S.P. 595 - L.D. 1719
An Act to Amend the Maine Banking Code Regarding Extensions of Credit
Emergency preamble. Whereas, Acts of the Legislature do not become effective until 90 days after adjournment unless enacted as emergencies; and
Whereas, without the proposed change, Maine-based lenders may suffer competitive losses to out-of-state financial corporations; and
Whereas, Maine companies that would prefer to do business with local lenders are forced to use other financial organizations; and
Whereas, Maine lenders are ready and able to serve these Maine businesses but for the restraints resulting from the current Maine banking law; and
Whereas, this current Maine banking law was passed prior to Maine's many recent banking code changes regarding interstate banking; and
Whereas, this legislation would amend Maine law so that Maine's Superintendent of Banking may waive certain requirements that predate these changes to Maine's banking code; and
Whereas, without this legislation Maine-based lenders would continue to see loan business move to out-of-state financial organizations; and
Whereas, in the judgment of the Legislature, these facts create an emergency within the meaning of the Constitution of Maine and require the following legislation as immediately necessary for the preservation of the public peace, health and safety; now, therefore,
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 9-B MRSA §439-A, sub-§2, as amended by PL 1997, c. 398, Pt. I, §25, is further amended to read:
2. Limitations. A financial institution subject to this Title or a service corporation established pursuant to section 445 may not make loans or extensions of credit outstanding at one time to a person in excess of 20% of its total capital. Total Except as provided in paragraph A, total loans or other extensions of credit in excess of 10% of total capital must be approved by a majority of the governing body or the executive committee of that institution or corporation. Any loan made in violation of this section is subject to the remedies prescribed in section 465-A.
A. The superintendent may grant a partial or full waiver of the voting requirement for loans or other extensions of credit in excess of 10% of total capital for good cause shown. In granting this waiver, the superintendent shall consider capital, management and resources of the financial institution or other relevant factors as determined by the superintendent.
B. Any waiver granted pursuant to paragraph A may be withdrawn by the superintendent upon written notice to the financial institution.
Emergency clause. In view of the emergency cited in the preamble, this Act takes effect when approved.
Effective May 17, 1999.
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