This bill proposes amendments to existing banking laws, specifically regarding lending limits and the organization of state banks. It raises the maximum amount a bank can loan to a single borrower by allowing a depository bank to lend up to 20 percent of its capital, or the limit prescribed for national banks under federal law, whichever is greater. Additionally, banks may lend an extra 5 percent of their capital, up to a maximum of 25 percent, provided that the excess amount is fully secured by U.S. obligations of equivalent value.

Furthermore, the bill shortens the de novo status period for new banks from five years to three years, affecting the timeline for banks to submit applications for material changes in their business plans or capital plans. The amendments also require that the capital and business plans for new banks be adjusted to reflect this three-year period instead of five. The changes aim to streamline the process for new banks and enhance their lending capabilities while ensuring prudent lending practices are maintained. The act will take effect 60 days after its passage.

Statutes affected:
Introduced: 383-A:3-305, 383-A:3-318, 383-B:3-303