TO: ALL TENNESSEE STATE CHARTERED
BANKS
SUBJECT: TENNESSEE CODE ANNOTATED, SECTION 45-2-1102 LIMIT OF LOANS TO ANY ONE
BORROWER
DATE: APRIL 28, 1997
At present, the department's interpretation of T.C.A., Section 45-2-1102
requires that a bank's legal lending limit be calculated on the date a loan is
made. The department recognizes that the frequency of a daily calculation places
an unnecessary regulatory burden on the management of our banks. Thus, to
simplify the calculation of capital for lending limit purposes and alleviate the
burden of daily calculations, the department is changing its interpretation of
said statute to permit banks to calculate their legal lending limit on a
quarterly basis using Report of Condition data. Accordingly, the calculation
should be performed at the end of each calendar quarter to determine the legal
lending limit for the next quarter. For purposes of this Bulletin, the effective
date of each calculation will be the earlier of the following dates: a) The date
on which the bank's Consolidated Report of Condition and Income (Call Report) is
submitted; or b) The date on which the bank's Call Report is required to be
submitted. This Bulletin takes effect immediately. If you have any questions
regarding this Bulletin, please contact either Assistant Commissioner Derek
Carrier or Chief Administrator Jim Douthit at (615) 741-6013.
______________________________
Bill C. Houston
Commissioner
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