Montana Code 32-2-925. Limitations on loans — rulemaking
32-2-925. Limitations on loans — rulemaking. (1) The total loans or extensions of credit to a person, partnership, or corporation by a mutual association, including loans to a partnership and to the members of the partnership, may not exceed 15% of the mutual association’s capital, plus an additional 10% of the mutual association’s capital, if the amount that exceeds the mutual association’s 15% general limit is fully secured by readily marketable collateral, as defined in 12 C.F.R. § 32.2(v). To qualify for the additional 10% limit, the mutual association must perfect a security interest in the collateral under applicable law and the collateral must have a current market value at all times of at least 100% of the amount of the loan or extension of credit that exceeds the mutual association’s 15% general limit.
Terms Used In Montana Code 32-2-925
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Capital: means , with respect to a mutual association:
(a)retained earnings; or
(b)at the discretion of the commissioner, any other form of capital, subject to any applicable federal and state laws. See Montana Code 32-2-603
- Commissioner: means the commissioner of banking and financial institutions as provided in 32-1-211. See Montana Code 32-2-603
- 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.
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Mutual association: means any corporation that has been incorporated to conduct the business of receiving money on deposit from its members and making substantially all of its loans on one-to-four family real estate mortgage security. See Montana Code 32-2-603
- 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: includes a corporation or other entity as well as a natural person. See Montana Code 1-1-201
- Property: means real and personal property. See Montana Code 1-1-205
- United States: includes the District of Columbia and the territories. See Montana Code 1-1-201
(2)To the extent specified in regulations of the office of the comptroller of the currency, a mutual association may invest in, sell, or otherwise deal in the following loans and other investments without percentage of assets limitation:
(a)account loans — loans on the security of its savings accounts and loans specifically related to transaction accounts;
(b)residential real property loans — loans on the security of liens on residential real property;
(c)United States government securities — investments in obligations of, or fully guaranteed as to principal interest by, the United States;
(d)federal home loan bank and federal national mortgage — investments in the stock or bonds of a federal home loan bank or in the stock of the federal national mortgage association;
(e)federal home loan mortgage corporation instruments — investments in mortgages, obligations, or other securities that are or have been sold by the federal home loan mortgage corporation pursuant to section 305 or 306 of the federal home loan mortgage corporation act; and
(f)other government securities — investments in obligations, participations, securities, or other instruments issued by or fully guaranteed as to principal and interest by the federal national mortgage association, the student loan marketing association, the government national mortgage association, or any agency of the United States. A savings association may issue and sell securities that are guaranteed pursuant to section 306(g) of the National Housing Act.
(3)The commissioner may adopt rules to implement this section.