Ask Reggi Your Question Now
Can you summarize NJAC 3:11-13.1?
OFFICERS AND DIRECTORS RESTRICTIONS > Borrowing limitation of a director, executive officer and/or related interests
Short Summary
This legal document, found in the New Jersey Administrative Code under the section on Investments, specifically addresses the borrowing limitation of directors, executive officers, and related interests in the banking industry. It states that a bank may extend credit to a director or to a corporation in which such director or an executive officer has a controlling interest, or to a partnership in which such director or executive officer is a partner, as long as the proposed liability does not cause the total liabilities of the director or executive officer, and the liabilities of each corporation and partnership in which they have a controlling interest, to exceed 25 percent of the bank’s capital funds. However, any amounts exceeding 15 percent of the capital funds must be fully secured by readily marketable collateral. The document also mentions that the maximum liability of an executive officer, excluding corporate and partnership liabilities, is limited as specified in another rule. The effective date of this rule is September 8, 1987.
Whom does it apply to?
Directors, executive officers, corporations, partnerships, and banks
What does it govern?
Borrowing limitation of a director, executive officer, and/or related interests
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No penalties are mentioned.
Jurisdiction
New Jersey