Current through Register Vol. 39, No. 6, September 16, 2024
(a) Each bank shall
establish and maintain loan documentation practices that include the following:
(1) enable the institution to make an
informed lending decision and to assess risk, as necessary on an ongoing
basis;
(2) identify the purpose of
a loan and the source of repayment, and assess the ability of the borrower to
repay the indebtedness in a timely manner;
(3) ensure that any claim against a borrower
is legally enforceable;
(4)
demonstrate appropriate administration and monitoring of a loan; and
(5) take account of the size and complexity
of a loan.
Loan documentation practices shall comply with the
requirements of the Interagency Guidelines Establishing Standards for Safety
and Soundness, 12 C.F.R. Part 364 Appendix A, as applied by the Federal Deposit
Insurance Corporation or the Federal Reserve System, which are hereby
incorporated by reference including subsequent amendments or additions. This
information is available at https://www.ecfr.gov/at no cost.
(b) Each bank shall
maintain on file the following loan documentation:
(1) Certificate of Title. A title opinion
furnished by an attorney at law, a title report, a title insurance policy
issued by a company licensed by the Commissioner of Insurance, or other
insurance coverage that provides the bank similar protection against loss from
title defects, errors, or omissions at closing, or related risks, shall be
obtained in connection with each deed of trust or mortgage given as security on
each real estate-secured loan when:
(A) the
loan is primarily secured by real property and only secondarily by the
borrower's general credit-worthiness; and
(B) the amount of the loan secured by the
real property is one hundred thousand dollars ($100,000) or more.
(2) Corporate Resolutions. A loan
made to a corporation shall be supported by a certified copy of a resolution of
the board of directors of the corporation, authorizing the loan
transaction.
(3) Partnership
Declaration. A loan made to a partnership shall be supported by a declaration
of the general partners showing the composition of the partnership and unless
all partners sign the note, the authority of the partner(s) executing the note
to bind the partnership.
(4)
Limited Liability Company Certification. A loan made to a limited liability
company shall be supported by a certification of a manager thereof that the
loan has been duly authorized by the limited liability company.
(5) Unlisted Securities Held as Collateral.
Full credit information on all unlisted securities shall be kept on file in the
bank.
Authority
G.S.
53C-6-1;
53C-8-1;
Eff.
February 1, 1976;
Amended Eff. October 1, 2014; December 1, 2011;
April 1, 2007; June 1, 1995; May 1, 1992; September 1, 1990; September 1,
1983;
Pursuant to
G.S.
150B-21.3A, rule is necessary without
substantive public interest Eff. October 3, 2017;
Amended April 1,
2018.
