2023 Florida Statutes › Title XXXVIII - Banks and Banking › Chapter 658 - Banks and Trust Companies › 658.48 - Loans.

658.48 Loans.—A state bank may make loans and extensions of credit, with or without security, subject to the following limitations and provisions:
(1) LOANS; GENERAL LIMITATIONS.—
(a) A bank may extend credit to any person, including any related interest of that person, up to an amount of 15 percent of its capital accounts for loans and lines of credit which are unsecured. A bank may extend credit to any person, including any related interest of that person, in any amount up to 25 percent of its capital accounts for loans and lines of credit, all components of which are amply and entirely secured. However, when outstanding loans consist of both secured and unsecured portions, the secured and unsecured portions together may not exceed 25 percent of the capital accounts of the lending bank, and the unsecured portion may not exceed 15 percent of the capital accounts of the lending bank.
(b) The commission may provide by rule for securities margin requirements.
(c) The loan limitations stated in this section shall not be enlarged by the provisions of any other section of this chapter, except as provided in subsection (5).
(2) LOANS TO EXECUTIVE OFFICERS, DIRECTORS, AND THEIR RELATED INTERESTS.—No bank shall extend credit, including the granting of a line of credit, to any of its executive officers or directors, or any related interest of that person, that, when aggregated with the amount of all other extensions of credit to that person and any related interest of that person, exceeds $25,000, unless the extension of credit has been approved in advance by a majority of the entire board of directors, with the interested party abstaining from participating, directly or indirectly, in the deliberations or voting. Such approval must be granted not more than 1 year prior to the time when such credit is extended.
(3) LOANS TO OTHER PERSONS.—A bank may not extend credit, including the granting of a line of credit, to any person, including a related interest of that person, which, if aggregated with the amount of all other extensions of credit to that person and any related interest of that person, exceeds 15 percent of the capital accounts of the lending bank, unless the extension of credit has been approved in advance by a majority of the entire board of directors or by all members of an authorized committee thereof within 1 year before the time such credit is extended.
(4) SPECIAL PROVISIONS.—
(a) A limitation of 25 percent of the capital accounts of the lending bank applies to the aggregate of all loans made to a corporation, together with all loans secured by shares of stock, bonds, or other obligations of the same corporation, unless the stocks or bonds are listed and traded on a recognized stock exchange, registered under the Securities Exchange Act of 1934, or registered with the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, or the Comptroller of the Currency, in which case no aggregate loan limit applies.
(b) A limitation of 15 percent of the capital accounts of the lending bank applies to loans made to any one borrower on the security of shares of capital stock listed and traded on a recognized exchange. A limitation of 10 percent of the capital accounts of the lending bank applies to loans made to any one borrower on the security of shares of capital stock not listed on a recognized exchange or the obligations subordinate to deposits of another bank. A limitation of 25 percent of the capital accounts of the lending state bank applies to the aggregate of all loans secured by the shares of capital stock or the obligations subordinate to deposits of any one bank.
(c) A loan may not be made by a bank:
1. On the security of the shares of its own capital stock or of its obligations subordinate to deposits.
2. On an unsecured basis for the purpose of purchasing shares of its own capital stock or its obligations subordinate to deposits.
3. On a secured or unsecured basis for the purpose of purchasing shares of the stock of its one-bank holding company.
(d) A one-bank holding company bank may make loans on its own one-bank holding company stock. For capital stock that is listed and traded on a recognized exchange, the stock may not be valued at more than 70 percent of its current market value, and for capital stock that is not listed and traded on a recognized exchange, the stock may not be valued at more than 70 percent of its current book value.
(e) In computing the total liabilities of any person, all loans or lines of credit endorsed or guaranteed as to repayment by such person and any related interest of such person must be included. Purchased participations in pools of loans which are carried as loans subject to the limits of this section must be aggregated when computing the total liabilities of a person who is a borrower, originator, seller, broker, or guarantor, or has a repurchase agreement obligation for the individual and pooled loans. The computation of total liabilities must also include all potential liabilities and obligations of the person, and any related interest, resulting from the person’s derivatives transactions, repurchase agreements, securities lending and borrowing transactions, credit default swaps, and similar contracts.
(f) All loan documentation must be written in English or contain an English translation of foreign language provisions.
(5) APPLICABILITY OF LOAN LIMITATIONS.—The loan limitations provided in this section do not apply to:
(a) Loans that are fully secured by assignment of a savings account or certificate of deposit of the lending bank;
(b) Loans that are fully secured by notes, bonds, or other evidences of indebtedness issued by the United States Government or fully guaranteed as to repayment by the United States Government or its agencies, bureaus, boards, or commissions;
(c) Loans made to district school boards if such loans are secured by the assignment of revenues reasonably expected to be received from the state and are otherwise made in compliance with statutes governing borrowings by such boards; or
(d) Purchased participations in pools of loans which are carried as investments subject to the limitations of s. 658.67.
(6) APPROVAL BY BOARD.—The requirements of this section concerning approval of lending activities by the board of directors or an authorized committee therefrom are met only if such approvals are recorded in the formal minutes of the actions of the board and its committees by name of borrower, amount of loan, maturity of loan, and general type of collateral. If, at the time of approval of a line of credit, such information is not available, the name of the borrower and the amount of the approved line of credit must be recorded in the minutes. Any action required by this section may be taken pursuant to s. 607.0820(4) if the minutes of the proceedings of the board or of the committee reflect such action and each director taking such action signs the minutes reflecting such action at the next regular meeting of the board or committee attended by such director.
(7) LIABILITY OF OFFICERS AND DIRECTORS.—Officers and directors are personally liable, jointly and severally, for any loss that may be occasioned by a willful violation of this section.
(8) If a bank’s capital has been diminished by losses so that its ability to honor legally binding written loan commitments is impaired, the office may approve limited expansion of the lending limitations set forth in this section.
(9) FEDERAL RESTRICTIONS AND LIMITATIONS.—This section does not expand, enlarge or otherwise affect lending limits, restrictions, or procedures now provided by federal law applicable to state banks in conjunction with any loan or loans to any borrower or class of borrowers.
History.—s. 2, ch. 28016, 1953; s. 1, ch. 57-42; s. 1, ch. 63-322; ss. 12, 35, ch. 69-106; s. 1, ch. 69-297; s. 1, ch. 69-300; s. 164, ch. 71-355; s. 1, ch. 74-164; s. 3, ch. 76-168; s. 4, ch. 76-177; s. 1, ch. 77-457; ss. 38, 151, 152, ch. 80-260; ss. 2, 3, ch. 81-318; ss. 30, 51, ch. 84-216; ss. 36, 58, ch. 85-82; s. 20, ch. 89-229; s. 183, ch. 90-179; s. 1, ch. 91-307; ss. 1, 129, ch. 92-303; s. 19, ch. 2001-243; s. 1791, ch. 2003-261; s. 18, ch. 2004-340; s. 101, ch. 2004-390; s. 28, ch. 2011-194; s. 79, ch. 2012-5.
Note.—Former s. 659.17.