32-1-465. Limit on loans to officer, director, or principal shareholder. (1) Except as provided in subsection (2), a bank may not extend credit to an officer, director, or principal shareholder unless the extension of credit is in an amount that, when aggregated with the amount of all outstanding extensions of credit by that bank to all officers, directors, or principal shareholders, does not exceed the bank's unimpaired capital and unimpaired surplus.
(2) A bank with deposits of less than $100 million may by resolution of its board of directors increase the general limit in subsection (1) to a limit that does not exceed two times the bank's unimpaired capital and unimpaired surplus if:
(a) the board of directors determines that a higher limit is consistent with prudent, safe, and sound banking practices in light of the bank's experience in lending to officers, directors, and principal shareholders and is necessary to attract or retain directors or to prevent restricting the availability of credit in small communities;
(b) the resolution sets forth the facts and reasoning on which the board of directors bases the finding, including the amount of the bank's lending to officers, directors, and principal shareholders as a percentage of the bank's unimpaired capital and unimpaired surplus as of the date of the resolution;
(c) the bank has submitted the resolution to the department; and
(d) the bank meets or exceeds, on a fully phased-in basis, all applicable capital requirements established by the department.
History: En. Sec. 41, Ch. 89, L. 1927; re-en. Sec. 6014.45, R.C.M. 1935; R.C.M. 1947, 5-520; amd. Sec. 3, Ch. 36, L. 1979; amd. Sec. 33, Ch. 395, L. 1993; amd. Sec. 11, Ch. 265, L. 1995.
Structure Montana Code Annotated
Title 32. Financial Institutions
Chapter 1. Banks and Trust Companies
Part 4. Operation and Regulation
32-1-401. Bank advertising before issuance of charter
32-1-402. When advertising as bank prohibited -- trade names restricted
32-1-403. Penalty for transacting business without certificate
32-1-404. through 32-1-410 reserved
32-1-411. Extent assets may be pledged
32-1-412. Limits on excessive borrowing
32-1-413. Borrowing money for capital purposes -- status of capital
32-1-414. No certificate of deposit to issue for borrowed money
32-1-415. through 32-1-419 reserved
32-1-420. Investment by trust fiduciary in management investment company or investment trust
32-1-421. Investment of capital of savings banks
32-1-422. Restriction on investment in corporate stock -- rulemaking authority
32-1-423. Real estate that banks may purchase, hold, or convey
32-1-424. Investments of financial institutions
32-1-426. Deposit of securities in central depository
32-1-427. Fiduciaries -- deposit of securities with a federal reserve bank
32-1-429. Insurance activities -- exemption -- rulemaking
32-1-430. Authority of state banks to make real estate loans -- borrower insurance requirements
32-1-432. Limitations on loans -- rulemaking
32-1-433. Investment in certain securities -- rulemaking authority
32-1-435. Federal housing securities eligible collateral
32-1-437. Acceptance and issuance of drafts -- rulemaking authority
32-1-438. and 32-1-439 reserved
32-1-444. Deposit in name of minor
32-1-445. Demand or time deposits
32-1-446. Safe deposit department
32-1-447. Giving security for deposit prohibited -- exceptions
32-1-448. Payments to foreign administrator
32-1-449. and 32-1-450 reserved
32-1-451. Statement of capital, resources, and liabilities
32-1-452. Dividends, surplus, losses, and bad debts
32-1-453. Calculation of profits
32-1-454. Past-due and doubtful paper
32-1-455. Reserve requirements
32-1-456. through 32-1-460 reserved
32-1-461. Bonding of employees
32-1-462. Persons previously convicted under banking laws -- bank employment
32-1-463. Sale of securities by officer to bank
32-1-464. Fraud by director, officer, agent, or employee
32-1-465. Limit on loans to officer, director, or principal shareholder
32-1-466. Purchase of obligation of bank by officer
32-1-467. Loans to managing officer
32-1-468. Removal of directors, officers, or employees -- hearing
32-1-469. and 32-1-470 reserved
32-1-471. Penalty for unlawful hypothecation of property received
32-1-472. Concealing actions from directors
32-1-473. Theft of funds by directors, officers, or employees
32-1-474. False statement to obtain loan
32-1-475. through 32-1-480 reserved
32-1-482. Transaction on holidays
32-1-483. Closing on Saturdays authorized -- Saturday treated as holiday
32-1-484. Banking hours and business days
32-1-485. Interest payable at bank on Saturday -- how paid
32-1-486. through 32-1-490 reserved
32-1-491. Destruction of records
32-1-492. Definitions -- reproduction of bank records -- admissibility in evidence -- cost recovery
32-1-493. Admissibility of copies in evidence -- exception when original available
32-1-494. Destruction or reproduction "in regular course of business" defined