California Financial Code

§ 1491

FIN § 1491 Effective Jan 1, 2012Div. 1.1 · Ch. 14 · Art. 3

Statute text

No loan shall be made by any commercial bank upon the securities of one or more corporations, the payment of which loan is undertaken, in whole or in part, severally, but not jointly, by two or more persons in any of the following circumstances:

(a)If the borrowers or underwriters are obligated absolutely or contingently to purchase the securities, or any of them, collateral to the loan, unless the borrowers or underwriters have paid on account of the purchase of the securities an amount in cash, or its equivalent, equal to at least 25 percent of the several amounts for which they remain obligated in completing the purchase of the securities.

(b)If the commercial bank making the loan is liable, directly or indirectly, or contingently, for the repayment of the loan or any part thereof.

…

Legislative history

Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.