Oklahoma Administrative Code › Title 85 - State Banking Department › Chapter 10 - Supervision, Regulation, and Administration of Banks, Trust Companies, and the Oklahoma Banking Code › Subchapter 11 - Substantive Guidelines and Restrictions › Section 85:10-11-10 - Lending limits

Current through Vol. 41, No. 20, July 1, 2024
(a)
Definitions.
The following words and terms, when used in this
				Section shall have the following meaning, unless the text clearly indicates
				otherwise:
(1)
"Commercial or business
				paper"
means negotiable paper given in payment of the purchase price of
				commodities in domestic or export transactions purchased for resale or to be
				used in connection with the fabrication of a product, or to be used for any
				other business purpose which may reasonably be expected to provide funds for
				payment of the paper. Loans or extensions of credit arising from the discount
				of paper of the kind described in this paragraph must bear full recourse
				endorsement of the owner. However, loans or extensions of credit arising from
				the discount of such paper in export transactions may be endorsed by such owner
				without recourse or with limited recourse, or may be accompanied by a separate
				agreement for limited recourse; provided, that if transferred without full
				recourse, the paper must be supported by an assignment of appropriate insurance
				covering the political, credit, and transfer risks applicable to the
				paper.
(2)
"Contractual
				commitment to advance funds"
means:
(A)
				an obligation on the part of the bank or trust company to make payments
				(directly or indirectly) to a designated third party contingent upon a default
				by the customer of the bank or trust company in the performance of an
				obligation under the terms of the customer's contract with the third
				party;
(B) an obligation to
				guarantee or stand as surety for the benefit of a third party. The term
				includes, but is not limited to, standby letters of credit (as defined in this
				Section), guarantees, puts, and other similar arrangements;
(C) undisbursed loan funds and lines of
				credit and loan commitments not yet drawn upon; and
(D) commercial letters of credit and similar
				instruments where the issuing bank expects the beneficiary to draw upon the
				issuer.
(E) However, not within the
				meaning of "contractual commitment to advance funds" is the guaranteeing or
				insuring by trust companies of title to real and personal property to persons
				interested in such property or in mortgages thereon, against loss, by reason of
				defective title or other encumbrances of or upon such property and bonds
				authorized to be issued by banks or trust companies under Sections 1001 and
				1015 of the Banking Code.
(3)
"Loans and extensions of
				credit"
means
(A) any direct or
				indirect advance of funds (including obligations of makers and endorsers
				arising from the discounting of commercial paper) to a person or for the direct
				benefit of a person made on the basis of any obligation of that person to repay
				the funds, or repayable from specific property pledged by or on behalf of a
				person;
(B) any contractual
				commitment to advance funds; and
(C) overdrafts, whether or not prearranged,
				except for "intra-day" or "daylight" overdrafts.
(4)
"Person"
shall have the same
				meaning as defined in Section 102 of the Code.
(5)
"Standby letter of credit"
is any letter of credit, or similar arrangement, however named or described,
				which represents an obligation to the beneficiary on the part of the issuer:
(A) to repay money borrowed by or advanced to
				or for the account of the account party; or
(B) to make payment on account of any
				indebtedness undertaken by the account party; or to make payment on account of
				any default by the account party in the performance of an obligation.