Chap. 444.-An ACT to amend and re-enact Section 48-a of Chapter 507 of the
Acts of the General Assembly of 1928, approved March 27, 1928, as amended
by Chapter 263, Acts 1940, approved March 27, 1940, known and cited as the
Virginia Banking Act, relating to the limitation on amount of loans made upon
real estate security. [H B 484]

Approved April 6, 1942

1. Beit enacted by the General Assembly of Virginia, That section
forty-eight-a of chapter five hundred and seven of the Acts of the General
Assembly of Virginia of nineteen hundred and twenty-eight, as amended
by chapter two hundred and sixty-three, Acts of nineteen hundred and
forty, known and cited as the Virginia Banking Act, be amended and
re-enacted, as follows: |

Section 48-a. Limitation on amount of loans made upon real estate
security—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 mortgage, deed of trust or other instru-
ment 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
710 , ACTS OF ASSEMBLY -fwa., 1942

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 purpose of this section, be a loan secured by real
estate; a loan secured in part by mortgage, deed of trust, or other such
instrument 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 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 reduced as soon as
reasonably possible so as to conform to the requirements 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 instru-
ment 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 Re-
construction Finance Corporation, the R. F. C. Mortgage Company, a
Federal Reserve Bank, or any of them, has definitely agreed or com-
mitted itself to participate, and/or purchase, nor to loans secured by
mortgage, or deed of trust which are insured or as to which a firm com-
mitment to insure has been issued 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.