2019 Regular Session ENROLLED
SENATE BILL NO. 101
BY SENATOR WHITE
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
1 AN ACT
2 To amend and reenact R.S. 6:243, relative to banks; to provide relative to the powers and
3 function of state banks; to provide relative to immovable property and dealings; to
4 authorize certain actions; to provide certain requirements, terms, conditions,
5 procedures, and effects; and to provide for related matters.
6 Be it enacted by the Legislature of Louisiana:
7 Section 1. R.S. 6:243 is hereby amended and reenacted to read as follows:
8 §243. Immovable property; dealings
9 A. A state bank may lawfully purchase, hold, and convey any immovable
10 property:
11 (1) Which is necessary for the proper transaction of its business.
12 (2) Which has been mortgaged to it in good faith as security for loans.
13 (3) Which has been conveyed to it in satisfaction of debts previously
14 contracted bona fide in the course of its business.
15 (4) Which it purchases at sales under judgment of mortgages held by it or in
16 which it has an interest by being subrogated to rights according to Article 2161 1829
17 of the Civil Code.
18 (5) Pursuant to participation in a shared appreciation loan or home equity
19 conversion loan, including but not limited to reverse mortgages and shared
ACT No. 348
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1 appreciation mortgages, wherein the bank has a right to receive a share of the
2 appreciation in value of the security property upon maturity of the loan. Such loans
3 shall be authorized when any of the following exist:
4 (a) The security property of the borrower is designed principally as a
5 single-family residence.
6 (b) The borrower is the owner and occupant of the security property.
7 (c) The loan is authorized pursuant to the Alternative Mortgage Transaction
8 Parity Act of 1982, 12 U.S.C. §3801, et seq., and regulations issued thereunder, or
9 regulations issued by the office of financial institutions as provided in this Title.
10 B.(1) Except for property held pursuant to Paragraphs (A)(1) and (A)(5) of
11 this Section, a state bank shall not hold immovable property as an asset for a longer
12 time than ten years, except as provided in Paragraphs (E)(2) or (F)(1) of this
13 Section. Any bank holding immovable property which is subject to the ten-year
14 divestiture period shall enter the immovable property on its books in accordance with
15 generally accepted accounting principles (GAAP).
16 (2)(a) A state bank shall obtain annually, within a reasonable time as
17 determined by the commissioner, from a qualified appraiser a current appraisal of the
18 fair market value of any such property valued at an amount greater than two hundred
19 fifty thousand dollars and shall account for the property in accordance with GAAP.
20 (b) For property valued at less than two hundred fifty thousand dollars, a state
21 bank shall annually perform an adequate evaluation of such property. After adequate
22 evaluation of the property, a state bank shall account for the property in accordance
23 with GAAP. The commissioner may require a state bank to obtain an appraisal by
24 a qualified appraiser of a piece of property valued at less than two hundred fifty
25 thousand dollars, if it is necessary for safety and soundness reasons.
26 C.(1) For immovable property provided for in Paragraphs (A)(2), (A)(3),
27 and (A)(4) of this Section, a state bank shall obtain, within a reasonable time
28 before or after the property is acquired, a current appraisal of the fair market
29 value of any such property and shall account for the property in accordance
30 with generally accepted accounting principles (GAAP). For purposes of this
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1 Paragraph, a state bank may perform an evaluation in lieu of an appraisal for
2 residential real estate valued at or below two hundred fifty thousand dollars and
3 for commercial real estate valued at or below five hundred thousand dollars.
4 (2) An additional appraisal shall be required for immovable property
5 every third calendar year from the date the initial appraisal was obtained
6 pursuant to Paragraph (1) of this Subsection. For purposes of this Paragraph,
7 a state bank may perform an evaluation in lieu of an appraisal for residential
8 immovable property valued at or below two hundred fifty thousand dollars and
9 for commercial immovable property valued at or below five hundred thousand
10 dollars.
11 (3) Notwithstanding Paragraph (2) of this Subsection, for commercial
12 immovable property valued above five hundred thousand dollars, an additional
13 appraisal shall be required every second calendar year from the date the initial
14 appraisal was obtained pursuant to Paragraph (1) of this Subsection.
15 D.(1) The commissioner may require additional appraisals or evaluations
16 of immovable property provided for in Paragraphs (A)(2), (A)(3), and (A)(4) of
17 this Section, not more often than annually, if the commissioner determines
18 either of the following to be true:
19 (a) The appraisal or evaluation is necessary for safety and soundness
20 reasons.
21 (b) The appraisal or evaluation is necessary due to a material decline in
22 the condition or market value of a specific property or local real estate market.
23 (2) For purposes of this Subsection, the commissioner may require an
24 appraisal for immovable properties of any value pursuant to this Section,
25 regardless of the thresholds established in this Section.
26 (c) E.(1) A state bank may, at its option, select the method of valuation as
27 provided for in this Paragraph Subsection C of this Section, or may reduce the value
28 of the immovable property by at least one-tenth of the original book value each year
29 that the property is held. The bank shall divest itself of that property within the
30 ten-year period, regardless of which method of valuation is selected. The bank shall
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1 continue to apply said this method consistently throughout the divestiture period.
2 (3)(2) The ten-year divestiture requirement shall not apply to immovable
3 property which has been held by a state bank for more than five years as of
4 January 1, 1980.
5 (4)(3) A bank which acquires the assets of a failed or failing bank shall be
6 allowed ten years from the date it acquires the immovable property of the failed or
7 failing bank within which to divest itself of such property. A qualified appraisal shall
8 be obtained annually, as provided in Paragraph (2) of this Subsection, for each item
9 of property having a value in excess of two hundred fifty thousand dollars. A bank
10 shall value the acquired property in accordance with the requirements of
11 Paragraph (1) of this Subsection. A bank shall establish the anniversary date to be
12 the original acquisition date of the other immovable property as determined by the
13 failed or failing institution or the date the bank acquires the other immovable
14 property of the failed or failing institution. Once the anniversary date has been
15 established, that date will remain as such for as long as the property is held by the
16 bank.
17 (5)(4) Except as otherwise provided by rule or regulation promulgated by the
18 commissioner, a state bank shall not exchange any property, whether movable or
19 immovable, acquired in the course of its business as provided in Subsection A
20 hereofof this Section.
21 C.F.(1) A state bank may hold immovable property in perpetuity, exempt
22 from the divestiture requirements of this Section, if all of the following conditions
23 are met:
24 (a) The property is not being operated by the financial institution as an
25 ongoing business.
26 (b) The property has been written down to the value of one dollar on the
27 books of the bank.
28 (c) The property has been transferred into a subsidiary of the bank.
29 (2) Property held in perpetuity subject to Paragraph (1) of this Subsection
30 shall also be exempt from the requirement for appraisal contained in Paragraph
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1 (B)(2) of this Section valuation requirements contained in Subsection C of this
2 Section.
PRESIDENT OF THE SENATE
SPEAKER OF THE HOUSE OF REPRESENTATIVES
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED:
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