This section does not apply to: Any readily marketable bond or like obligation that is held by a commercial bank as an investment; Any loan that is made to this State or to a political subdivision and that matures in less than 1 year; Any loan of $3,500 or less, unless that loan exceeds 20 percent of the unimpaired capital and surplus of the commercial bank; or Any liability lawfully incurred before June 1, 1937. The total of all liabilities of any one person to a commercial bank, including all liabilities referred to in this section, may not exceed at any time 30 percent of the unimpaired capital and surplus of the commercial bank. In this subsection, “loan”: Includes an obligation under a standby letter of credit; and Does not include any discount or obligation that is subject to subsection (d) or (e) of this section. The total liability of any one person to a commercial bank for loans may not exceed at any time: 10 percent of the unimpaired capital and surplus of the commercial bank; or 30 percent of the unimpaired capital and surplus of the commercial bank if the excess over 10 percent is approved by a two-thirds vote of the board of directors and is secured by currency or obligations of the United States or obligations of this State or any political subdivision. In this subsection, “commercial paper” means any commercial paper issued in connection with a commercial transaction or any chattel paper, if the person negotiating the commercial paper or chattel paper owns it. The total liability of any one person to a commercial bank for discounts of commercial paper may not exceed at any time 25 percent of the unimpaired capital and surplus of the commercial bank. In this subsection, “obligations secured by goods” means obligations that are drawn in good faith against actual existing values and are: Secured by goods in the process of shipment; or When accepted, accompanied by documents of title for these goods. The total liability of any one person to a commercial bank for obligations secured by goods may not exceed at any time 25 percent of the unimpaired capital and surplus of the commercial bank. For purposes of this section, the rules set forth in subsections (g) through (j) of this section apply in computing the total liabilities of any one person to a commercial bank. Except as provided in paragraph (2) of this subsection, the total liabilities of any individual to a commercial bank include: All liabilities to the commercial bank of any partnership or unincorporated association of which the individual is a member; and All loans that the commercial bank makes for the benefit of the individual or for the benefit of any partnership or unincorporated association of which the individual is a member. If the individual holds only a limited interest in a limited partnership, the liabilities of the limited partnership and the loans made for its benefit that are included in the individual’s total liabilities may not exceed the value of the individual’s interest in the limited partnership. The total liabilities of any partnership or unincorporated association to a commercial bank include: All liabilities of its individual members to the commercial bank; and All loans that the commercial bank makes for the benefit of the partnership or association or for the benefit of any member of the partnership or association. The total liabilities of any corporation to a commercial bank include all loans that the commercial bank makes for the benefit of the corporation. For purposes of this section, a loan is considered to be made for the benefit of a corporation, partnership, or unincorporated association to the extent that the proceeds of the loan are transferred to the corporation, partnership, or association. For purposes of this section, “unimpaired surplus” of a commercial bank includes surplus, retained earnings, and 100 percent of the reserve for possible loan losses.

A commercial bank may accept for payment at a later date a draft issued in connection with a transaction that involves the importation, exportation, or domestic shipment of goods, if the draft: Is payable not more than 6 months after the date of acceptance; and When accepted, is accompanied by a document of title. A commercial bank may accept a draft that a bank or banker in any foreign country or any possession or territory of the United States draws on the commercial bank to provide dollar exchange required by trade usage in the foreign country, possession, or territory if: The draft is payable not more than 3 months after the date of acceptance; The amount of the exchange does not exceed 50 percent of the unimpaired capital and surplus of the commercial bank; and For any exchange that exceeds 10 percent of the unimpaired capital and surplus of the commercial bank, the draft is accompanied by a document of title or other adequate security.

This section does not apply to a leasehold interest in real property. Subject to the rules and regulations of the Commissioner, a commercial bank may become the owner and lessor of personal property if: The personal property is acquired on the specific request of and for the use of a customer; and The investment of the commercial bank in personal property does not exceed: For any one customer, 10 percent of the unimpaired capital and surplus of the commercial bank; and For all of its customers, the total of its unimpaired capital and surplus.

An officer, employee, or agent of a commercial bank may not certify any draft drawn on the commercial bank unless the drawer has on deposit an amount equal to at least the amount of the draft. If a draft is certified in violation of this section by a person who is authorized to certify drafts, it is a valid obligation of the commercial bank.

In this section the following words have the meanings indicated. “Demand deposit” means a deposit that is payable within 30 days. “Time deposit” means a deposit that is payable after 30 days. “Time deposit” includes a savings account or certificate of deposit that requires at least a 30–day notice before payment. This section does not apply to any deposit of public funds for which the commercial bank pledges collateral. A commercial bank shall have at all times a reserve equal to at least 15 percent of its demand deposits. The board of directors of a commercial bank by resolution shall direct the commercial bank to keep the demand deposit reserve required by this section in: Cash on hand; Demand deposits in a bank of good standing in any state; or As to 5 percent of its demand deposits, on approval of the Commissioner: Registered or coupon bonds; or General obligations of or obligations guaranteed by the United States government, an agency of the United States government, this State, or any political subdivision. A commercial bank shall have at all times a reserve equal to at least 3 percent of its time deposits. The board of directors of a commercial bank by resolution shall direct the commercial bank to keep the time deposit reserves required by this section in: Cash on hand; Deposits in a bank of good standing in any state; or Direct obligations of the United States government or of this State. If the Commissioner determines that a change in the demand deposit reserve or in the time deposit reserve requirements is advisable to maintain sound banking practices or to prevent injurious credit expansion or contraction, the Commissioner may change the requirements as provided in this subsection. Subject to paragraph (3) of this subsection, the Commissioner may adopt rules or regulations to change the requirements as to reserves for commercial banks. The rules and regulations may: Increase the demand deposit reserve to an amount equal to not more than 30 percent of those deposits; Increase the time deposit reserve to an amount equal to not more than 6 percent of those deposits; Decrease the demand deposit reserve to an amount equal to not less than 15 percent of those deposits; Decrease the time deposit reserve to an amount equal to not less than 3 percent of those deposits; and Notwithstanding items (i) through (iv) of this paragraph, increase or decrease the demand deposit reserve or time deposit reserve to conform to the reserve requirements that apply to a member bank of the Federal Reserve System.