Chap. 98.—An ACT to amend and re-enact section 48 of an act entitled an act to
revise, collate and codify into one act the general statutes of the Common-
wealth relating to banks and banking, which act shall constitute and be desig-
nated and cited as the Virginia banking act, and to repeal all Code sections
and all acts and parts of acts inconsistent therewith, and to provide penalties
for the violations thereof, approved March 27, 1928. [H B 64]

Approved March 5, 1932

1. Be it enacted by the general assembly of Virginia, That section
forty-eight of an act entitled an act to revise, collate and codify into
one act the general statutes of the Commonwealth relating to banks
and banking, which act shall constitute and be designated and cited
as the Virginia banking act, and to repeal all Code sections and all
acts and parts of acts inconsistent therewith, and to provide penalties
for the violations thereof, approved March twenty-seventh, nineteen
hundred and twenty-eight, be amended and re-enacted so as to read
as follows:

Section 48. Limit of liability of borrowers; loans on stock.—The
total liabilities of any person, partnership or corporation to any bank,
including the liabilities of the co-partnership, and the liabilities of the
several members thereof, except special partners, shall at no time ex-
ceed fifteen per centum of the capital and permanent surplus of such

bank. Provided, that such limitation of fifteen per centum shall be
subject to the following exceptions:

(1) Obligations in the form of drafts or bills of exchange drawn
in good faith against actually existing values shall not be subject
under this section to any limitation based upon such capital and
surplus.

(2) Obligations arising out of the discount of commercial or
business paper actually owned by the person, co-partnership, associa-
tion, or corporation negotiating the same shall not be subject under
this section to any limitation based upon such capital and surplus.

(3) Obligations drawn in good faith against actually existing
values and secured by goods or commodities in process of shipment
shall not be subject under this section to any limitation based upon
such capital and surplus.

(4) Obligations as indorser or guarantor of notes, other than
commercial or business paper excepted under (two) hereof, having a
maturity of not more than six months, and owned by the person, cor-
poration, association, or co-partnership indorsing and negotiating the
same, shall be subject under this section to a limitation of fifteen per
centum-of such capital and surplus in addition to such ECPM per cen-
tum of such capital and surplus.
(5) Obligations in the form of banker’s acceptances of other banks
of the kind described in section thirteen of the federal reserve act
shall not be subject under this section to any limitation based upon
such capital and surplus.

(6) Obligations of any person, co-partnership, association or cor-
poration, in the form of notes or drafts secured by shipping docu-
ments, warehouse receipts or other such documents transferring or
securing title covering readily marketable non-perishable staples when
such property is fully covered by insurance, if it is customary to insure
such staples, shall be subject under this section to a limitation of fif-
teen per centum of such capital and surplus in addition to such fifteen
per centum of such capital and surplus when the market value of such
staples securing such obligation is not at any time less than one hun-
dred and fifteen per centum of the face amount of such obligation, and
to an additional increase of limitation of five per centum of such cap-
ital surplus in addition to such thirty per centum of such capital and
surplus when the market value of such staples securing such addi-
tional obligation is not at any time less than one hundred and twenty
per centum of the face amount of such additional obligation, and to a
further additional increase of limitation of five per centum of such
capital and surplus in addition to such thirty-five per centum of such
capital and surplus when the market value of such staples securing
such additional obligation is not at any time less than one hundred
and twenty-five per centum of the face amount of such additional ob-
ligation, and to a further additional increase of limitation of five per
centum of such capital and surplus in addition to such forty per cen-
tum* of such capital and surplus when the market value of such
staples securing such additional obligation is not at any time less than
one hundred and thirty per centum of the face amount of such addi-
tional obligation, and to a further additional increase of limitation of
five per centum of such capital and surplus in addition to such forty-
five per centum of such capital and surplus when the market value of
such staples securing such additional obligation is not at any time less
than one hundred and thirty-five per centum of the face amount of
such additional obligation, and to a further additional increase of lim1-
tation of five per centum of such capital and surplus in addition to
such fifty per centum of such capital and surplus when the market
value of such staples securing such additional obligation is not at
any time less than one hundred and forty per centum of the face
amount of such additional obligation, but this exception shall not ap-
ply to obligations of any one person, co-partnership, association or
corporation arising from the same transactions and/or secured upon
the identical staples for more than ten months.

(7) Obligations of any person, copartnership, association, or
corporation in the form of notes or drafts secured by shipping docu-
ments or instruments transferring or securing title covering livestock
or giving a lien on livestock when the market value of the livestock
securing the obligation is not at any time less than one hundred and
fifteen per centum of the face amount of-the notes covered by such doc-
uments shall be subject under this section to a limitation of fifteen per
centum of such capital surplus in addition to such fifteen per centum
of such capital and surplus.

(8) Obligations of any person, copartnership, association, or cor-
poration in the form of notes secured by not less than a like amount
of bonds or notes of the United States, or bonds of the State of Vir-
ginia, shall be subject under this section to a limitation of fifteen
per centum of such capital and surplus, in addition to such fifteen per
centum of such capital and surplus.

No loan shall be made by any bank on the security of shares of
stock in such bank. All loans of every character, in excess of fifteen
per centum of the capital and permanent surplus of any bank shall be
approved by a majority of the board of directors, or by the executive
committee of said board, approved by a majority of such executive
committee, by resolution which shall be recorded in the minutes of
said board or committee, and signed by the directors present and
consenting thereto.

The validity of loans previously made in accordance with the pro-
visions of this section prior to the amendment shall not be affected
by this amendment, and such loans may from time to time be renewed,
provided such loans shall be reduced or collected in full, as the case
may be, as soon as reasonably possible, so as to conform to the pro-
visions of this section.