N.D. Admin Code 13-02-09-03 - Liabilities of a borrower
1. Standby letters
of credit must be included in determining the total direct, indirect, or
contingent liability of a borrower who is a beneficiary of the standby letter
of credit.
2. The obligations of a
general partnership must be included in determining the total direct, indirect,
or contingent liability of each general partner of the partnership.
3. The obligations of a limited partnership
must be included, to the extent of each limited partner's share of ownership of
the limited partnership, in determining the total direct, indirect, or
contingent liability of each limited partner of the limited partnership, if one
of the conditions of subsection 4 of section 13-02-09-04 exists. The entire
obligation of a limited partnership must be included in determining the total
direct, indirect, or contingent liability of the general partner of a limited
partnership.
4. An extension of
credit to a borrower which is participated in by the banking association to a
third party with recourse must be included in determining the total direct,
indirect, or contingent liability of that borrower.
5. If an extension of credit is secured by a
pledged certificate of deposit drawn on the lending bank and payable to the
borrower, the face value of the certificate of deposit or the borrower's
obligation secured by the certificate of deposit, whichever is less, may not be
considered in determining the total liability of a borrower.
6. If an extension of credit which is
transferred by the banking association to a third party without recourse fails
to comply with applicable call report instructions to be treated as a sale, the
extension of credit must be considered in determining the total direct,
indirect, or contingent liability of that borrower. Transfers that do not meet
the conditions for sale treatment must be accounted for according to prevailing
call report instructions.
Notes
General Authority: NDCC 6-01-04
Law Implemented: NDCC 6-03-59
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