The original instrument and the following digest, which constitutes no part of the
legislative instrument, were prepared by Jerry G. Jones.
DIGEST
SB 101 Engrossed 2019 Regular Session White
Present law authorizes state banks to purchase, hold, and convey any immovable property necessary
for the proper transaction of its business, or which has been mortgaged to it in good faith as security
for loans, or which has been conveyed to it in satisfaction of debts previously contracted bona fide
in the course of its business, or which it purchases at sales under judgment of mortgages held by it
or in which it has an interest by being subrogated, or under certain circumstances pursuant to
participation in a shared appreciation loan or home equity conversion loan.
Proposed law retains present law.
Present law provides generally that, with certain exceptions, a state bank shall not hold immovable
property as an asset for longer than 10 years. Proposed law adds exceptions of immovable property
held by a state bank for more than five years as of Jan. 1, 1980, and immovable property that may
be held in perpetuity if it is not being operated by the financial institution as an ongoing business,
has been written down to the value of one dollar on the books of the bank, and has been transferred
into a subsidiary of the bank.
Proposed law adds certain appraisal requirements for immovable property. Provides that
for certain property a state bank shall obtain, within a reasonable time before or after the property
is acquired, a current appraisal of the fair market value of any such property and shall account for
the property in accordance with generally accepted accounting principles. Further provides that the
bank may perform an evaluation in lieu of an appraisal for residential real estate valued at or below
$250,000 and for commercial real estate valued at or below $500,000. Further provides for additional
appraisals or evaluation every three years, and for certain additional appraisals for commercial
immovable property valued above $500,000.
Proposed law also provides circumstances under which the commissioner may require additional
appraisal or evaluations. Also provides that certain property held in perpetuity are exempt from
certain valuation requirements.
Present law provides that a state bank shall obtain annually, within a reasonable time as determined
by the commissioner, from a qualified appraiser a current appraisal of the fair market value of
immovable property valued at an amount greater than $250,000, and shall account for the property
in accordance with GAAP. For property valued at less than $250,000, provides that a state bank shall
annually perform an adequate evaluation of such property. Further provides that the commissioner
may require a state bank to obtain an appraisal by a qualified appraiser of a piece of property valued
at less than $250,000, if it is necessary for safety and soundness reasons. Proposed law deletes these
provisions. Effective August 1, 2019.
(Amends R.S. 6:243)
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Commerce, Consumer
Protection, and International Affairs to the original bill
1. Makes technical changes.
2. Revises language relative to appraisals.