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Can you summarize SDCL Chapter 51A-12?
BANKS AND BANKING > Bank Loans
Short Summary
These legal documents cover various aspects of bank loans and credit service charges in South Dakota. Banks are allowed to compound interest or service fees on loans when disclosed in writing to the borrower. They have the right to offset loan balances owed by a customer against the bank’s obligations to the customer in the form of deposits. Banks can contract for and collect various credit service charges, including membership fees, transaction fees, interest charges, and charges related to revolving loan or charge account arrangements. Certain portions of loans, such as those secured by certificates of deposit, time savings certificates, or obligations backed by the full faith and credit of the United States, are excluded when determining loan limits. The issuing officer, chief executive, managing officer, and board of directors of a bank can be held personally liable for excessive loans. There are limitations on loans to executive officers, directors, shareholders, partnerships, and corporations. Derivative transactions and certain credit exposures are considered loans for the purpose of loan or credit limitations. Exceptions to loan or credit limitations can be granted by the director for agricultural operating loans. State-chartered banks can apply for exceptions to loan or credit limitations if certain conditions are met. Banks are prohibited from lending an amount greater than a specified percentage of their capital stock, members’ equity, surplus, and undivided profit. These documents do not mention specific penalties for non-compliance or violation of their provisions.
Whom does it apply to?
Banks, customers, executive officers, directors, shareholders, corporations, partnerships, individuals
What does it govern?
Bank loans, credit service charges, loan limits, loan or credit limitations, exceptions to loan or credit limitations, personal and real property security interests, derivative transactions, agricultural operating loans, state chartered banks
What are exemptions?
Loans secured by certificates of deposit, time savings certificates, prior evidence of obligation from the bank to the borrower, loans secured by bonds, notes, certificates of indebtedness, treasury bills of the United States, obligations backed by the full faith and credit of any department, agency, bureau, board, commission, establishment of the United States, or any corporation owned directly or indirectly by the United States, loans secured by unconditional takeout commitments or guarantees from the state of South Dakota, the United States, or any corporation owned directly or indirectly by the United States, nonrisk and government guaranteed loans
What are the Penalties?
No penalties are mentioned in these documents.
Jurisdiction
South Dakota