Loans

(b) The term of the loan must not exceed five years.
(c) The aggregate amount of this class of loans, including in the aggregate any
such loans on which the bank is liable as endorser, or guarantor, or otherwise,
 is limited to 25 per cent of the bank’s (paid up and unimpaired)
capital and (unimpaired) surplus, or to 50 per cent of its savings deposits,
subject to the general limitation that not more than 10 per cent of the
amount of the bank’s capital and surplus may be loaned to any single
customer (see section 8 below).

2. To Bank Examiners—It is unlawful for a national bank or any
of its officers, directors, or employees to make any loan or grant any
gratuity to a bank examiner.

3. Limitation to one Person, Company, ete.—The total obligations to
any national bank of any person, copartnership, association, or
Corporation (or to the several members of a copartnership or association)
 shall not at any time exceed 109, of the amount of the capital
stock of the bank, actually paid in and unimpaired, and 109, of its
unimpaired surplus funds. The term “obligations” is defined as,
“the direct liability of the maker or acceptor of paper discounted
With or sold to the bank and the liability of the endorser, drawer, or
guarantor who obtains a loan from or discounts paper with or sells
Paper under his guaranty” to the bank. In the following cases,
however, the limitation of 10 percent shall not apply:

(a) Discount of bills of exchange drawn in good faith against actual existing
values are not subject to any limitation based on capital and surplus.

(b) Discount of commercial or business paper actually owned by the person,
copartnership, association, or corporation negotiating such paper are not
subject to any limitation based on capital and surplus.
‘c) Obligations drawn in good faith against actually existing values and secured
by goods or commodities in process of shipment are not subject to any
limitation based upon capital and surplus.

Obligations as indorser or guarantor of notes, other than commercial or
business paper excepted under (b) hereof, having a maturity of not more
than six months, and owned by the person, corporation, association, or
copartnership indorsing and negotiating the same, are subject to a limitation
of 15 per centum of the bank’s capital and surplus in addition to 10 per
centum of its capital and surplus.”

©) Obligations in the form of banker's acceptances of other banks of the kind
described in section 18 of the Federal Reserve Act are not subject under this

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