§412:9-404  Limitation on loans and
extensions of credit to one borrower.  (a)  No depository financial
services loan company 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
depository financial services loan company's capital and surplus; provided that
such aggregate amount may be increased to one hundred per cent of the
depository financial services loan company's capital and surplus if the loans
and extensions of credit made to the person in excess of twenty per cent of the
depository financial services loan company's capital and surplus are fully
secured by real property as provided in section 412:9‑405.



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



(1)  Loans and extensions of credit to the extent
secured by a pledge or security interest in a deposit account in the lending
depository financial services loan company; and



(2)  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 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. [L 1993, c 350, pt of §1]