(1) Except as otherwise provided in this section or by order or declaratory ruling of the commissioner, the total loans and extensions of credit and leases by a stock savings bank to a person at no time shall exceed 15% of the capital and surplus of the stock savings bank, except that upon approval by 2/3 vote of its board of directors the limit may be increased not to exceed 25% of the capital and surplus of the stock savings bank.
  (2) Except as otherwise provided in this section or by order or declaratory ruling of the commissioner, the total loans and extensions of credit and leases by a mutual savings bank to a person at no time shall exceed 15% of the total capital of the mutual savings bank, except that upon approval by 2/3 vote of its board of directors the limit may be increased not to exceed 25% of the total capital of the mutual savings bank.

Terms Used In Michigan Laws 487.3432

  • Association: means a federal savings association organized under section 5 of the home owners' loan act, chapter 64, 48 Stat. See Michigan Laws 487.3102
  • Bank: means a state banking corporation organized or reorganized under the provisions of the banking code of 1999, 1999 PA 276, MCL 487. See Michigan Laws 487.3102
  • Capital: means the stated par value of issued and outstanding unimpaired common stock and the stated par value of issued and outstanding unimpaired preferred stock. See Michigan Laws 487.3102
  • Commissioner: means the commissioner of the office of financial and insurance services. See Michigan Laws 487.3102
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Mutual savings bank: means a savings bank for which the articles of incorporation do not authorize the issuance of common or preferred stock. See Michigan Laws 487.3103
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
  • Person: means an individual, corporation, limited liability company, governmental entity, partnership, limited liability partnership, or other legal entity. See Michigan Laws 487.3103
  • Personal property: All property that is not real property.
  • Savings bank: means a state banking corporation organized or reorganized under this act. See Michigan Laws 487.3103
  • shall not apply: means that the pertinent provision is not operative as to certain persons or things or in conjunction with a particular date or dates. See Michigan Laws 8.4c
  • Stock savings bank: means a savings bank for which the articles of incorporation authorize the issuance of capital stock. See Michigan Laws 487.3103
  • Surplus: means the amount paid for issued and outstanding common and preferred stock in excess of the stated par value, plus any amount of transferred undivided profits, and any additional amounts paid in or contributed to increase total capital. See Michigan Laws 487.3103
  • Total capital: means an amount equal to any capital, plus any surplus, undivided profits, and instruments of indebtedness authorized under section 310. See Michigan Laws 487.3103
  (3) If the commissioner determines that the interests of a group of more than 1 person are so interrelated that they should be considered as a unit for the purpose for which credit was extended, the total loans and extensions of credit and leases of persons of that group shall be combined and considered loans and extensions of credit and leases of 1 person under this section.
  (4) A savings bank is not considered to have violated this section through section 434 solely by reason of the fact that the indebtedness of a group then held exceeds the limitations of this section through section 434 at the time of a determination by the commissioner that the indebtedness of that group shall be combined, but if required by the commissioner the savings bank shall make a reasonable attempt to dispose of indebtedness of the group in the amount in excess of that permitted by this section within a reasonable time determined by the commissioner.
  (5) The limitations under subsections (1) and (2) shall not apply to loans and extensions of credit described in section 433 and 434.
  (6) As used in this section and section 433 and 434:
  (a) “Loan and extension of credit” or “loan or extension of credit” includes all direct or indirect advances of funds to a person made on the basis of an obligation of that person to repay the funds or repayable from specific property pledged by or on behalf of the person. To the extent specified by the commissioner, loan and extension of credit or loan or extension of credit includes any liability of a savings bank to advance funds to or on behalf of a person under a contractual commitment. Such term also includes the cost of purchase of personal property for the purpose of leasing the property to a person. Loan and extension of credit or loan or extension of credit does not include investment securities held by a savings bank under section 411.
  (b) “Person” means an individual, partnership, association, corporation, governmental entity, or any other legal entity.
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