Bill Text: MS SB2194 | 2013 | Regular Session | Introduced
Bill Title: Loans; limit to single borrower shall allow for credit exposure from derivative transactions.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2013-02-19 - Approved by Governor [SB2194 Detail]
Download: Mississippi-2013-SB2194-Introduced.html
MISSISSIPPI LEGISLATURE
2013 Regular Session
To: Business and Financial Institutions
By: Senator(s) Jackson (15th)
Senate Bill 2194
AN ACT TO AMEND SECTION 81-5-77, MISSISSIPPI CODE OF 1972, TO REQUIRE THE LIMIT ON LOANS TO A SINGLE BORROWER TO TAKE INTO CONSIDERATION THE CREDIT EXPOSURE FROM DERIVATIVE TRANSACTIONS; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 81-5-77, Mississippi Code of 1972, is amended as follows:
81-5-77. (a) The
liability to a bank by a person, company, corporation or firm for * * * all loans and extensions of
credit, including in the liability of such person, company or firm, where a
partnership, the liabilities of the several members thereof, shall not exceed
twenty percent (20%) of the aggregate unimpaired capital and unimpaired surplus
of said bank.
(b) The following shall not be restricted to or considered as coming within the limitations of twenty percent (20%) herein prescribed:
( * * *i) Loans and discounts secured by
warehouse receipts or shippers' order bills of lading representing actually
existing values, provided the amount of such loans and discounts shall not
exceed eighty-five percent (85%) of the market value of the commodities
representing the actually existing values.
( * * *ii) Loans and discounts secured by
bonds, certificates or notes constituting direct obligations of the United
States Government, or bonds fully guaranteed by the United States Government,
or by full faith and credit obligations of the State of Mississippi; provided,
however, the state comptroller shall from time to time determine and fix the
maximum percentage of the par value of all such securities that may be loaned.
( * * *iii) Loans and discounts to the extent
that they are secured or covered by guaranties, or by commitments, or
agreements to take over or purchase the same, made by any federal reserve bank,
or by the United States, or any department, bureau, board, commission or
establishment of the United States, including any corporation wholly owned
directly or indirectly by the United States; provided that such guaranties, agreements
or commitments are unconditional and are to be performed by payment within
sixty (60) days after demand; provided, further, that the state comptroller is
hereby authorized to define the terms herein used and may by regulation control
the making of loans under this paragraph (iii).
( * * *iv) Loans and discounts secured in
full by funds on deposit in time or savings accounts with the lending bank to
the credit of the borrower.
(c) The limit on loans and extensions of credit applicable to any one person, company, corporation, or firm under this section shall take into consideration credit exposure arising from derivative transactions between the bank and such party. For purposes of this section, the term "derivative transaction" includes any transaction that is a contract, agreement, swap, warrant, note, or option that is based, in whole or in part, on the value of, any interest in, or any quantitative measure or the occurrence of any event relating to, one or more commodities, securities, currencies, interest or other rates, indices, or other assets.
(d) Any officer
or director who shall approve or make loans prohibited in this section shall be
liable individually for the full amount of the principal and interest of any
such loan or extension of credit. If the * * * Commissioner of Banking
and Consumer Finance shall discover, in any examination of any open bank
that there is a loss on any loan or extension of credit made in
violation of this section, he shall make demand of all directors and officers
approving or making such loan or extension of credit for payment of the
entire unpaid balance on any such loan or extension of credit. Like
demand shall be made and suit brought by the receiver of any bank in
liquidation.
(e) Provided, however, this section shall not apply to loans or extensions of credit to the State of Mississippi, or to any political subdivision thereof, nor to any levee district.
SECTION 2. This act shall take effect and be in force from and after its passage.
