There is a newer version of the Kentucky Revised Statutes
2009 Kentucky Revised Statutes
Subtitle 3. Banks and Trust Companies
286.3.280 Maximum debt of persons to bank or trust company.
Download pdfsurety to it in an amount exceeding twenty per cent (20%) of its capital stock
actually paid in and its actual amount of surplus, unless the person pledges with it
good collateral security or executes to it a mortgage upon real or personal property
which at the time is of more than the cash value of the indebtedness or obligation
above all other encumbrances; but the indebtedness or obligation of any person
shall not exceed thirty percent (30%) of the paid-in capital and actual surplus of the
bank or trust company. When computing the total capital stock and surplus, the
negative balance of a bank's undivided profits account shall be deducted. (2) A bank organized as a limited liability company shall not be covered by subsection (1) of this section, but shall comply with the legal lending limits applicable to
national banks set forth in 12 U.S.C. sec. 84 and 12 C.F.R. sec. 32.4, as may be
amended. (3) No bank or trust company shall permit any of its directors or executive officers to become indebted to it or become obligated as guarantor or surety to it in an amount
which exceeds that which any other person is authorized by this section to become
indebted or obligated. (4) In computing the indebtedness of any person, the liability of any partnership in which the person acts as a general partner shall be included, and any obligation
entered into for the benefit of a person, partnership or association shall be included
in the total liabilities of the person, partnership or association. (5) Except as otherwise provided in this section, the same security, both in kind and amount, shall be required from stockholders as from nonstockholders. (6) The discount of bills of exchange drawn against actually existing value, and the purchase or discounting of commercial or business paper actually owned by the
person negotiating the paper shall not be considered as borrowed money within the
meaning of this section in fixing the limit of indebtedness or obligation of any
person selling or negotiating the paper to a bank. Effective: July 15, 2010
History: Amended 2010 Ky. Acts ch 28, sec. 15, effective July 15, 2010. -- Amended 2006 Ky. Acts ch. 183, sec. 9, effective July 12, 2006. -- Amended 1992 Ky. Acts
ch. 77, sec. 3, effective July 14, 1992. -- Amended 1986 Ky. Acts ch. 444, sec. 9,
effective July 15, 1986; and ch. 472, sec. 1, effective July 15, 1986. -- Recodified
1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat.
secs. 581, 583, 609, 610. Formerly codified as KRS 287.280.
Legislative Research Commission Note (7/12/2006). This section was amended in 2006 Ky. Acts ch. 183. In that same session, 2006 Ky. Acts ch. 247, sec. 38 required
that all sections of KRS Chapters 287, 288, 290, 291, 294, 366, 366A, and 368 be
renumbered as sections of a single KRS chapter entitled the "Kentucky Financial
Services Code." Therefore, the Statute Reviser, acting under KRS 7.136(1), has
changed the number of this section and codified it as a section of KRS Chapter 286. Legislative Research Commission Note. This section was amended by two 1986 Acts which do not appear to be in conflict and have been compiled together. However, in
combining the amendments it was necessary to retain the words "in an amount" in
subsection (2) of this section which had been deleted by Acts 1986, ch. 472, § 1.
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