Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
Bank: means any person, as hereinafter defined, doing a banking business subject to the laws of this or any other jurisdiction and, for the purposes of supervision, examination and liquidation, includes industrial investment companies and industrial banks authorized by chapter 5 of this title. See Tennessee Code 45-1-103
Contract: A legal written agreement that becomes binding when signed.
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.
Deposit: means a deposit of money, bonds or other things of value, creating a debtor-creditor relationship. See Tennessee Code 45-1-103
Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
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.
Person: means an individual, corporation, firm, trust, estate, partnership, joint venture, or association. See Tennessee Code 45-1-103
Record: means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in a perceivable form. See Tennessee Code 1-3-105
Savings and loan association: includes a building and loan association, a federal or state savings and loan association, a federal savings bank, and any other financial institution, the accounts of which are insured by the [former] federal savings and loan insurance corporation (FSLIC) or any successor [repealed] of such corporation. See Tennessee Code 1-3-105
State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
(1) Except as provided in this section, no statebank shall be allowed to lend to any one (1) person, firm or corporation (including loans to a firm or loans to the several members thereof) more than fifteen percent (15%) of its capital, surplus and undivided profits. However, the loans may be in excess of that percent, but not above twenty-five percent (25%) except as provided in subsection (b), if each specific loan in excess of fifteen percent (15%) is first submitted to and approved in advance in writing by the board of directors or by the finance committee of the bank and a record is kept of the written approval.(2) No loan limit shall be applicable to any state bank in any situation or circumstance in which no loan limit is applicable to national banks.(3) No loan limit shall be applicable to the extent that the loan or extension of credit is secured by a segregated deposit account in the lending bank.(b)(1) Obligations of any person in the form of notes or drafts secured by shipping documents, warehouse receipts or other documents transferring or securing title covering readily marketable nonperishable staples shall be subject to a limitation equal to the percent of the sum of the lending bank’s capital, surplus, and undivided profits shown in column A below, when the market value of the staples securing the obligations is not at any time less than the percent of the face amount of the obligation shown in column B below:
Column A
Column B
25%
115%
30%
120%
35%
125%
40%
130%
45%
135%
50%
140%
(2) The exceptions listed in subdivision (b)(1) do not apply to obligations of any one (1) person, copartnership, association or corporation arising from the same staples, for more than ten (10) months.(c)(1) Notwithstanding any other provision of law, a state bank or bank holding company may not sell a classified loan or participation in a classified loan to, or purchase the loan or participation from, another financial institution without obtaining the prior approval of the commissioner.(2) For purposes of subdivision (c)(1):
(A) “Classified loan” means a loan that is designated “substandard,” “doubtful,” or “loss” in the most recent state or federal report of examination; and(B) “Financial institution” means a bank, savings bank, savings and loan association or any subsidiary of those entities, industrial loan and thrift company, credit union, mortgage broker, mortgage banker, or leasing company accepting deposits, making or arranging loans and making or arranging leases.(d)(1) The loan limit applicable to any one (1) person under this section shall take into consideration credit exposure arising from derivative transactions between the state bank and the person.(2) For purposes of subdivision (d)(1), “derivative transaction” includes any transaction that is a contract, agreement, swap, warrant, note, or option that is based, in whole or in part, on the value of, any interest in, or any quantitative measure or the occurrence of any event relating to, one (1) or more commodities, securities, currencies, interest or other rates, indices, or other assets.
