2011 California Code
Financial Code
DIVISION 1.1. BANKING [1000 - 1910]
ARTICLE 3. Loan Limits
Section 1481
The obligations, as defined in Section 1480, excepting the obligations described in Section 1485 and the obligations described in Section 1483, of any one person owing to a commercial bank at any one time shall not exceed the following limitations:
(a) Obligations which are unsecured shall not exceed 15 percent of the sum of the shareholders equity, allowance for loan losses, capital notes, and debentures of the bank.
(b) Obligations, secured and unsecured, in all shall not exceed 25 percent of the sum of the shareholders equity, allowance for loan losses, capital notes, and debentures of the bank.
Obligations arising out of the discount of commercial or business paper actually owned by the person negotiating the same and endorsed by such person without limitation, together with the secured and unsecured obligations, if any, of such person, shall not exceed 40 percent of the sum of the shareholders equity, allowance for loan losses, capital notes, and debentures of the bank.
No commercial bank shall be required, solely by reason of the amendments of this article, to dispose of or reduce any loan which complied with the applicable limitations of this division at the time such loan was made, nor shall any such bank be prevented solely by reason of the provisions of this article from renewing any such loan from time to time.
(Added by Stats. 2011, Ch. 243, Sec. 3. Effective January 1, 2012.)
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