Texas Administrative Code › Title 7 - BANKING AND SECURITIES › Part 2 - TEXAS DEPARTMENT OF BANKING › Chapter 12 - LOANS AND INVESTMENTS › Subchapter A - LENDING LIMITS › Section 12.3 - Loans and Extensions of Credit

Current through Reg. 49, No. 28; July 12, 2024
(a) Loans or
				  extensions of credit for purposes of the Finance Code, §
										RSA 34.201, and
				  this subchapter include:
(1) an overdraft,
				  regardless of whether such overdraft was pre-arranged, other than an intra-day
				  overdraft for which payment or deposit is received by the bank before the time
				  at which the bank closes its accounting records for the business day on which
				  the funds were advanced;
(2) a
				  contractual obligation to advance funds to or on behalf of a person, including
				  a bank's obligation to:
(A) make payment,
				  directly or indirectly, to a third party contingent upon default by a customer
				  of the bank in performing an obligation owed to the third party or upon another
				  stated condition;
(B) guarantee or
				  act as surety for the benefit of a person;
(C) advance funds under a legally binding
				  commitment to lend; or
(D) advance
				  funds under a standby letter of credit, a put, or other similar arrangement,
				  however named or described, that represents an obligation to the beneficiary on
				  the part of the issuing bank to repay money borrowed by or advanced to or for
				  the account of the account party (the customer or applicant in a letter of
				  credit transaction), make payment on account of any indebtedness undertaken by
				  the account party, or make payment on account of a default by the account party
				  in the performance of an obligation, but not including a bank's obligation
				  under a commercial letter of credit or similar instrument if the issuing bank
				  reasonably expects the beneficiary to draw on the issuer and the instrument
				  neither guarantees payment nor provides for payment in the event of a default
				  by a third party;
(3) a
				  maker or endorser's obligation arising from the discount of commercial
				  paper;
(4) third-party paper
				  purchased to the extent it is subject to an agreement that the seller will
				  repurchase the paper, including an obligation to repurchase the paper upon
				  default or at the end of a stated period, less any applicable dealer reserves
				  held by the bank as collateral security, unless such transaction is exempt
				  under other provisions of the Finance Code or this subchapter;
(5) the sale of Federal funds with a maturity
				  of more than one business day, but not Federal funds sold with a maturity of
				  one day or less or Federal funds sold under a continuing contract, including
				  contracts that provide for weekly settlement if the parties have the
				  contractual right to obtain their funds at maturity of each
				  transaction;
(6) loans or
				  extensions of credit that have been charged off on the books of the bank, in
				  whole or part, unless the loan or extension of credit is no longer legally
				  enforceable by reason of:
(A) discharge in
				  bankruptcy;
(B) expiration of the
				  statute of limitations or judicial decision; or
(C) another reason, provided the bank
				  maintains sufficient records to demonstrate that the loan is
				  unenforceable;
(7) lease
				  financing transactions made pursuant to the Finance Code, §
											RSA
				  34.204, unless otherwise exempt under §
											RSA 12.7 of this
				  title (relating to Lease Financing);
(8) nonrecourse or limited recourse loans or
				  extensions of credit;
(9) aggregate
				  cash surrender value of life insurance policies from any one insurance
				  company;
(10) any credit exposure
				  to a person arising from a derivative transaction or a securities financing
				  transaction between a state bank and the person, as determined pursuant to
				  §
											RSA
				  12.12 of this title (relating to Credit
				  Exposure Arising from Derivative and Securities Financing Transactions);
				  and
(11) another category of
				  transactions that is the equivalent of a loan or extension of credit as
				  determined by the banking commissioner in the exercise of discretion.