Chap. 7.—An ACT to amend and re-enact Section 48-a of Chapter 507 of the Acts
of Assembly of 1928, approved March 27, 1928, and known as the Virginia
Banking Act, as heretofore amended, relating to a limitation of the amount of
loans made by banks upon real estate security. [S B 5}

Approved February 11, 1946

Be it enacted by the General Assembly of Virginia :

1. That section forty-eight-a of chapter five hundred seven of
the Acts of Assembly of nineteen hundred twenty-eight, approved March
twenty-seventh, nineteen hundred twenty-eight, and known as _ the
Virginia Banking Act, as heretofore amended, 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 of not more than ten years, or not less than five
per centum per annum of the principal of the loan when such loan 1s 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 ap-
praised 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 un-
impaired 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 re-
quired, if and when the loan shall exceed one thousand dollars, shall be
made by appraisers appointed by or by the authority of the board of di-
rectors, 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 sec-
tion, or to prohibit any bank from accepting as security for a loan here-
tofore 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.

Loans which are secured in whole or in part by guarantees or by
commitments or agreements to take over, insure, participate in or pur-
chase the same, made by the United States, a Federal Reserve Bank or
any governmental agency of the United States, including corporations
wholly owned, either directly or indirectly, by the United States, shall
not be subject to the limitations and restrictions of this section except
that loans secured in part as hereinabove provided and in part by real
estate security, shall be classified, treated and regarded as real estate
loans to the extent of the excess of such loans over and above the obliga-
tion of the federal government or its agencies for the purpose of deter-
mining the aggregate amount of real estate loans held by a bank and the
maximum amount of a loan secured by real estate, provided, however,
that no hank shall make any loar 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 the 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.