§ 371. Real estate loans

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 1913

   Pub. L. 63–6 § 24 · 38 Stat. 103

   Enacted · 12 U.S.C. § 371

   Dec. 23, 1913, ch. 6, § 24, 38 Stat. 273

   Source evidence

   Code source credit
   Dec. 23, 1913, ch. 6, § 24, 38 Stat. 273

2. 1958

   Pub. L. 85–536 § 3 · 72 Stat. 384

   1. Struck · 12 U.S.C. § 371

      Pub. L. 85–536 amended fourth par. by striking out “or the Small Business Administration” after “Housing and Home Finance Administrator” and “or the Small Business Act of 1953” after “or 1701g–1 of this title”

   2. Inserted · 12 U.S.C. § 371

      Pub. L. 85–536 inserting provisions exempting loans in which the Small Business Administration cooperates through agreements to participate on an immediate or deferred basis from the restrictions or limitations of this section imposed upon loans secured by real estate

   Source evidence

   Code amendment note
   Pub. L. 85–536 amended fourth par. by striking out “or the Small Business Administration” after “Housing and Home Finance Administrator” and “or the Small Business Act of 1953” after “or 1701g–1 of this title”, and inserting provisions exempting loans in which the Small Business Administration cooperates through agreements to participate on an immediate or deferred basis from the restrictions or limitations of this section imposed upon loans secured by real estate.

   Enacted provision · exact public law section
   Sec. 3. The fourth paragraph of section 24 of the Federal Reserve Act is amended (1) by striking out “or the Small Business Administration” and “or of the Small Business Act of 1953,”, and (2) by adding at the end thereof the following new sentence: “Loans in which the Small Business Administration cooperates through agreements to participate on an immediate or deferred basis under the Small Business Act shall not be subject to the restrictions or limitations of this section imposed upon loans secured by real estate.”

3. 1959

   Pub. L. 86–251 § 4(a) · 73 Stat. 487

   Substituted · 12 U.S.C. § 371

   Pub. L. 86–251, § 4(a), substituted in second sentence of first par., “under a lease which does not expire for at least 10 years beyond the maturity date of the loan” for “(1) under a lease for not less than ninety-nine years which is renewable or (2) under a lease having a period of not less than fifty years to run from the date the loan is made or acquired by the national banking association”

   Source evidence

   Code amendment note
   Pub. L. 86–251, § 4(a), substituted in second sentence of first par., “under a lease which does not expire for at least 10 years beyond the maturity date of the loan” for “(1) under a lease for not less than ninety-nine years which is renewable or (2) under a lease having a period of not less than fifty years to run from the date the loan is made or acquired by the national banking association”.

   Enacted provision · exact public law section
   (a) The second sentence of section 24 of the Federal Reserve Real estate loans. Act (12 U.S.C. 371) is amended to read as follows: “A loan 38 Stat. 273. secured by real estate within the meaning of this section shall be in the form of an obligation or obligations secured by a mortgage, trust deed, or other instrument upon real estate, which shall constitute a first lien on real estate in fee simple or, under such rules and regulations as may be prescribed by the Comptroller of the Currency, on a leasehold under a lease which does not expire for at least 10 years beyond the maturity date of the loan, and any national banking association may purchase any obligation so secured when the entire amount of such obligation is sold to the association.”

4. 1959

   Pub. L. 86–251 § 4(b)(1) · 73 Stat. 487

   1. Added · 12 U.S.C. § 371

      Pub. L. 86–251, § 4(b)(1), (2), added cl. (3) in third sentence of first par.

   2. Redesignated · 12 U.S.C. § 371

      Pub. L. 86–251, § 4(b)(1), (2), redesignated former cl. (3) as cl. (4), and prohibited the application of the described limitations and restrictions to State-guaranteed loans

   Target inherited from the preceding amendment note.

   Source evidence

   Code amendment note
   Pub. L. 86–251, § 4(b)(1), (2), added cl. (3) in third sentence of first par., redesignated former cl. (3) as cl. (4), and prohibited the application of the described limitations and restrictions to State-guaranteed loans.

   Enacted provision · exact public law section
   (1) The third sentence of section 24 of such Act is amended by inserting after “and (3)” the following: “any such loan may be made in an amount not to exceed 75 per centum of the appraised value Loan limitation. of the real estate offered as security and for a term not longer than 20 years if the loan is secured by an amortized mortgage, deed of trust, or other such instrument under the terms of which the installment payments are sufficient to amortize the entire principal of the loan within the period ending on the date of its maturity, and (4)”.

5. 1959

   Pub. L. 86–251 § 4(c) · 73 Stat. 487

   Inserted · 12 U.S.C. § 371

   Pub. L. 86–251, § 4(c), inserted provisions in third par. classifying certain loans for construction of industrial or commercial buildings as ordinary commercial loans and authorized investments in or liability on loans in an amount that includes 100 per centum of its unimpaired surplus fund

   Target inherited from the preceding amendment note.

   Source evidence

   Code amendment note
   Pub. L. 86–251, § 4(c), inserted provisions in third par. classifying certain loans for construction of industrial or commercial buildings as ordinary commercial loans and authorized investments in or liability on loans in an amount that includes 100 per centum of its unimpaired surplus fund.

   Enacted provision · exact public law section
   (c) The third paragraph of section 24 of such Act is amended to read as follows: “Loans made to finance the construction of industrial or commercial Construction loans. buildings and having maturities of not to exceed eighteen months where there is a valid and binding agreement entered into by a financially responsible lender to advance the full amount of the bank’s loan upon the completion of the buildings and loans made to finance the construction of residential or farm buildings and having maturities of not to exceed nine months, shall not be considered as loans secured by real estate within the meaning of this section but shall be classed as ordinary commercial loans whether or not secured by a mortgage or similar lien on the real estate upon which the building or buildings are being constructed: Provided, That no national banking association shall invest in, or be liable on, any such loans in an aggregate amount in excess of 100 per centum of its actually paid-in and unimpaired capital plus 100 per centum of its unimpaired surplus fund. Notes representing loans made under this section to finance the construction of residential or farm buildings and having maturities of not to exceed nine months shall be eligible for discount as commercial paper within the terms of the second paragraph of section 13 of this Act if accompanied by a valid and binding agreement to advance the full amount of the loan upon the completion of the building entered into by an individual, partnership, association, or corporation acceptable to the discounting bank.”

6. 1959

   Pub. L. 86–251 § 4(d) · 73 Stat. 487

   Added · 12 U.S.C. § 371

   Pub. L. 86–251, § 4(d), added par. classifying certain loans to manufacturing and industrial businesses as ordinary commercial loans

   Target inherited from the preceding amendment note.

   Source evidence

   Code amendment note
   Pub. L. 86–251, § 4(d), added par. classifying certain loans to manufacturing and industrial businesses as ordinary commercial loans.

   Enacted provision · exact public law section
   (d) Section 24 of such Act is further amended by adding at the 12 USC 371. end thereof the following new paragraph: “Loans made to manufacturing and industrial businesses where the Commercial loans. association looks for repayment out of the operations of the borrower’s business, relying primarily on the borrower’s general credit standing and forecast of operations, with or without other security, but wishes to take a mortgage on the borrower’s real estate as a precaution against contingencies, shall not be considered as real estate loans within the meaning of this section but shall be classed as ordinary commercial loans.”

7. 1961

   Housing Act of 1961

   Pub. L. 87–70 title VIII § 804(c) · 75 Stat. 149

   Inserted · 12 U.S.C. § 371

   Pub. L. 87–70 inserted “, or title V of the Housing Act of 1949, as amended” after “sections 590r to 590x–3 of title 16” in first par., and in next to last par. inserted provisions permitting home improvement loans which are insured under section 1709(k) or 1715k(h) of this title to be made without regard to the first lien requirements of this section

   Source evidence

   Code amendment note
   Pub. L. 87–70 inserted “, or title V of the Housing Act of 1949, as amended” after “sections 590r to 590x–3 of title 16” in first par., and in next to last par. inserted provisions permitting home improvement loans which are insured under section 1709(k) or 1715k(h) of this title to be made without regard to the first lien requirements of this section.

   Enacted provision · exact public law section
   (c) The first paragraph of section 24 of the Federal Reserve Act 12 U.S.C. 371) is amended by inserting after “the Act of August 28, 1937, as amended” the following: “, or title V of the Housing Act of 1949, as amended”.

8. 1962

   Pub. L. 87–717 · 76 Stat. 662

   Changed · 12 U.S.C. § 371

   Pub. L. 87–717 increased aggregate real estate loan limitation from 60 to 70 per centum of a bank’s time and savings deposits, and limitation on maturities for loans made to finance the construction of residential or farm buildings, from nine months or less to eighteen months or less

   Source evidence

   Code amendment note
   Pub. L. 87–717 increased aggregate real estate loan limitation from 60 to 70 per centum of a bank’s time and savings deposits, and limitation on maturities for loans made to finance the construction of residential or farm buildings, from nine months or less to eighteen months or less.

9. 1964

   Pub. L. 88–341 · 78 Stat. 233

   1. Substituted · 12 U.S.C. § 371

      Pub. L. 88–341 substituted “60 per centum of the appraised fair market value of the growing timber, lands, and improvements thereon” for “40 per centum of the appraised value of the economically marketable timber” increased the permissible loan term from 2 to 3 years in the case of unamortized loans, from 10 to 15 years in the case of amortized loans, and decreased the annual rate from 10 to 6⅔ per centum

   2. Substituted · 12 U.S.C. § 371

      Pub. L. 88–341 substituted “60 per centum of the original appraised total value of the property” for “40 per centum of the original appraised value of the economically marketable timber” increased the permissible loan term from 2 to 3 years in the case of unamortized loans, from 10 to 15 years in the case of amortized loans, and decreased the annual rate from 10 to 6⅔ per centum

   Target inherited from the preceding amendment note.

   Source evidence

   Code amendment note
   Pub. L. 88–341 substituted “60 per centum of the appraised fair market value of the growing timber, lands, and improvements thereon” for “40 per centum of the appraised value of the economically marketable timber”, “60 per centum of the original appraised total value of the property” for “40 per centum of the original appraised value of the economically marketable timber”, increased the permissible loan term from 2 to 3 years in the case of unamortized loans, from 10 to 15 years in the case of amortized loans, and decreased the annual rate from 10 to 6⅔ per centum.

10. 1964

    Housing Act of 1964

    Pub. L. 88–560 title X § 1004 · 78 Stat. 769

    1. Substituted · 12 U.S.C. § 371

       Pub. L. 88–560 substituted in cl. (3) of third sentence of first par. “80” for “75” years

    2. Substituted · 12 U.S.C. § 371

       Pub. L. 88–560 substituted in cl. (3) of third sentence of first par. “twenty-five” for “20” years

    Source evidence

    Code amendment note
    Pub. L. 88–560 substituted in cl. (3) of third sentence of first par. “80” for “75” per centum and “twenty-five” for “20” years.

    Enacted provision · exact public law section
    Sec. 1004. real estate loans by national banks Clause (3) of the third sentence of the first paragraph of section 24 of the Federal Reserve Act is amended to read as follows: 69 stat. 633; 73 stat. 489. 12 USC 371. “(3) any such loan may be made in an amount not to exceed 80 per centum of the appraised value of the real estate offered as security and for a term not longer than twenty-five years if the loan is secured by an amortized mortgage, deed of trust, or other such instrument under the terms of which the installment payments are sufficient to amortize the entire principal of the loan within the period ending on the date of its maturity, and”.

11. 1965

    Housing and Urban Development Act of 1965

    Pub. L. 89–117 title II § 201(b)(2) · 79 Stat. 451

    Changed · 12 U.S.C. § 371

    Pub. L. 89–117 permitted national banking associations to make loans for land development which are secured by mortgages insured under title X of the National Housing Act and increased from 18 months to 24 months the maximum maturity of industrial, commercial, and residential construction loans

    Source evidence

    Code amendment note
    Pub. L. 89–117 permitted national banking associations to make loans for land development which are secured by mortgages insured under title X of the National Housing Act and increased from 18 months to 24 months the maximum maturity of industrial, commercial, and residential construction loans.

    Enacted provision · exact public law section
    (2) The first paragraph of section 24 of the Federal Reserve Act is 69 Stat. 633. 12 USC 371. amended by inserting before the next to last sentence the following new sentence: “Notwithstanding the foregoing limitations and restrictions in this section, any national banking association may make loans for land development which are secured by mortgages insured under title X of the National Housing Act.”

12. 1966

    Demonstration Cities and Metropolitan Development Act of 1966

    Pub. L. 89–754 title V § 504(a)(2) · 80 Stat. 1255

    Changed · 12 U.S.C. § 371

    Pub. L. 89–754 permitted national banking associations to make loans for group practice facilities which are secured by mortgages insured under subchapter IX–B of chapter 13 of this title

    Source evidence

    Code amendment note
    Pub. L. 89–754 permitted national banking associations to make loans for group practice facilities which are secured by mortgages insured under subchapter IX–B of chapter 13 of this title.

    Enacted provision · exact public law section
    (2) The third sentence of the first paragraph of section 24 of the Federal Reserve Act, as amended (12 U.S.C. 371), is amended by 69 Stat. 633 inserting after “or sections 1471–1484 of title 42,” the following: “or which are insured by the Secretary of Housing and Urban Development pursuant to title XI of the National Housing Act,”.

13. 1967

    Pub. L. 90–19 § 26 · 81 Stat. 17

    Substituted · 12 U.S.C. § 371

    Pub. L. 90–19 substituted “Secretary of Housing and Urban Development” for “Housing and Home Finance Administrator” in first sentence of fourth par

    Source evidence

    Code amendment note
    Pub. L. 90–19 substituted “Secretary of Housing and Urban Development” for “Housing and Home Finance Administrator” in first sentence of fourth par.

    Enacted provision · exact public law section
    Sec. 26. The fourth paragraph of section 24 of the Federal Reserve Act is amended by striking out “Housing and Home Finance Administrator” in the first sentence and inserting in lieu thereof “Secretary of Housing and Urban Development”.

14. 1968

    Housing and Urban Development Act of 1968

    Pub. L. 90–448 § 416(b) · 82 Stat. 476

    Substituted · 12 U.S.C. § 371

    Pub. L. 90–448, § 416(b), substituted “any national banking association may make loans or purchase obligations for land development which are secured by mortgages insured under title X of the National Housing Act or guaranteed under title IV of the Housing and Urban Development Act of 1968” for “any national banking association may make loans for land development which are secured by mortgages insured under title X of the National Housing Act” in first par

    Source evidence

    Code amendment note
    Pub. L. 90–448, § 416(b), substituted “any national banking association may make loans or purchase obligations for land development which are secured by mortgages insured under title X of the National Housing Act or guaranteed under title IV of the Housing and Urban Development Act of 1968” for “any national banking association may make loans for land development which are secured by mortgages insured under title X of the National Housing Act” in first par.

    Enacted provision · exact public law section
    (b) The first paragraph of section 24 of the Federal Reserve Act is amended by striking out all that follows “national banking association” hi the fourth sentence and adding “may make loans or purchase obligations for land development which are secured by mortgages 79 stat. 461. 12 USC 1749aa. insured under title X of the National Housing Act or guaranteed under Title IV of the Housing and Urban Development Act of 1968.”.

15. 1968

    Housing and Urban Development Act of 1968

    Pub. L. 90–448 § 1718 · 82 Stat. 476

    1. Substituted · 12 U.S.C. § 371

       Pub. L. 90–448, § 1718, substituted “in whole or in part and at any time or times prior to the maturity of such obligation” for “when the entire amount of such obligation is sold to the association” in last par

    2. Substituted · 12 U.S.C. § 371

       Pub. L. 90–448, § 1718, substituted “thirty-six months” for “twenty-four months” in last par

    3. Substituted · 12 U.S.C. § 371

       Pub. L. 90–448, § 1718, substituted “Loans made to any borrower (i) where the association looks for repayment by relying primarily on the borrower’s general credit standing and forecast of income, with or without other security, or (ii) where the association relies on other security as collateral for the loans (including but not limited to a guaranty of a third party), and where, in either case described in clause (i) or (ii) above, the association wishes to take a mortgage, deed of trust, or other instrument upon real estate (whether or not constituting a first lien) as a precaution against contingencies, such loans shall not be considered as real estate loans within the meaning of this section but shall be classed as ordinary non-real-estate loans” for “Loans made to manufacturing and industrial businesses where the association looks for repayment out of the operations of the borrower’s business, relying primarily on the borrower’s general credit standing and forecast of operations, with or without other security, but wishes to take a mortgage on the borrower’s real estate as a precaution against contingencies, shall not be considered as real estate loans within the meaning of this section but shall be classed as ordinary commercial loans” in last par

    Target inherited from the preceding amendment note.

    Source evidence

    Code amendment note
    Pub. L. 90–448, § 1718, substituted “in whole or in part and at any time or times prior to the maturity of such obligation” for “when the entire amount of such obligation is sold to the association” wherever appearing in first and second pars., “thirty-six months” for “twenty-four months” in two places in second par., and “Loans made to any borrower (i) where the association looks for repayment by relying primarily on the borrower’s general credit standing and forecast of income, with or without other security, or (ii) where the association relies on other security as collateral for the loans (including but not limited to a guaranty of a third party), and where, in either case described in clause (i) or (ii) above, the association wishes to take a mortgage, deed of trust, or other instrument upon real estate (whether or not constituting a first lien) as a precaution against contingencies, such loans shall not be considered as real estate loans within the meaning of this section but shall be classed as ordinary non-real-estate loans” for “Loans made to manufacturing and industrial businesses where the association looks for repayment out of the operations of the borrower’s business, relying primarily on the borrower’s general credit standing and forecast of operations, with or without other security, but wishes to take a mortgage on the borrower’s real estate as a precaution against contingencies, shall not be considered as real estate loans within the meaning of this section but shall be classed as ordinary commercial loans” in last par.

    Enacted provision · exact public law section
    Sec. 1718. federal reserve act Section 24 of the Federal Reserve Act, as amended (12 U.S.C. 371), is amended— 73 stat. 489; 79 Stat 509. (1) by striking out “twenty-four months”, wherever it appears in the third paragraph and inserting in lieu thereof “thirty-six months”; (2) by striking out “when the entire amount of such obligation is sold to the association”, wherever it appears in the first and second paragraphs, and inserting in lieu thereof “in whole or in part and at any time or times prior to the maturity of such obligation”; and (3) by striking out the last paragraph and inserting in lieu thereof the following: “Loans made to any borrower (i) where the association looks for repayment by relying primarily on the borrower’s general credit standing and forecast of income, with or without other security, or (ii) where the association relies on other security as collateral for the loans (including but not limited to a guaranty of a third party), and where, in either case described in clause (i) or (ii) above, the association wishes to take a mortgage, deed of trust, or other instrument upon real estate (whether or not constituting a first lien) as a precaution against contingencies, such loans shall not be considered as real estate loans within the meaning of this section but shall be classed as ordinary non-real-estate loans.”

16. 1970

    Emergency Home Finance Act of 1970

    Pub. L. 91–351 title VII § 704 · 84 Stat. 450

    1. Substituted · 12 U.S.C. § 371

       Pub. L. 91–351 substituted in cl. (3) of third sentence of first par. “90 per centum” for “80 per centum” wherever appearing

    2. Substituted · 12 U.S.C. § 371

       Pub. L. 91–351 substituted in cl. (3) of third sentence of first par. “thirty years” for “twenty-five years” wherever appearing

    3. Substituted · 12 U.S.C. § 371

       Pub. L. 91–351 substituted in cl. (3) of third sentence of first par. “sixty months” for “thirty-six months” wherever appearing

    Target inherited from the preceding amendment note.

    Source evidence

    Code amendment note
    Pub. L. 91–351 substituted in cl. (3) of third sentence of first par. “90 per centum” for “80 per centum” and “thirty years” for “twenty-five years”, and in first sentence of third par. “sixty months” for “thirty-six months” wherever appearing.

    Enacted provision · exact public law section
    Sec. 704. real estate loans by national banks Section 24 of the Federal Reserve Act (12 U.S.C. 371) is amended— (1) by striking out “80 per centum” and “twenty-five years” in clause (3) of the third sentence of the first paragraph and inserting in lieu thereof “90 per centum” and “thirty years”, respectively; and (2) by striking out “thirty-six months”, each place it appears in the first sentence of the third paragraph, and inserting in lieu thereof “sixty months”.

17. 1970

    Housing and Urban Development Act of 1970

    Pub. L. 91–609 title VII § 727(c) · 84 Stat. 1770

    Changed · 12 U.S.C. § 371

    Pub. L. 91–609 authorized national banks to invest in obligations guaranteed under part B of the Urban Growth and New Community Development Act of 1970

    Source evidence

    Code amendment note
    Pub. L. 91–609 authorized national banks to invest in obligations guaranteed under part B of the Urban Growth and New Community Development Act of 1970.

    Enacted provision · exact public law section
    (c) The first paragraph of section 24 of the Federal Reserve Act 69 Stat. 633; 82 Stat. 518. 12 USC 371. is amended by inserting the following before the period at the end of the fourth sentence thereof: “or under part B of the Urban Growth and New Community Development Act of 1970”.

18. 1974

    Housing and Community Development Act of 1974

    Pub. L. 93–383 title VII § 711 · 88 Stat. 634

    1. Amended · 12 U.S.C. § 371(a)

       Pub. L. 93–383, §§ 711, 802(i)(1), designated unlettered first par. as subsec. (a), substantially revised provisions relating to real estate loans by associations

    2. Inserted · 12 U.S.C. § 371(a)

       Pub. L. 93–383, §§ 711, 802(i)(1), inserted reference to obligations guaranteed by section 1440 of title 42

    Source evidence

    Code amendment note
    Subsec. (a). Pub. L. 93–383, §§ 711, 802(i)(1), designated unlettered first par. as subsec. (a), substantially revised provisions relating to real estate loans by associations, and inserted reference to obligations guaranteed by section 1440 of title 42.

    Enacted provision · exact public law section
    Sec. 711. real estate loans by national banks Section 24 of the Federal Reserve Act (12 U.S.C. 371) is amended to read as follows: “Sec. 24 “real estate loans by national banks (a) (1) Any national banking association may make real estate loans, secured by liens upon unimproved real estate, upon improved real estate, including improved farmland and improved business and residential properties, and upon real estate to be improved by a building or buildings to be constructed or in the process of construction, in an amount which when added to the amount unpaid upon prior mortgages, liens, encumbrances, if any, upon such real estate does not exceed the respective proportions of appraised value as provided in this section. A loan secured by real estate within the meaning of this section shall be in the form of an obligation or obligations secured by a mortgage, trust deed, or other instrument, which shall constitute a lien on real estate in fee or, under such rules and regulations as may be prescribed by the Comptroller of the Currency, on a leasehold under a lease which does not expire for at least ten years beyond the maturity date of the loan, and any national banking association may purchase or sell any obligations so secured in whole or in part. The amount of any such loan hereafter made shall not exceed 66⅔ per centum of the appraised value if such real estate is unimproved, 75 per centum of the appraised value if such real estate is improved by offsite improvements such as streets, water, sewers, or other utilities, 75 per centum of the appraised value if such real estate is in the process of being improved by a building or buildings to be constructed or in the process of construction, or 90 per centum of the appraised value if such real estate is improved by a building or buildings. If any such loan exceeds 75 per centum of the appraised value of the real estate or if the real estate is improved with a one-to four-family dwelling, installment payments shall be required which are sufficient to amortize the entire principal of the loan within a period of not more than thirty years. “(2) The limitations and restrictions set forth in paragraph (1) shall not prevent the renewal or extension of loans heretofore made and shall not apply to real estate loans (A) which are insured under the provisions of the National Housing Act, (B) which are insured 12 USC 1701 and note. by the Secretary of Agriculture pursuant to title I of the Bankhead-Jones Farm Tenant Act, or the Act of August 28, 1937, as amended, 7 USC 1000 and note. 42 USC 1471. or title V of the Housing Act of 1949, as amended, or (C) which are guaranteed by the Secretary of Housing and Urban Development, for the payment of the obligations of which the full faith and credit of the United States is pledged, and such limitations and restrictions shall not apply to real estate loans which are fully guaranteed or insured by a State, or any agency or instrumentality thereof, or by a State authority for the payment of the obligations of which the faith and credit of the State is pledged, if under the terms of the guaranty or insurance agreement the association will be assured of repayment in accordance with the terms of the loan, or to any loan at least 20 per centum of which is guaranteed under chapter 37 of title 38, United States Code. “(3) Loans which are guaranteed or insured as described in paragraph (2) shall not be taken into account in determining the amount of real estate loans which a national banking association may make in relation to its capital and surplus or its time and savings deposits or in determining the amount of real estate loans secured by other than first liens. Where the collateral for any loan consists partly of real estate security and partly of other security, including a guaranty or endorsement by or an obligation or commitment of a person other than the borrower, only the amount by which the loan exceeds the value as collateral of such other security shall be considered a loan upon the security of real estate, and in no event shall a loan be considered as a real estate loan where there is a valid and binding agreement which is entered into by a financially responsible lender or other party either directly with the association or which is for the benefit of or has been assigned to the association and pursuant to which agreement the lender or other party is required to advance to the association within sixty months from the date of the making of such loan the full amount of the loan to be made by the association upon the security of real estate. Except as otherwise provided, no such association shall make real estate loans in an aggregate sum in excess of the amount of the capital stock of such association paid in and unimpaired plus the amount of its unimpaired surplus fund, or in excess of the amount of its time and savings deposits, whichever is greater: Provided, That the amount unpaid upon real estate loans secured by other than first liens, when added to the amount unpaid upon prior mortgages, liens, and encumbrances, shall not exceed in an aggregate sum 20 per centum of the amount of the capital stock of such association paid in and unimpaired plus 20 per centum of the amount of its unimpaired surplus fund. “(b) Any national banking association may make real estate loans secured by liens upon forest tracts which are properly managed in all respects. Such loans shall be in the form of an obligation or obligations secured by mortgage, trust deed, or other such instrument; and any national banking association may purchase or sell any obligations so secured in whole or in part. The amount of any such loan, when added to the amount unpaid upon prior mortgages, liens, and encumbrances, if any, shall not exceed 66⅔ per centum of the appraised fair market value of the growing timber, lands, and improvements thereon offered as security and the loan shall be made upon such terms and conditions as to assure that at no time shall the loan balance, when added to the amount unpaid upon prior mortgages, liens, and encumbrances, if any, exceed 66⅔ per centum of the original appraised total value of the property then remaining. No such loan shall be made for a longer term than three years; except that any such loan may be made for a term not longer than fifteen years if the loan is secured by an amortized mortgage, deed of trust, or other such instrument under the terms of which the installment payments are sufficient to amortize the principal of the loan within a period of not more than fifteen years and at a rate at least 6⅔ per centum per annum. All such loans secured by liens upon forest tracts shall be included in the permissible aggregate of all real estate loans and, when secured by other than first liens, in the permissible aggregate of all real estate loans secured by other than first liens, prescribed in subsection (a), but no national banking association shall make forest tract loans in an aggregate sum in excess of 50 per centum of its capital stock paid in and unimpaired plus 50 per centum of its unimpaired surplus fund. “(c) Loans made to finance the construction of a building or buildings and having maturities of not to exceed sixty months where there is a valid and binding agreement entered into by a financially responsible lender or other party to advance the full amount of the bank’s loan upon completion of the building or buildings, and loans made to finance the construction of residential or farm buildings and having maturities of not to exceed sixty months, may be considered as real estate loans if the loans qualify under this section, or such loans may be classed as commercial loans whether or not secured by a mortgage or similar lien on the real estate upon which the building or buildings are being constructed, at the option of each national banking association that may have an interest in such loan: Provided, That no national banking association shall invest in, or be liable on, any such loans classed as commercial loans under this subsection in an aggregate amount in excess of 100 per centum of its actually paid-in and unimpaired capital plus 100 per centum of its unimpaired surplus fund. “(d) Notes representing loans made under this section to finance the construction of residential or farm buildings and having maturities of not to exceed nine months shall be eligible for discount as commercial paper within the terms of the second paragraph of section 13 of this Act if accompanied by a valid and binding agreement 12 USC 343. to advance the full amount of the loan upon the completion of the building entered into by an individual, partnership, association, or corporation acceptable to the discounting bank. “(e) Loans made to any borrower (i) where the association looks for repayment by relying primarily on the borrower’s general credit standing and forecast of income, with or without other security, or (ii) secured by an assignment of rents under a lease, and where, in either case described in clause (i) or (ii) above, the association wishes to take a mortgage, deed of trust, or other instrument upon real estate (whether or not constituting a first lien) as a precaution against contingencies, and loans in which the Small Business Administration cooperates through agreements to participate on an immediate or deferred or guaranteed basis under the Small Business Act, shall not 15 USC 631 note. be considered as real estate loans within the meaning of this section but shall be classed as commercial loans. “(f) Any national banking association may make loans upon the security of real estate that do not comply with the limitations and restrictions in this section, if the total unpaid amount loaned, exclusive of loans which subsequently comply with such limitations and restrictions, does not exceed 10 per centum of the amount that a national banking association may invest in real estate loans. The total unpaid amount so loaned shall be included in the aggregate sum that such association may invest in real estate loans. “(g) Loans made pursuant to this section shall be subject to such conditions and limitations as the Comptroller of the Currency may prescribe by rule or regulation.”.

19. 1974

    Housing and Community Development Act of 1974

    Pub. L. 93–383 § 711 · 88 Stat. 634

    Amended · 12 U.S.C. § 371(b)(f)

    Pub. L. 93–383, § 711, designated unlettered second, third, fourth, and fifth pars. as subsecs. (b) to (f) and substantially revised provisions relating to real estate loans secured by liens upon forest tracts, loans made to finance the construction of buildings, notes representing loans, repayment of loans, and waiver of restrictions and limitations

    Source evidence

    Code amendment note
    Subsecs. (b) to (f). Pub. L. 93–383, § 711, designated unlettered second, third, fourth, and fifth pars. as subsecs. (b) to (f) and substantially revised provisions relating to real estate loans secured by liens upon forest tracts, loans made to finance the construction of buildings, notes representing loans, repayment of loans, and waiver of restrictions and limitations.

    Enacted provision · exact public law section
    Sec. 711. real estate loans by national banks Section 24 of the Federal Reserve Act (12 U.S.C. 371) is amended to read as follows: “Sec. 24 “real estate loans by national banks (a) (1) Any national banking association may make real estate loans, secured by liens upon unimproved real estate, upon improved real estate, including improved farmland and improved business and residential properties, and upon real estate to be improved by a building or buildings to be constructed or in the process of construction, in an amount which when added to the amount unpaid upon prior mortgages, liens, encumbrances, if any, upon such real estate does not exceed the respective proportions of appraised value as provided in this section. A loan secured by real estate within the meaning of this section shall be in the form of an obligation or obligations secured by a mortgage, trust deed, or other instrument, which shall constitute a lien on real estate in fee or, under such rules and regulations as may be prescribed by the Comptroller of the Currency, on a leasehold under a lease which does not expire for at least ten years beyond the maturity date of the loan, and any national banking association may purchase or sell any obligations so secured in whole or in part. The amount of any such loan hereafter made shall not exceed 66⅔ per centum of the appraised value if such real estate is unimproved, 75 per centum of the appraised value if such real estate is improved by offsite improvements such as streets, water, sewers, or other utilities, 75 per centum of the appraised value if such real estate is in the process of being improved by a building or buildings to be constructed or in the process of construction, or 90 per centum of the appraised value if such real estate is improved by a building or buildings. If any such loan exceeds 75 per centum of the appraised value of the real estate or if the real estate is improved with a one-to four-family dwelling, installment payments shall be required which are sufficient to amortize the entire principal of the loan within a period of not more than thirty years. “(2) The limitations and restrictions set forth in paragraph (1) shall not prevent the renewal or extension of loans heretofore made and shall not apply to real estate loans (A) which are insured under the provisions of the National Housing Act, (B) which are insured 12 USC 1701 and note. by the Secretary of Agriculture pursuant to title I of the Bankhead-Jones Farm Tenant Act, or the Act of August 28, 1937, as amended, 7 USC 1000 and note. 42 USC 1471. or title V of the Housing Act of 1949, as amended, or (C) which are guaranteed by the Secretary of Housing and Urban Development, for the payment of the obligations of which the full faith and credit of the United States is pledged, and such limitations and restrictions shall not apply to real estate loans which are fully guaranteed or insured by a State, or any agency or instrumentality thereof, or by a State authority for the payment of the obligations of which the faith and credit of the State is pledged, if under the terms of the guaranty or insurance agreement the association will be assured of repayment in accordance with the terms of the loan, or to any loan at least 20 per centum of which is guaranteed under chapter 37 of title 38, United States Code. “(3) Loans which are guaranteed or insured as described in paragraph (2) shall not be taken into account in determining the amount of real estate loans which a national banking association may make in relation to its capital and surplus or its time and savings deposits or in determining the amount of real estate loans secured by other than first liens. Where the collateral for any loan consists partly of real estate security and partly of other security, including a guaranty or endorsement by or an obligation or commitment of a person other than the borrower, only the amount by which the loan exceeds the value as collateral of such other security shall be considered a loan upon the security of real estate, and in no event shall a loan be considered as a real estate loan where there is a valid and binding agreement which is entered into by a financially responsible lender or other party either directly with the association or which is for the benefit of or has been assigned to the association and pursuant to which agreement the lender or other party is required to advance to the association within sixty months from the date of the making of such loan the full amount of the loan to be made by the association upon the security of real estate. Except as otherwise provided, no such association shall make real estate loans in an aggregate sum in excess of the amount of the capital stock of such association paid in and unimpaired plus the amount of its unimpaired surplus fund, or in excess of the amount of its time and savings deposits, whichever is greater: Provided, That the amount unpaid upon real estate loans secured by other than first liens, when added to the amount unpaid upon prior mortgages, liens, and encumbrances, shall not exceed in an aggregate sum 20 per centum of the amount of the capital stock of such association paid in and unimpaired plus 20 per centum of the amount of its unimpaired surplus fund. “(b) Any national banking association may make real estate loans secured by liens upon forest tracts which are properly managed in all respects. Such loans shall be in the form of an obligation or obligations secured by mortgage, trust deed, or other such instrument; and any national banking association may purchase or sell any obligations so secured in whole or in part. The amount of any such loan, when added to the amount unpaid upon prior mortgages, liens, and encumbrances, if any, shall not exceed 66⅔ per centum of the appraised fair market value of the growing timber, lands, and improvements thereon offered as security and the loan shall be made upon such terms and conditions as to assure that at no time shall the loan balance, when added to the amount unpaid upon prior mortgages, liens, and encumbrances, if any, exceed 66⅔ per centum of the original appraised total value of the property then remaining. No such loan shall be made for a longer term than three years; except that any such loan may be made for a term not longer than fifteen years if the loan is secured by an amortized mortgage, deed of trust, or other such instrument under the terms of which the installment payments are sufficient to amortize the principal of the loan within a period of not more than fifteen years and at a rate at least 6⅔ per centum per annum. All such loans secured by liens upon forest tracts shall be included in the permissible aggregate of all real estate loans and, when secured by other than first liens, in the permissible aggregate of all real estate loans secured by other than first liens, prescribed in subsection (a), but no national banking association shall make forest tract loans in an aggregate sum in excess of 50 per centum of its capital stock paid in and unimpaired plus 50 per centum of its unimpaired surplus fund. “(c) Loans made to finance the construction of a building or buildings and having maturities of not to exceed sixty months where there is a valid and binding agreement entered into by a financially responsible lender or other party to advance the full amount of the bank’s loan upon completion of the building or buildings, and loans made to finance the construction of residential or farm buildings and having maturities of not to exceed sixty months, may be considered as real estate loans if the loans qualify under this section, or such loans may be classed as commercial loans whether or not secured by a mortgage or similar lien on the real estate upon which the building or buildings are being constructed, at the option of each national banking association that may have an interest in such loan: Provided, That no national banking association shall invest in, or be liable on, any such loans classed as commercial loans under this subsection in an aggregate amount in excess of 100 per centum of its actually paid-in and unimpaired capital plus 100 per centum of its unimpaired surplus fund. “(d) Notes representing loans made under this section to finance the construction of residential or farm buildings and having maturities of not to exceed nine months shall be eligible for discount as commercial paper within the terms of the second paragraph of section 13 of this Act if accompanied by a valid and binding agreement 12 USC 343. to advance the full amount of the loan upon the completion of the building entered into by an individual, partnership, association, or corporation acceptable to the discounting bank. “(e) Loans made to any borrower (i) where the association looks for repayment by relying primarily on the borrower’s general credit standing and forecast of income, with or without other security, or (ii) secured by an assignment of rents under a lease, and where, in either case described in clause (i) or (ii) above, the association wishes to take a mortgage, deed of trust, or other instrument upon real estate (whether or not constituting a first lien) as a precaution against contingencies, and loans in which the Small Business Administration cooperates through agreements to participate on an immediate or deferred or guaranteed basis under the Small Business Act, shall not 15 USC 631 note. be considered as real estate loans within the meaning of this section but shall be classed as commercial loans. “(f) Any national banking association may make loans upon the security of real estate that do not comply with the limitations and restrictions in this section, if the total unpaid amount loaned, exclusive of loans which subsequently comply with such limitations and restrictions, does not exceed 10 per centum of the amount that a national banking association may invest in real estate loans. The total unpaid amount so loaned shall be included in the aggregate sum that such association may invest in real estate loans. “(g) Loans made pursuant to this section shall be subject to such conditions and limitations as the Comptroller of the Currency may prescribe by rule or regulation.”.

20. 1974

    Housing and Community Development Act of 1974

    Pub. L. 93–383 § 711 · 88 Stat. 634

    Added · 12 U.S.C. § 371(g)

    Pub. L. 93–383, § 711, added subsec. (g) authorizing the Comptroller of the Currency to prescribe rules and regulations relating to loans

    Source evidence

    Code amendment note
    Subsec. (g). Pub. L. 93–383, § 711, added subsec. (g) authorizing the Comptroller of the Currency to prescribe rules and regulations relating to loans.

    Enacted provision · exact public law section
    Sec. 711. real estate loans by national banks Section 24 of the Federal Reserve Act (12 U.S.C. 371) is amended to read as follows: “Sec. 24 “real estate loans by national banks (a) (1) Any national banking association may make real estate loans, secured by liens upon unimproved real estate, upon improved real estate, including improved farmland and improved business and residential properties, and upon real estate to be improved by a building or buildings to be constructed or in the process of construction, in an amount which when added to the amount unpaid upon prior mortgages, liens, encumbrances, if any, upon such real estate does not exceed the respective proportions of appraised value as provided in this section. A loan secured by real estate within the meaning of this section shall be in the form of an obligation or obligations secured by a mortgage, trust deed, or other instrument, which shall constitute a lien on real estate in fee or, under such rules and regulations as may be prescribed by the Comptroller of the Currency, on a leasehold under a lease which does not expire for at least ten years beyond the maturity date of the loan, and any national banking association may purchase or sell any obligations so secured in whole or in part. The amount of any such loan hereafter made shall not exceed 66⅔ per centum of the appraised value if such real estate is unimproved, 75 per centum of the appraised value if such real estate is improved by offsite improvements such as streets, water, sewers, or other utilities, 75 per centum of the appraised value if such real estate is in the process of being improved by a building or buildings to be constructed or in the process of construction, or 90 per centum of the appraised value if such real estate is improved by a building or buildings. If any such loan exceeds 75 per centum of the appraised value of the real estate or if the real estate is improved with a one-to four-family dwelling, installment payments shall be required which are sufficient to amortize the entire principal of the loan within a period of not more than thirty years. “(2) The limitations and restrictions set forth in paragraph (1) shall not prevent the renewal or extension of loans heretofore made and shall not apply to real estate loans (A) which are insured under the provisions of the National Housing Act, (B) which are insured 12 USC 1701 and note. by the Secretary of Agriculture pursuant to title I of the Bankhead-Jones Farm Tenant Act, or the Act of August 28, 1937, as amended, 7 USC 1000 and note. 42 USC 1471. or title V of the Housing Act of 1949, as amended, or (C) which are guaranteed by the Secretary of Housing and Urban Development, for the payment of the obligations of which the full faith and credit of the United States is pledged, and such limitations and restrictions shall not apply to real estate loans which are fully guaranteed or insured by a State, or any agency or instrumentality thereof, or by a State authority for the payment of the obligations of which the faith and credit of the State is pledged, if under the terms of the guaranty or insurance agreement the association will be assured of repayment in accordance with the terms of the loan, or to any loan at least 20 per centum of which is guaranteed under chapter 37 of title 38, United States Code. “(3) Loans which are guaranteed or insured as described in paragraph (2) shall not be taken into account in determining the amount of real estate loans which a national banking association may make in relation to its capital and surplus or its time and savings deposits or in determining the amount of real estate loans secured by other than first liens. Where the collateral for any loan consists partly of real estate security and partly of other security, including a guaranty or endorsement by or an obligation or commitment of a person other than the borrower, only the amount by which the loan exceeds the value as collateral of such other security shall be considered a loan upon the security of real estate, and in no event shall a loan be considered as a real estate loan where there is a valid and binding agreement which is entered into by a financially responsible lender or other party either directly with the association or which is for the benefit of or has been assigned to the association and pursuant to which agreement the lender or other party is required to advance to the association within sixty months from the date of the making of such loan the full amount of the loan to be made by the association upon the security of real estate. Except as otherwise provided, no such association shall make real estate loans in an aggregate sum in excess of the amount of the capital stock of such association paid in and unimpaired plus the amount of its unimpaired surplus fund, or in excess of the amount of its time and savings deposits, whichever is greater: Provided, That the amount unpaid upon real estate loans secured by other than first liens, when added to the amount unpaid upon prior mortgages, liens, and encumbrances, shall not exceed in an aggregate sum 20 per centum of the amount of the capital stock of such association paid in and unimpaired plus 20 per centum of the amount of its unimpaired surplus fund. “(b) Any national banking association may make real estate loans secured by liens upon forest tracts which are properly managed in all respects. Such loans shall be in the form of an obligation or obligations secured by mortgage, trust deed, or other such instrument; and any national banking association may purchase or sell any obligations so secured in whole or in part. The amount of any such loan, when added to the amount unpaid upon prior mortgages, liens, and encumbrances, if any, shall not exceed 66⅔ per centum of the appraised fair market value of the growing timber, lands, and improvements thereon offered as security and the loan shall be made upon such terms and conditions as to assure that at no time shall the loan balance, when added to the amount unpaid upon prior mortgages, liens, and encumbrances, if any, exceed 66⅔ per centum of the original appraised total value of the property then remaining. No such loan shall be made for a longer term than three years; except that any such loan may be made for a term not longer than fifteen years if the loan is secured by an amortized mortgage, deed of trust, or other such instrument under the terms of which the installment payments are sufficient to amortize the principal of the loan within a period of not more than fifteen years and at a rate at least 6⅔ per centum per annum. All such loans secured by liens upon forest tracts shall be included in the permissible aggregate of all real estate loans and, when secured by other than first liens, in the permissible aggregate of all real estate loans secured by other than first liens, prescribed in subsection (a), but no national banking association shall make forest tract loans in an aggregate sum in excess of 50 per centum of its capital stock paid in and unimpaired plus 50 per centum of its unimpaired surplus fund. “(c) Loans made to finance the construction of a building or buildings and having maturities of not to exceed sixty months where there is a valid and binding agreement entered into by a financially responsible lender or other party to advance the full amount of the bank’s loan upon completion of the building or buildings, and loans made to finance the construction of residential or farm buildings and having maturities of not to exceed sixty months, may be considered as real estate loans if the loans qualify under this section, or such loans may be classed as commercial loans whether or not secured by a mortgage or similar lien on the real estate upon which the building or buildings are being constructed, at the option of each national banking association that may have an interest in such loan: Provided, That no national banking association shall invest in, or be liable on, any such loans classed as commercial loans under this subsection in an aggregate amount in excess of 100 per centum of its actually paid-in and unimpaired capital plus 100 per centum of its unimpaired surplus fund. “(d) Notes representing loans made under this section to finance the construction of residential or farm buildings and having maturities of not to exceed nine months shall be eligible for discount as commercial paper within the terms of the second paragraph of section 13 of this Act if accompanied by a valid and binding agreement 12 USC 343. to advance the full amount of the loan upon the completion of the building entered into by an individual, partnership, association, or corporation acceptable to the discounting bank. “(e) Loans made to any borrower (i) where the association looks for repayment by relying primarily on the borrower’s general credit standing and forecast of income, with or without other security, or (ii) secured by an assignment of rents under a lease, and where, in either case described in clause (i) or (ii) above, the association wishes to take a mortgage, deed of trust, or other instrument upon real estate (whether or not constituting a first lien) as a precaution against contingencies, and loans in which the Small Business Administration cooperates through agreements to participate on an immediate or deferred or guaranteed basis under the Small Business Act, shall not 15 USC 631 note. be considered as real estate loans within the meaning of this section but shall be classed as commercial loans. “(f) Any national banking association may make loans upon the security of real estate that do not comply with the limitations and restrictions in this section, if the total unpaid amount loaned, exclusive of loans which subsequently comply with such limitations and restrictions, does not exceed 10 per centum of the amount that a national banking association may invest in real estate loans. The total unpaid amount so loaned shall be included in the aggregate sum that such association may invest in real estate loans. “(g) Loans made pursuant to this section shall be subject to such conditions and limitations as the Comptroller of the Currency may prescribe by rule or regulation.”.

21. 1982

    Garn-St Germain Depository Institutions Act of 1982

    Pub. L. 97–320 title IV § 403(a) · 96 Stat. 1469

    Amended · 12 U.S.C. § 371(a)

    Pub. L. 97–320 amended subsec. (a) generally. Prior to amendment subsec. (a) read as follows:

    Source evidence

    Code amendment note
    Subsec. (a). Pub. L. 97–320 amended subsec. (a) generally. Prior to amendment subsec. (a) read as follows:

    “(1) Any national banking association may make real estate loans, secured by liens upon unimproved real estate, upon improved real estate, including improved farmland and improved business and residential properties, and upon real estate to be improved by a building or buildings to be constructed or in the process of construction, in an amount which when added to the amount unpaid upon prior mortgages, liens, encumbrances, if any, upon such real estate does not exceed the respective proportions of appraised value as provided in this section. A loan secured by real estate within the meaning of this section shall be in the form of an obligation or obligations secured by a mortgage, trust deed, or other instrument, which shall constitute a lien on real estate in fee or, under such rules and regulations as may be prescribed by the Comptroller of the Currency, on a leasehold under a lease which does not expire for at least ten years beyond the maturity date of the loan, and any national banking association may purchase or sell any obligations so secured in whole or in part. The amount of any such loan hereafter made shall not exceed 66⅔ per centum of the appraised value if such real estate is unimproved, 75 per centum of the appraised value if such real estate is improved by offsite improvements such as streets, water, sewers, or other utilities, 75 per centum of the appraised value if such real estate is in the process of being improved by a building or buildings to be constructed or in the process of construction, or 90 per centum of the appraised value if such real estate is improved by a building or buildings. If any such loan exceeds 75 per centum of the appraised value of the real estate or if the real estate is improved with a one- to four-family dwelling, installment payments shall be required which are sufficient to amortize the entire principal of the loan within a period of not more than thirty years. “(2) The limitations and restrictions set forth in paragraph (1) shall not prevent the renewal or extension of loans heretofore made and shall not apply to real estate loans (A) which are insured under the provisions of the National Housing Act [12 U.S.C. 1701 et seq.], (B) which are insured by the Secretary of Agriculture pursuant to title I of the Bankhead-Jones Farm Tenant Act, or the Act of August 28, 1937, as amended, or title V of the Housing Act of 1949, as amended, [42 U.S.C. 1471 et seq.], or (C) which are guaranteed by the Secretary of Housing and Urban Development, for the payment of the obligations of which the full faith and credit of the United States is pledged, and such limitations and restrictions shall not apply to real estate loans which are fully guaranteed or insured by a State, or any agency or instrumentality thereof, or by a State authority for the payment of the obligations of which the faith and credit of the State is pledged, if under the terms of the guaranty or insurance agreement the association will be assured of repayment in accordance with the terms of the loan, or to any loan at least 20 per centum of which is guaranteed under chapter 37 of title 38, or to obligations guaranteed under section 1440 of title 42. “(3) Loans which are guaranteed or insured as described in paragraph (2) shall not be taken into account in determining the amount of real estate loans which a national banking association may make in relation to its capital and surplus or its time and savings deposits or in determining, the amount of real estate loans secured by other than first liens. Where the collateral for any loan consists partly of real estate security and partly of other security, including a guaranty or endorsement by or an obligation or commitment of a person other than the borrower, only the amount by which the loan exceeds the value as collateral of such other security shall be considered a loan upon the security of real estate, and in no event shall a loan be considered as a real estate loan where there is a valid and binding agreement which is entered into by a financially responsible lender or other party either directly with the association or which is for the benefit of or has been assigned to the association and pursuant to which agreement the lender or other party is required to advance to the association within sixty months from the date of the making of such loan the full amount of the loan to be made by the association upon the security of real estate. Except as otherwise provided, no such association shall make real estate loans in an aggregate sum in excess of the amount of the capital stock of such association paid in and unimpaired plus the amount of its unimpaired surplus fund, or in excess of the amount of its time and savings deposits, whichever is greater: Provided, That the amount unpaid upon real estate loans secured by other than first liens, when added to the amount unpaid upon prior mortgages, liens, and encumbrances, shall not exceed in an aggregate sum 20 per centum of the amount of the capital stock of such association paid in and unimpaired plus 20 per centum of the amount of its unimpaired surplus fund.”

    Enacted provision · exact public law section
    (a) Section 24 of the Federal Reserve Act (12 U.S.C. 371) is amended to read as follows: “Sec. 24. “real estate loans (a) Any national banking association may make, arrange, purchase or sell loans or extensions of credit secured by liens on interests in real estate, subject to such terms, conditions, and limitations as may be prescribed by the Comptroller of the Currency by order, rule, or regulation. “(b) Notes representing loans made under this section to finance the construction of residential or farm buildings and having maturities not to exceed nine months shall be eligible for discount as commercial paper within the terms of the second paragraph of section 13 of the Federal Reserve Act if accompanied by a valid and 12 USC 82, 342–347, 347c, 372. binding agreement to advance the full amount of the loan upon the completion of the building entered into by an individual, partnership, association, or corporation acceptable to the discounting bank.”.

    Effective date note
    Pub. L. 97–320, title IV, § 403(c), Oct. 15, 1982, 96 Stat. 1511, provided that: “This section [amending this section and section 92 of this title] shall take effect upon the expiration of one hundred and eighty days after the date of its enactment [Oct. 15, 1982].”

22. 1982

    Garn-St Germain Depository Institutions Act of 1982

    Pub. L. 97–320 title IV § 403(a) · 96 Stat. 1469

    1. Redesignated · 12 U.S.C. § 371(b)

       Pub. L. 97–320 redesignated subsec. (d) as (b)

    2. Struck · 12 U.S.C. § 371(b)

       Pub. L. 97–320 struck out former subsec. (b) “Any national banking association may make real estate loans secured by liens upon forest tracts which are properly managed in all respects. Such loans shall be in the form of an obligation or obligations secured by mortgage, trust deed, or other such instrument; and any national banking association may purchase or sell any obligations so secured in whole or in part. The amount of any such loan, when added to the amount unpaid upon prior mortgages, liens, and encumbrances, if any, shall not exceed 66⅔ per centum of the appraised fair market value of the growing timber, lands, and improvements thereon offered as security and the loan shall be made upon such terms and conditions as to assure that at no time shall the loan balance, when added to the amount unpaid upon prior mortgages, liens, and encumbrances, if any, exceed 66⅔ per centum of the original appraised total value of the property then remaining. No such loan shall be made for a longer term than three years; except that any such loan may be made for a term not longer than fifteen years if the loan is secured by an amortized mortgage, deed of trust, or other such instrument under the terms of which the installment payments are sufficient to amortize the principal of the loan within a period of not more than fifteen years and at a rate at least 6⅔ per centum per annum. All such loans secured by liens upon forest tracts shall be included in the permissible aggregate of all real estate loans and, when secured by other than first liens, in the permissible aggregate of all real estate loans secured by other than first liens, prescribed in subsection (a) of this section, but no national banking association shall make forest tract loans in an aggregate sum in excess of 50 per centum of its capital stock paid in and unimpaired plus 50 per centum of its unimpaired surplus fund.”

    Source evidence

    Code amendment note
    Subsec. (b). Pub. L. 97–320 redesignated subsec. (d) as (b) and struck out former subsec. (b) “Any national banking association may make real estate loans secured by liens upon forest tracts which are properly managed in all respects. Such loans shall be in the form of an obligation or obligations secured by mortgage, trust deed, or other such instrument; and any national banking association may purchase or sell any obligations so secured in whole or in part. The amount of any such loan, when added to the amount unpaid upon prior mortgages, liens, and encumbrances, if any, shall not exceed 66⅔ per centum of the appraised fair market value of the growing timber, lands, and improvements thereon offered as security and the loan shall be made upon such terms and conditions as to assure that at no time shall the loan balance, when added to the amount unpaid upon prior mortgages, liens, and encumbrances, if any, exceed 66⅔ per centum of the original appraised total value of the property then remaining. No such loan shall be made for a longer term than three years; except that any such loan may be made for a term not longer than fifteen years if the loan is secured by an amortized mortgage, deed of trust, or other such instrument under the terms of which the installment payments are sufficient to amortize the principal of the loan within a period of not more than fifteen years and at a rate at least 6⅔ per centum per annum. All such loans secured by liens upon forest tracts shall be included in the permissible aggregate of all real estate loans and, when secured by other than first liens, in the permissible aggregate of all real estate loans secured by other than first liens, prescribed in subsection (a) of this section, but no national banking association shall make forest tract loans in an aggregate sum in excess of 50 per centum of its capital stock paid in and unimpaired plus 50 per centum of its unimpaired surplus fund.”

    Enacted provision · exact public law section
    (a) Section 24 of the Federal Reserve Act (12 U.S.C. 371) is amended to read as follows: “Sec. 24. “real estate loans (a) Any national banking association may make, arrange, purchase or sell loans or extensions of credit secured by liens on interests in real estate, subject to such terms, conditions, and limitations as may be prescribed by the Comptroller of the Currency by order, rule, or regulation. “(b) Notes representing loans made under this section to finance the construction of residential or farm buildings and having maturities not to exceed nine months shall be eligible for discount as commercial paper within the terms of the second paragraph of section 13 of the Federal Reserve Act if accompanied by a valid and 12 USC 82, 342–347, 347c, 372. binding agreement to advance the full amount of the loan upon the completion of the building entered into by an individual, partnership, association, or corporation acceptable to the discounting bank.”.

    Effective date note
    Pub. L. 97–320, title IV, § 403(c), Oct. 15, 1982, 96 Stat. 1511, provided that: “This section [amending this section and section 92 of this title] shall take effect upon the expiration of one hundred and eighty days after the date of its enactment [Oct. 15, 1982].”

23. 1982

    Garn-St Germain Depository Institutions Act of 1982

    Pub. L. 97–320 title IV § 403(a) · 96 Stat. 1469

    Struck · 12 U.S.C. § 371(c)

    Pub. L. 97–320 struck out subsec. (c) “Loans made to finance the construction of a building or buildings and having maturities of not to exceed sixty months where there is a valid and binding agreement entered into by a financially responsible lender or other party to advance the full amount of the bank’s loan upon completion of the building or buildings, and loans made to finance the construction of residential or farm buildings and having maturities of not to exceed sixty months, may be considered as real estate loans if the loans qualify under this section, or such loans may be classed as commercial loans whether or not secured by a mortgage or similar lien on the real estate upon which the building or buildings are being constructed, at the option of each national banking association that may have an interest in such loan: Provided, That no national banking association shall invest in, or be liable on, any such loans classed as commercial loans under this subsection in an aggregate amount in excess of 100 per centum of its actually paid-in and unimpaired capital plus 100 per centum of its unimpaired surplus fund.”

    Source evidence

    Code amendment note
    Subsec. (c). Pub. L. 97–320 struck out subsec. (c) “Loans made to finance the construction of a building or buildings and having maturities of not to exceed sixty months where there is a valid and binding agreement entered into by a financially responsible lender or other party to advance the full amount of the bank’s loan upon completion of the building or buildings, and loans made to finance the construction of residential or farm buildings and having maturities of not to exceed sixty months, may be considered as real estate loans if the loans qualify under this section, or such loans may be classed as commercial loans whether or not secured by a mortgage or similar lien on the real estate upon which the building or buildings are being constructed, at the option of each national banking association that may have an interest in such loan: Provided, That no national banking association shall invest in, or be liable on, any such loans classed as commercial loans under this subsection in an aggregate amount in excess of 100 per centum of its actually paid-in and unimpaired capital plus 100 per centum of its unimpaired surplus fund.”

    Enacted provision · exact public law section
    (a) Section 24 of the Federal Reserve Act (12 U.S.C. 371) is amended to read as follows: “Sec. 24. “real estate loans (a) Any national banking association may make, arrange, purchase or sell loans or extensions of credit secured by liens on interests in real estate, subject to such terms, conditions, and limitations as may be prescribed by the Comptroller of the Currency by order, rule, or regulation. “(b) Notes representing loans made under this section to finance the construction of residential or farm buildings and having maturities not to exceed nine months shall be eligible for discount as commercial paper within the terms of the second paragraph of section 13 of the Federal Reserve Act if accompanied by a valid and 12 USC 82, 342–347, 347c, 372. binding agreement to advance the full amount of the loan upon the completion of the building entered into by an individual, partnership, association, or corporation acceptable to the discounting bank.”.

    Effective date note
    Pub. L. 97–320, title IV, § 403(c), Oct. 15, 1982, 96 Stat. 1511, provided that: “This section [amending this section and section 92 of this title] shall take effect upon the expiration of one hundred and eighty days after the date of its enactment [Oct. 15, 1982].”

24. 1982

    Garn-St Germain Depository Institutions Act of 1982

    Pub. L. 97–320 title IV § 403(a) · 96 Stat. 1469

    Redesignated · 12 U.S.C. § 371(d)

    Pub. L. 97–320 redesignated subsec. (d) as (b)

    Source evidence

    Code amendment note
    Subsec. (d). Pub. L. 97–320 redesignated subsec. (d) as (b).

    Enacted provision · exact public law section
    (a) Section 24 of the Federal Reserve Act (12 U.S.C. 371) is amended to read as follows: “Sec. 24. “real estate loans (a) Any national banking association may make, arrange, purchase or sell loans or extensions of credit secured by liens on interests in real estate, subject to such terms, conditions, and limitations as may be prescribed by the Comptroller of the Currency by order, rule, or regulation. “(b) Notes representing loans made under this section to finance the construction of residential or farm buildings and having maturities not to exceed nine months shall be eligible for discount as commercial paper within the terms of the second paragraph of section 13 of the Federal Reserve Act if accompanied by a valid and 12 USC 82, 342–347, 347c, 372. binding agreement to advance the full amount of the loan upon the completion of the building entered into by an individual, partnership, association, or corporation acceptable to the discounting bank.”.

    Effective date note
    Pub. L. 97–320, title IV, § 403(c), Oct. 15, 1982, 96 Stat. 1511, provided that: “This section [amending this section and section 92 of this title] shall take effect upon the expiration of one hundred and eighty days after the date of its enactment [Oct. 15, 1982].”

25. 1982

    Garn-St Germain Depository Institutions Act of 1982

    Pub. L. 97–320 title IV § 403(a) · 96 Stat. 1469

    Struck · 12 U.S.C. § 371(e)

    Pub. L. 97–320 struck out subsec. (e) “Loans made to any borrower (i) where the association looks for repayment by relying primarily on the borrower’s general credit standing and forecast of income, with or without other security, or (ii) secured by an assignment of rents under a lease, and where, in either case described in clause (i) or (ii) above, the association wishes to take a mortgage, deed of trust, or other instrument upon real estate (whether or not constituting a first lien) as a precaution against contingencies, and loans in which the Small Business Administration cooperates through agreements to participate on an immediate or deferred or guaranteed basis under the Small Business Act [15 U.S.C. 631 et seq.], shall not be considered as real estate loans within the meaning of this section but shall be classed as commercial loans.”

    Source evidence

    Code amendment note
    Subsec. (e). Pub. L. 97–320 struck out subsec. (e) “Loans made to any borrower (i) where the association looks for repayment by relying primarily on the borrower’s general credit standing and forecast of income, with or without other security, or (ii) secured by an assignment of rents under a lease, and where, in either case described in clause (i) or (ii) above, the association wishes to take a mortgage, deed of trust, or other instrument upon real estate (whether or not constituting a first lien) as a precaution against contingencies, and loans in which the Small Business Administration cooperates through agreements to participate on an immediate or deferred or guaranteed basis under the Small Business Act [15 U.S.C. 631 et seq.], shall not be considered as real estate loans within the meaning of this section but shall be classed as commercial loans.”

    Enacted provision · exact public law section
    (a) Section 24 of the Federal Reserve Act (12 U.S.C. 371) is amended to read as follows: “Sec. 24. “real estate loans (a) Any national banking association may make, arrange, purchase or sell loans or extensions of credit secured by liens on interests in real estate, subject to such terms, conditions, and limitations as may be prescribed by the Comptroller of the Currency by order, rule, or regulation. “(b) Notes representing loans made under this section to finance the construction of residential or farm buildings and having maturities not to exceed nine months shall be eligible for discount as commercial paper within the terms of the second paragraph of section 13 of the Federal Reserve Act if accompanied by a valid and 12 USC 82, 342–347, 347c, 372. binding agreement to advance the full amount of the loan upon the completion of the building entered into by an individual, partnership, association, or corporation acceptable to the discounting bank.”.

    Effective date note
    Pub. L. 97–320, title IV, § 403(c), Oct. 15, 1982, 96 Stat. 1511, provided that: “This section [amending this section and section 92 of this title] shall take effect upon the expiration of one hundred and eighty days after the date of its enactment [Oct. 15, 1982].”

26. 1982

    Garn-St Germain Depository Institutions Act of 1982

    Pub. L. 97–320 title IV § 403(a) · 96 Stat. 1469

    Struck · 12 U.S.C. § 371(f)

    Pub. L. 97–320 struck out subsec. (f) “Any national banking association may make loans upon the security of real estate that do not comply with the limitations and restrictions in this section, if the total unpaid amount loaned, exclusive of loans which subsequently comply with such limitations and restrictions, does not exceed 10 per centum of the amount that a national banking association may invest in real estate loans. The total unpaid amount so loaned shall be included in the aggregate sum that such association may invest in real estate loans.”

    Source evidence

    Code amendment note
    Subsec. (f). Pub. L. 97–320 struck out subsec. (f) “Any national banking association may make loans upon the security of real estate that do not comply with the limitations and restrictions in this section, if the total unpaid amount loaned, exclusive of loans which subsequently comply with such limitations and restrictions, does not exceed 10 per centum of the amount that a national banking association may invest in real estate loans. The total unpaid amount so loaned shall be included in the aggregate sum that such association may invest in real estate loans.”

    Enacted provision · exact public law section
    (a) Section 24 of the Federal Reserve Act (12 U.S.C. 371) is amended to read as follows: “Sec. 24. “real estate loans (a) Any national banking association may make, arrange, purchase or sell loans or extensions of credit secured by liens on interests in real estate, subject to such terms, conditions, and limitations as may be prescribed by the Comptroller of the Currency by order, rule, or regulation. “(b) Notes representing loans made under this section to finance the construction of residential or farm buildings and having maturities not to exceed nine months shall be eligible for discount as commercial paper within the terms of the second paragraph of section 13 of the Federal Reserve Act if accompanied by a valid and 12 USC 82, 342–347, 347c, 372. binding agreement to advance the full amount of the loan upon the completion of the building entered into by an individual, partnership, association, or corporation acceptable to the discounting bank.”.

    Effective date note
    Pub. L. 97–320, title IV, § 403(c), Oct. 15, 1982, 96 Stat. 1511, provided that: “This section [amending this section and section 92 of this title] shall take effect upon the expiration of one hundred and eighty days after the date of its enactment [Oct. 15, 1982].”

27. 1982

    Garn-St Germain Depository Institutions Act of 1982

    Pub. L. 97–320 title IV § 403(a) · 96 Stat. 1469

    Struck · 12 U.S.C. § 371(g)

    Pub. L. 97–320 struck out subsec. (g) “Loans made pursuant to this section shall be subject to such conditions and limitations as the Comptroller of the Currency may prescribe by rule or regulation.”

    Source evidence

    Code amendment note
    Subsec. (g). Pub. L. 97–320 struck out subsec. (g) “Loans made pursuant to this section shall be subject to such conditions and limitations as the Comptroller of the Currency may prescribe by rule or regulation.”

    Enacted provision · exact public law section
    (a) Section 24 of the Federal Reserve Act (12 U.S.C. 371) is amended to read as follows: “Sec. 24. “real estate loans (a) Any national banking association may make, arrange, purchase or sell loans or extensions of credit secured by liens on interests in real estate, subject to such terms, conditions, and limitations as may be prescribed by the Comptroller of the Currency by order, rule, or regulation. “(b) Notes representing loans made under this section to finance the construction of residential or farm buildings and having maturities not to exceed nine months shall be eligible for discount as commercial paper within the terms of the second paragraph of section 13 of the Federal Reserve Act if accompanied by a valid and 12 USC 82, 342–347, 347c, 372. binding agreement to advance the full amount of the loan upon the completion of the building entered into by an individual, partnership, association, or corporation acceptable to the discounting bank.”.

    Effective date note
    Pub. L. 97–320, title IV, § 403(c), Oct. 15, 1982, 96 Stat. 1511, provided that: “This section [amending this section and section 92 of this title] shall take effect upon the expiration of one hundred and eighty days after the date of its enactment [Oct. 15, 1982].”

28. 1991

    Federal Deposit Insurance Corporation Improvement Act of 1991

    Pub. L. 102–242 title III § 304(b) · 105 Stat. 2236

    Substituted · 12 U.S.C. § 371(a)

    Pub. L. 102–242 substituted “section 1828(o) of this title and such restrictions and requirements as the Comptroller of the Currency may prescribe by regulation or order” for “such terms, conditions, and limitations as may be prescribed by the Comptroller of the Currency by order, rule, or regulation”

    Source evidence

    Code amendment note
    Subsec. (a). Pub. L. 102–242 substituted “section 1828(o) of this title and such restrictions and requirements as the Comptroller of the Currency may prescribe by regulation or order” for “such terms, conditions, and limitations as may be prescribed by the Comptroller of the Currency by order, rule, or regulation”.

    Enacted provision · exact public law section
    (b) Conforming Amendment.— Section 24(a) of the Federal Reserve Act (12 U.S.C. 371(a)) is amended by striking “such terms,” and all that follows through the period and inserting “section 18(o) of the Federal Deposit Insurance Act and such restrictions and requirements as the Comptroller of the Currency may prescribe by regulation or order.”.

34 of 38 references resolved to an enrolled provision · 4 partial