§412:6-303  Limitations on loans andextensions of credit to one borrower.  (a)  No savings bank shall permit aperson to become indebted or liable to it, either directly or indirectly, onloans and extensions of credit, in a total amount outstanding at any one timein excess of twenty per cent of the capital and surplus of the savings bank.

(b)  This section applies to all loans andextensions of credit made by a savings bank and its subsidiaries.  It does notapply to loans and extensions of credit made by a savings bank or itssubsidiaries to its affiliates or subsidiaries.

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

(1)  A savings bank's deposits with a Federal ReserveBank, Federal Home Loan Bank, or another depository institution made incompliance with this chapter;

(2)  A savings bank's sale of federal funds to anotherdepository institution with a maturity of one business day or under acontinuing contract;

(3)  Loans and extensions of credit secured by theinterest-bearing obligations of the United States or those for which the faithand credit of the United States are distinctly pledged to provide for thepayment of the principal and interest thereof or of the State or any county ormunicipal or political subdivision of this State, issued in compliance with thelaws of this State, where the market value of the security shall be at any timenot less than one hundred five per cent of the face amount of the loans andextensions of credit;

(4)  Loans and extensions of credit to the extentsecured by a pledge or security interest in a deposit account in the savingsbank serving as the lender; and

(5)  Loans and extensions of credit arising from thediscount of negotiable or nonnegotiable credit sales contracts which carry apartial recourse endorsement or limited guarantee by the person transferringthe credit sales contract, if the savings bank's respective file or theknowledge of its officers of the financial condition of each maker of suchconsumer paper is reasonably adequate, and an officer of the savings bankcertifies in writing that the savings bank is relying primarily upon theresponsibility of each maker for payment of such credit sales contract and notupon any partial recourse endorsement or limited guarantee by the transferor. Under these circumstances, such credit sales contract will be considered a loanand extension of credit to the maker of the credit sales contract rather thanthe seller of the credit sales contract.

(d)  In computing the total loans and extensionsof credit made by a savings bank to any person, all loans and extensions ofcredit by the savings bank to the person and to any partnership, joint ventureor unincorporated association of which the person is a partner or a membershall be included unless the person is a limited partner, but not a generalpartner, in a limited partnership, or unless the person is a partner in alimited or general partnership, or a member of a joint venture orunincorporated association, if such partner or member, by law, by the terms ofthe partnership, joint venture or membership agreement, or by the terms of anagreement with the savings bank, is not to be held liable to the savings bankfor the debts of the partnership, joint venture or association.  In computingthe total loans and extensions [of] credit made by a savings bank to any firm,partnership, joint venture or unincorporated association, all loans andextensions of credit to its individual partners or members shall be includedunless 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 bythe terms of an agreement with the bank, is not to be held liable to thesavings bank for the debts of the partnership, joint venture or association.

(e)  Alternatively, a savings bank may, withthe prior approval of the commissioner, comply with the lending limitsapplicable to national banking association, as and to the same extent it would,at the time, be so required by federal law or regulation if it were a nationalbanking association.  In monitoring a savings bank's compliance with thenational banking association lending limits, the commissioner shall givesubstantial weight to the Office of the Comptroller of the Currency'sregulations and opinions interpreting the national banking association lendinglimits and will regard them as strong evidence of safe and sound bankingpractices. [L 1993, c 350, pt of §1; am L 1994, c 107, §16]