RDCSB101 3858 2920
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
SB 101 Reengrossed 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.
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Senate Floor Amendments to engrossed bill
1. Makes technical changes.
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Commerce to the
reengrossed bill:
1. Make technical changes.
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