Code of Colorado Regulations
700 - Department of Regulatory Agencies
703 - Division of Financial Services
3 CCR 703-1 - RULES AND REGULATIONS OF THE COLORADO DIVISION OF FINANCIAL SERVICES PERTAINING TO SAVINGS AND LOAN ASSOCIATIONS
Section 11 - LETTERS OF CREDIT
Universal Citation: 3 CO Code Regs 703-1 ยง 11
Current through Register Vol. 47, No. 17, September 10, 2024
11-1. An association may issue commercial and standby letters of credit in conformance with the Uniform Commercial Code and may pledge collateral to secure its obligations thereunder, subject to the following requirements:
(a) Each letter of credit must conspicuously
state that it is a letter of credit.
(b) The issuer's undertaking must contain a
specified expiration date or be for a definite term and must be limited in
amount.
(c) The issuer's obligation
to pay must be solely dependent upon the presentation of conforming documents
as specified in the letter of credit, and not upon the factual performance or
nonperformance by the parties to the underlying transaction.
(d) The account party must have an
unqualified obligation to reimburse the issuer for payments made under the
letter of credit.
11-2. To the extent funds are advanced under a letter of credit without compensation from the account party, the amount shall be treated as an extension of credit subject to percentage-of-assets limits and other requirements under applicable provisions of state law.
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