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(a) For purposes of determining compliance with the loan lending limits in AS 06.05.205 , the department will consider a loan fully secured if the fair market value of the collateral for the loan exceeds the total principal, interest, and other charges owed to or incurred by the bank on the loan.
(b) For purposes of calculating the maximum amount that may be loaned to one borrower under AS 06.05.205 (b), the "total capital accounts of the bank" must include the bank's capital accounts plus its loan loss reserves.
(c) A loan made to one borrower must be attributed to and combined with loans to another, for purposes of the lending limits in AS 06.05.205 (b), when
(1) the proceeds of the loan to one borrower are to be used for the direct benefit of the other;
(2) the expected source of repayment of the loans is the same;
(3) there is substantial financial interdependence between the two borrowers, including where a majority of one's income is derived from sales or other transactions with the other; or
(4) the proceeds of the loans to each person will be used to purchase a business enterprise in which the borrowers will have a majority interest.
(d) A loan made to a partnership, joint venture, or association must be considered a loan, under AS 06.05.205 (b), to each member of that entity who may be held liable for the debts of the entity.
History: Eff. 5/2/84, Register 90; am 1/10/94, Register 129
Authority: AS 06.01.020
AS 06.05.005 (a)
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Last modified 7/05/2006