Jamie Johnson is a sought-after personal finance writer with signatures on prestigious personal finance sites such as Quicken Loans, Credit Karma, and The Balance. Over the past five years, she has devoted more than 10,000 hours of research and writing on topics such as mortgages, loans and small business loans. 32.1 Authority, Purpose and Scope. 32.2 Definitions. 32.3 Credit Limits. 32.4 Calculation of Credit Limit. 32.5 Combination Rules. 32.6 Non-compliant appropriations. 32.7 Residential real estate loans, small business loans and small farm loans. 32.8 Emergency Temporary Funding Arrangements. 32.9 Credit risks arising from derivatives and securities financing transactions.
Appendix A to Part 32Interpretations. Tier 3 capital is the additional capital that banks hold to support their minimum capital requirements. It includes a wider variety of short-term debt than either of the first two levels. Examples of loans with special credit limits are loans secured by bills of lading, inventory receipts and certain other loans. (c) loans that are not subject to credit limits. The following loans or loan renewals are not subject to the credit limits of 12 U.S.C. 84 or 12 U.S.C. 1464(u) of this Part. Commentators also addressed the application of the credit limit rule to an institution`s contributions to a CCP`s guarantee fund. Some commentators have stated that the credit limit rule should apply to these contributions, as they are equivalent to the lines of credit promised. Others argued that the rule should not apply or that its application should be tailor-made. The former credit limit rule for savings associations, Section 160.93(a), excluded consolidated lending by savings banks and their subsidiaries under generally accepted accounting principles (GAAP consolidated subsidiaries) to all subordinate organizations and affiliated savings banks.
The rules applicable in these situations are set out in Part 159. In particular, Section 159.5(b) sets credit limits on loans from a Federal Savings Association and its consolidated GAAP subsidiaries to non-consolidated subsidiaries. Paragraph 159.5(b) did not establish a specific credit limit for GAAP loans to consolidated subsidiaries, but provided that such a limit could be set if justified for reasons of safety and soundness. 14. 12 CFR Part 3, Appendix C, Section 53 for national banks; 12 CFR Part 167, Appendix C, Section 53 for federal savings banks; and 12 CFR 390, subsection Z, Appendix A, section 53 for government savings associations. (11) Credit risks arising from financing operations for certain government bonds. credit risks arising from SFTs where the securities financed are Type I securities within the meaning of 12 CFR 1.2(j) in the case of domestic banks or securities listed in Section 5(c)(1)(C), (D), (E) and (F) of HOLA, and the general obligations of a State or subdivision under Section 5(c)(1)(H) of HOLA; 12 U.S.C. 1464(C)(1)(C), (D), (E), (F), and (H) in the case of savings associations. (t) The qualified loan commitment is a legally binding written loan commitment which, in combination with all other outstanding loans and qualified commitments to a borrower, was within the credit limit of the National Bank or savings association at the time of conclusion and has not been disqualified. In the case of SFTs, the calculation of credit risk using the non-standard methodology of the provisional final schedule shall be based on the nature of the HST concerned.