Texas Finance Code - Section 34.202. Violation Of Lending Limit
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Texas Lawyer > Finance Code > Texas Finance Code - Section 34.202. Violation Of Lending Limit
§ 34.202. VIOLATION OF LENDING LIMIT. (a) An officer,
director, manager, managing participant, or employee of a state
bank who approves or participates in the approval of a loan with
actual knowledge that the loan violates Section 34.201 is jointly
and severally liable to the bank for the lesser of the amount by
which the loan exceeded applicable lending limits or the bank's
actual loss. The person remains liable for that amount until the
loan and all prior indebtedness of the borrower to the bank have
been fully repaid.
(b) The bank may initiate a proceeding to collect an amount
due under this section at any time before the fourth anniversary of
the date the borrower defaults on the subject loan or any prior
indebtedness.
(c) A person who is liable for and pays amounts to the bank
under this section is entitled to an assignment of the bank's claim
against the borrower to the extent of the payments.
(d) For purposes of this section, an officer, director,
manager, managing participant, or employee of a state bank is
presumed to know the amount of the bank's lending limit under
Section 34.201(a) and the amount of the borrower's aggregate
outstanding indebtedness to the bank immediately before a new loan
or extension of credit to that borrower.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
Section: 34.102 34.103 34.104 34.105 34.106 34.107 34.201 34.202 34.203 34.204 34.301 34.302 34.303 34.304 34.305
Last modified: August 10, 2007
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