Current through Register Vol. 54, No. 45, November 9, 2024
Section 13.11 - Limits on indebtedness of one customer(a) Under section 306(c)(vi)(B) of the act (7 P. S. § 306(c)(vi)(B)), loans which are secured by documents of title covering readily marketable, nonperishable staples for a period of not more than 10 months from the date of the document of title are excluded from the indebtedness of one customer to which the indebtedness limitation applies.(b) Under section 306(c)(vi)(C) of the act (7 P. S. § 306(c)(vi)(C)), loans which are secured by documents of title covering readily marketable frozen or refrigerated staples for a period of not more than 6 months from the date of the document of title are excluded from the indebtedness of one customer to which the indebtedness limitation applies.(c) Under section 306(c)(ix)(B) of the act (7 P. S. § 306(c)(ix)(B)), loans which are secured by collateral which has a market value of not less than 120% of the amount of the obligations secured thereby are partially excluded from the indebtedness of one customer to which the indebtedness limitation applies. The loans are excluded from the limitation to the extent of 15% of the aggregate of the capital accounts of the institution. To qualify for this exclusion, the collateral shall be readily marketable so that: (1) The price may be easily and definitely ascertainable.(2) The collateral may be realized by sale.(d) The following forms of collateral shall be considered to have a market value, within the context of this section, to qualify for the exclusion described in subsection (c): (1) Collateral in the form of stocks, bonds and other securities, if the collateral is listed for trading on a recognized exchange registered under the Securities Exchange Act of 1934 (15 U.S.C.A. §§ 78(a)-79kk (1971)).(2) Collateral in the form of new automobiles in the hands of dealers.(3) Collateral in the form of equity securities of the following: (i) Banks or bank and trust companies incorporated under the laws of the Commonwealth.(ii) National banks having a place of business in this Commonwealth.(e) Collateral in the form of manufactured or fabricated articles, such as appliances in the hands of dealers, does not qualify for the exclusion described in subsection (c).The provisions of this §13.11 amended November 6, 1987, effective 11/7/1987, 17 Pa.B. 4553.The provisions of this §13.11 amended under section 306 of the Banking Code of 1965 (7 P. S. § 306).