§412:6-303  Limitations on loans and
extensions of credit to one borrower.  (a)  No savings 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 savings bank.



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



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



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



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



(3)  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;



(4)  Loans and extensions of credit to the extent
secured by a pledge or security interest in a deposit account in the savings
bank serving as the lender; and



(5)  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 contract, if the savings bank's respective file or the
knowledge of its officers of the financial condition of each maker of such
consumer paper is reasonably adequate, and an officer of the savings bank
certifies in writing that the savings 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 savings bank to any person, all loans and extensions of
credit by the savings 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 savings bank, is not to be held liable to the savings bank
for the debts of the partnership, joint venture or association.  In computing
the total loans and extensions [of] credit made by a savings 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
savings bank for the debts of the partnership, joint venture or association.



(e)  Alternatively, a savings bank may, with
the prior approval of the commissioner, comply with the lending limits
applicable 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 national
banking association.  In monitoring a savings 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; am L 1994, c 107, §16]