1. (a) The Bank Commissioner and State Banking Board rule that separate loans to a parent corporation and its subsidiary must be combined, for the assets of the parent may be represented wholly or in part by the stock of the subsidiary.
2. (b) If separate loans are made to two (2) or more subsidiaries that operate separately and entirely independent of each other, then so far as the loan limit law is concerned, each could borrow up to the full loan limit, but if a subsidiary is dependent in its operations upon another subsidiary of the same parent for some vital service or commodity, the loans should be combined.

3. (c) If the parent corporation is not borrowing, obligations of subsidiary corporations are generally not combined except in the following situations:

   1. (1) The bank is looking to a single source for repayment of the loan;
   2. (2) One (1) or more loans are for the accommodation of the parent corporation or other subsidiary; or
   3. (3) The borrowing corporations are not separate concerns in reality but merely departments or divisions of a single enterprise.
4. (d) Obligations of a corporation must be combined with any other extension of credit the proceeds of which are used for the benefit of the corporation.

Codification Notes: This section was promulgated as Section 47-501.2 of the State Bank Department Rules prior to codification into the Code of Arkansas Rules. This section as promulgated prior to codification into the Code of Arkansas Rules provided as follows: "(Reference A.C.A. § 23-47-501)"