Arkansas Code
Subchapter 5 - Loans
§ 23-47-501. Loan limits — Maximum generally

(a) The total indebtedness to any state bank of any person shall at no time exceed twenty percent (20%) of the capital base of the bank.
(b)
(1) Obligations of a person as endorser or guarantor, accommodation or otherwise, of notes or other obligations shall be included in that person's loan limit.
(2) However, in the case of obligations that are endorsed without recourse, the limitation of twenty percent (20%) shall be applied to each primary debtor, but not to the liability, in such capacity, of the endorser.

(c)
(1) A loan or group of loans that are within the legal loan limit of a state bank at the time the loan or loans are made shall be valid for legal loan limit purposes until maturity, as stated in the original contract, regardless of fluctuations in the bank's legal loan limit. However, if a bank's legal loan limit is reduced due to fluctuations in its capital base, a loan or group of loans to a borrower or borrowers that were within the legal loan limit prior to the reduction may become in violation of the bank's reduced legal loan limit upon the extension, renewal, or advancement of additional funds on the loan or group of loans occurring after the reduction in the bank's legal loan limits.
(2) State banks are required to calculate their legal loan limits on a quarterly basis to coincide with the requirement to calculate their capital base.

(d)
(1) If in any instance it shall appear, as determined by the Bank Commissioner, that the interests of a group composed of individuals, partnerships, unincorporated associations, or corporations are so interrelated that, from a credit standpoint, applying standard and customary banking practice, they should be considered as a single unit for the purposes of extensions of credit, the total indebtedness of these interrelated customers shall be combined and treated as the indebtedness of a single customer in applying the loan limit.
(2) A state bank shall not be deemed to have violated this section solely by reason of the fact that the indebtedness of a group held by the bank exceeds the limitation of this section at the time the commissioner determines that the indebtedness of the group must be combined. However, if required by the commissioner, the state bank shall dispose of indebtedness of the group in the amount of excess of the limitation of this section within such reasonable time as shall be fixed by the commissioner.

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