Page:United States Statutes at Large Volume 73.djvu/527

 73 S T A T. ]

PUBLIC LAW 86-251-SEPT. 9, 1959

489

SEC, 4. (a) The second sentence of section 24 of the Federal Reserve j^|^^g°^ e s t a t e Act (12 U.S.C. 371) is amended to read as follows: "A loan secured "aslstat. 273. by real estate within the meaning of this section shall be in the form of an obligation or obligations secured by a mortgage, trust deed, or other instrument upon real estate, which shall constitute a first lien on real estate in fee simple or, under such rules and regulations as may be prescribed by the Comptroller of the Currency, on a leasehold under a lease which does not expire for at least 10 years beyond the maturity date of the loan, and any national banking association may purchase any obligation so secured when the entire amount of such obligation is sold to the association." (b)(1) The third sentence of section 24 of such Act is amended by inserting after "and (3) " the following: "any such loan may be made in an amount not to exceed 75 per centum 01 the appraised value ^°^" n.iiitation. of the real estate offered as security and for a term not longer than 20 years if the loan is secured by an amortized mortgage, deed of trust, or other such instrument under the terms of which the installment payments are sufficient to amortize the entire principal of the loan within the period ending on the date of its maturity, and (4)". (2) The third sentence of such section 24 is further amended by inserting before the period at the end of the third sentence a comma and the following: "and shall not apply to real estate loans which ^^state-guaranteed are fully guaranteed or insured by a State, or by a State authority for the payment of the obligations of which the faith and credit of the State is pledged, if under the terms of the guaranty or insurance agreement the association will be assured of repayment in accordance with the terms of the loan". (c) The third paragraph of section 24 of such Act is amended to read as follows: "Loans made to finance the construction of industrial or commer- j^construction cial buildings and having maturities of not to exceed eighteen months where there is a valid and binding agreement entered into by a financially responsible lender to advance the full amount of the bank's loan upon the completion of the buildings and loans made to finance the construction of residential or farm buildings and having maturities of not to exceed nine months, shall not be considered as loans secured by real estate within the meaning of this section but shall be classed as ordinary commercial loans whether or not secured by a mortgage or similar lien on the real estate upon which the building or buildings are being constructed: Provided, That no national banking association shall invest in, or be liable on, any such loans in an aggregate amount in excess of 100 per centum of its actually paid-in and unimpaired capital plus 100 per centum of its unimpaired surplus fund. Notes representing loans made under this section to finance the construction of residential or farm buildings and having maturities of not to exceed nine months shall be eligible for discount as commercial paper within the terms of the second paragraph of section 13 of this Act if accompanied by a valid and binding agreement to advance the full amount of the loan upon the completion of the building entered into by an individual, partnership, association, or corporation acceptable to the discounting bank." (d) Section 24 of such Act is further amended by adding at the 12 USC 371. end thereof the following new paragraph: "Loans made to manufacturing and industrial businesses where the ^^^° m m erelai association looks for repayment out of the operations of the borrow- °""^" er's business, relying primarily on the borrower's general credit standing and forecast of operations, with or without other security,

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