P.R. Laws tit. 7, § 814
The Labor Bank shall not grant to the same person, natural or juridical, one or more loans amounting to a sum greater than fifteen percent (15%) of its paid-in capital and reserve fund, neither shall it accept the surety of any person, firm, partnership or corporation for a sum in excess of fifteen percent (15%) of its paid-in capital and reserve fund; Provided, That this restriction shall not be applicable to loans or discounts secured by collateral with a value of at least twenty-five percent (25%) more than the amount of the loan, neither to the discount of bills of exchange whenever such loans, so secured with said collateral, and such discounts of bills of exchange, so made, do not exceed thirty-three and one-third percent (33 1 / 3 %) of the paid-in capital of the bank plus its reserve fund.
Every partnership or corporation and its affiliates shall be considered as the same person, partnership or corporation when:
(1) A corporation holds more than fifty percent (50%) of the total capital stock of a corporation or more than fifty percent (50%) of voting stock.
(2) A partnership holds more than fifty percent (50%) of the total capital stock of a corporation or more than fifty percent (50%) of the voting stock of that corporation.
(3) A natural person holds more than fifty percent (50%) of the capital stock of a corporation or more than fifty percent (50%) of the voting stock.
(4) A natural person owns more than fifty percent (50%) of the total capital of a partnership.
During the first (3) three years of operation the Labor Bank shall not keep a loan portfolio in excess of the total of its capital available, plus forty percent (40%) of the deposits, excepting deposits of public funds secured by collateral. In the course of the first three (3) years, as circumstances may merit, the Secretary of the Treasury may authorize a greater proportion of loans in relation to the deposits.
The Labor Bank may grant loans to the stockholders of the Bank with or without such sureties as it may deem advisable.
The Bank shall not make loans or discounts with the surety of its own stock, neither shall it buy or withhold its said own stock, unless such surety or purchase is necessary to avoid loss in a debt previously contracted in good faith, and the stock so bought or acquired shall be disposed of at public or private sale within a period of one (1) year from the date of acquisition.
No director, officer, agent or employee may buy, or be directly or indirectly interested in the purchase of a note or other negotiable instrument issued by said bank (with the exception of the stock and bonds issued by said bank) for an amount less than its face value or its market value. Any director, officer, agent or employee who violates this provision shall be guilty of a misdemeanor and punished by a fine of at least thrice the face value of the instrument so bought.
Any employee of the bank may take a loan or make discounts in the bank, either as debtor, issuer, acceptor, endorser, drawer or surety whenever the amount of such obligations does not exceed two thousand dollars ($2,000). For loans to employees in excess of this amount the following provisions shall govern:
(a) Employees empowered to grant loans or authorize discounts may incur obligations not exceeding the sum of twenty five thousand dollars ($25,000) if previously approved unanimously by the directors present at the corresponding meetings of the Board of Directors of the Bank, there being required in the meeting where such obligations are considered a quorum of at least seventy-five percent (75%) of the total number of directors.
(b) The other employees not empowered to grant loans or to authorize discounts may incur obligations exceeding two thousand dollars ($2,000) if the total of such obligations has been previously approved unanimously by the directors present at the corresponding meetings of the Board of Directors of the Bank, there being required in the meeting where such obligations are considered a quorum of at least seventy-five percent (75%) of the total number of directors.
No firm, partnership or corporation in which an employee of the bank empowered to grant loans or to authorize discounts holds or controls, directly or indirectly, twenty percent (20%) or more of the capital stock of said firm or partnership, or holds or controls, directly or indirectly, twenty percent (20%) or more of the voting stock of said corporation may take a loan or make discounts in the bank, either as debtor, issuer, acceptor, endorser, drawer or surety, neither may the bank or foreign bank grant such loan or authorize such discount.
No director of the bank may take any loan or make any discount whatsoever in the bank, either as debtor, issuer, acceptor, endorser, drawer or surety, neither may the bank grant such loan or authorize such discount without the unanimous approval of its directors pres ent, there being required a quorum of at least seventy-five percent (75%) of the total number of directors at the meetings of the Board of Directors in which such loan or discounts are considered.
Every loan or discount approved by the Board of Directors of the bank pursuant to the provisions of the above-mentioned paragraphs shall be notified by the bank to the Secretary of the Treasury with an itemized report of the operation immediately after it takes place.
History —June 14, 1960, No. 86, p. 162, § 14; June 26, 1961, No. 115, p. 248, § 1; June 28, 1969, No. 117, p. 327, § 9; July 1, 1975, No. 134, Part 1, p. 404, § 6.