RÉSUMÉ DIGEST
ACT 74 (SB 144) 2016 Regular Session Martiny
Prior law authorized a state bank to purchase, hold, and convey immovable property which
is necessary for the proper transaction of its business, which has been mortgaged to it as
security for a loan, which has been conveyed to it in satisfaction of debts previously
contracted in the course of its business, which it purchases at sales under judgement of
mortgages held by the bank, and which is pursuant to participation in a shared appreciation
loan or home equity conversion loan.
Prior law prohibited a bank from holding immovable property as an asset for longer that 10
years unless the immovable is necessary for the proper transaction of the bank's business or
is held pursuant to participation in a shared appreciation loan or home equity conversion
loan. Required that the bank carry the immovable on its books at fair market value or
acquisition cost, whichever is lower. New law removes provision that the property be carried
at fair market value or acquisition cost and provides that the immovable be carried on the
bank's books in accordance with generally accepted accounting principles (GAAP).
Prior law required that a state bank annually obtain a current appraisal, from a qualified
appraiser, of the fair market value of immovable property held by the bank in an amount
greater than $250,000 and reduce the value of the property on its books if the fair market
value declines.
New law retains the requirement for annual appraisal but provides that the bank account for
the property in accordance with generally accepted accounting principles (GAAP).
Prior law required that if property is valued at less than $250,000, the state bank is to
annually perform an adequate evaluation of the property. Provided that if determined that
the property value is less than its book value, then the book value is to be reduced to reflect
the correct valuation according to policies adopted by the commissioner of financial
institutions. New law requires that the bank reflect the correct valuation in accordance with
generally accepted accounting principles (GAAP).
Effective August 1, 2016.
(Amends R.S. 6:243(B)(1) and (2)(a) and (b))