a general partner,
in a limited partnership, or unless the person is a partner in a limited or
general partnership, or a member of a joint venture or unincorporated
association, if such partner or member, by law, by the terms of the
partnership, joint venture or membership agreement, or by the terms of an
agreement with the bank, is not to be held liable to the bank for the debts of
the partnership, joint venture or association.  In computing the total loans
and extensions or credit made by a bank to any firm, partnership, joint venture
or unincorporated association, all loans and extensions of credit to its
individual partners or members shall be included unless such individual partner
is a limited partner, but not a general partner, in a limited partnership, or
unless such individual partner or member, by law, by the terms of the
partnership, joint venture, or membership agreement, or by the terms of an
agreement with the bank, is not to be held liable to the bank for the debts of
the partnership, joint venture or association.



(e)  Alternatively, a bank may, with the prior
approval of the commissioner, comply with the lending limits applicable to
national banking associations, as and to the same extent it would, at the time,
be so required by federal law or regulation if it were a national banking
association.  In monitoring a bank's compliance with the national banking
association lending limits, the commissioner shall give substantial weight to
the Office of the Comptroller of the Currency's regulations and opinions
interpreting the national banking association lending limits and will regard
them as strong evidence of safe and sound banking practices. [L 1993, c 350, pt
of §1]