State Codes and Statutes

State Codes and Statutes

Statutes > North-carolina > Chapter_53 > GS_53-48

§ 53‑48.  Limitation ofloans.

(a)        The total loans andextensions of credit, both direct and indirect, by a bank to a person, otherthan a municipal corporation for money borrowed, including in the liabilitiesof a firm the liabilities of the several members thereof, outstanding at onetime and not fully secured, as determined in a manner consistent withsubsection (b) of this section, by collateral having a market value at leastequal to the amount of the loan or extension of credit shall not exceed the greaterof fifteen percent (15%) of the unimpaired capital fund of the bank or thepercentage permitted for national banks in this State by statute or regulationof the Comptroller of the Currency.

(b)        The total loans andextensions of credit, both direct and indirect, by a bank to a personoutstanding at one time and fully secured by readily marketable collateralhaving a market value, as determined by reliable and continuously availableprice quotations, at least equal to the amount of the loan or extension ofcredit outstanding shall not exceed the greater of ten percent (10%) of theunimpaired capital fund of the bank or the percentage permitted for nationalbanks by statute or regulation of the Comptroller of the Currency. Thislimitation shall be separate from and in addition to the limitation containedin subsection (a) of this section.

(c)        The discount ofbills of exchange drawn in good faith against actual existing values, thediscount of solvent trade acceptances or other solvent commercial or businesspaper actually owned by the person negotiating the same, loans or extensions ofcredit secured by a segregated deposit account in the lending bank, thepurchase of bankers acceptances of the kind described in section 13 of theFederal Reserve Act and issued by other banks, and the purchase of any notesand the making of any loans, secured by not less than a like face amount ofbonds of the United States, or an agency of the United States, or otherobligations guaranteed by the United States Government, or State of NorthCarolina or certificates of indebtedness of the United States, or agencythereof, or other obligations guaranteed by the United States Government, shallnot be considered as money borrowed within the meaning of this section:Provided, however, that the limitations of this section shall not apply toloans or obligations to the extent that they are secured or covered byguarantees or by commitments or agreements to take over or purchase the same,made by any federal reserve bank or by the United States or any department,board, bureau, commission or establishment of the United States, including anycorporation wholly owned directly or indirectly by the United States.

(d)        For purposes ofthis section, the term "person" shall be deemed to include anindividual, or a corporation, partnership, trust, association, joint venture,pool, syndicate, sole proprietorship, unincorporated organization or any otherform of entity not specifically listed herein. Loans or extensions of credit toone person include loans made to other persons when the proceeds of the loansor extensions of credit are to be used for the direct benefit of the firstperson or the persons are engaged in a common enterprise. The Commissioner ofBanks shall monitor the lending activities of banks under this section forundue credit concentrations and inadequate risk diversification which couldadversely affect the safety and soundness of such banks. (1921, c. 4, s. 29; 1923, c.148, s. 6; C.S., s. 220(d); 1925, c. 119, s. 1; 1927, c. 47, s. 7; 1937, c.419; 1943, c. 204; 1945, c. 127, s. 1; 1967, c. 789, s. 9; 1979, c. 483, s. 6;1983, c. 214, s. 4; 2004‑171, s. 1.)