Unsecured Legal Lending Limit for National Banks

15% of capital and surplus:

PART 32--LENDING LIMITS--Table of Contents

Sec. 32.3 Lending limits.

(a) Combined general limit. A national bank's total outstanding loans and extensions of credit to one borrower may not exceed 15 percent of the bank's capital and surplus, plus an additional 10 percent of the bank's capital and surplus, if the amount that exceeds the bank's 15 percent general limit is fully secured by readily marketable collateral, as defined in Sec. 32.2(n). To qualify for the additional 10 percent limit, the bank must perfect a security interest in the collateral under applicable law and the collateral must have a current market value at all times of at least 100 percent of the amount of the loan or extension of credit that exceeds the bank's 15 percent general limit.

First published on BankersOnline.com 1/26/09