Chap. 263.—An ACT to amend and re-enact former Section 49-a 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 27, 1928, as renumbered
as Section 48-a and amended by act, approved March 7, 1938, relating to the
power of banks to make loans secured by real estate. [S B 211]

Approved March 27, 1940

1. Be it enacted by the General Assembly of Virginia, That
section forty-nine-a of an act entitled “‘an act to revise, collate and
codify into one act the General Statutes of the Commonwealth re-
lating 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 twenty-
seventh, nineteen hundred and twenty-eight, as renumbered as section
forty-eight-a and amended by act, approved March seventh, nineteen
hundred and thirty-eight, be amended and re-enacted so as to read
as follows:

Section 48-a. No bank shall make any loan secured by real
estate when such loan together with all prior liens and encumbrances
on such real estate exceeds fifty per centum of the appraised value
of the real estate offered as security unless such loan be for a term
not longer than fifteen years and be secured by an amortized mort-
gage, deed of trust or other instrument under the terms of which the
annual installment payments are not less than four per centum per
annum of the principal of the loan when such loan is for a period
not more than ten years, or not less than five per centum per annum
of the principal of the loan when such loan is for a period in excess
of ten years but not more than fifteen years, in neither of which
events shall the amount of the loan, together with all prior liens and
encumbrances on such real estate exceed sixty per centum of the
appraised value of the real estate offered as security, nor shall any
bank make such loans in an aggregate sum in excess of the amount
of its capital stock actually paid in and unimpaired plus the amount
of its unimpaired surplus fund, or in excess of sixty per centum of
the amount of its time and savings deposits at the election of the
bank; provided, that any such bank may, with the written consent
and approval of the State Corporation Commission, make such loans
in an aggregate amount up to, but not in excess of, seventy per centum
of the amount of its time and savings deposits. A loan secured solely
by a mortgage, deed of trust, or other such instrument upon real
estate, or by notes or other obligations which are so secured, shall,
for the purposes of this section, be a loan secured by real estate; a
loan secured in part by a mortgage, deed of trust, or other such in-
strument upon real estate, or by notes or other obligations which are
so secured, and by any other form of security, shall for the purposes
of this section, be a loan secured by real estate to the extent, but
only to the extent, of the value of the real estate security determined
as herein provided and permitted. The appraisals herein required,
if and when the loan shall exceed five hundred dollars, shall be made
by appraisers appointed by the board of directors, shall be in writing,
signed by the appraisers and shall be retained in the files of the bank
subject to examination by the bank examiners.

The provisions of this section shall not be construed to prohibit
any bank from renewing from time to time any such loans heretofore
made not in conformity herewith, provided such loans shall be re-
duced as soon as reasonably possible so as to conform to the require-
ments of this section, or to prohibit any bank from accepting as
security for a loan heretofore or hereafter made in good faith without
security or upon security since found to be inadequate, a mortgage,
deed of trust, or other such instrument upon real estate, or notes or
other obligations, which are so secured, nor shall the limits set forth
in this section apply to loans in which Reconstruction Finance Corpora-
tion, the RFC Mortgage Company, a Federal Reserve Bank, or any
of them, has definitely agreed or committed itself to participate,
and/or purchase, nor to loans secured by mortgage, or deed of trust
which are insured by the Federal Housing Administrator under the
provisions of the National Housing Act, provided, however, that no
bank shall make any loan under the provisions of Title I, Class Three
of the National Housing Act, except as herein otherwise provided,
unless at the time such loan is made, there is to the credit of said
lending bank with the Federal Housing Administrator, available and
applicable to such loan in the event of loss, an insurance reserve fund
accumulated for the protection of all classes of loans theretofore
made pursuant to the provisions of Title I of the National Housing
Act equal to at least twenty-five per centum of the amortized face
amount of all Title I, Class Three loans held by said lending bank,
including the face amount of such new or additional Title I, Class
Three loans proposed to be made.

2. An emergency existing, this act shall be in force from its
passage.