PURPOSE: Effective September 28, 1985 section 362.170, RSMo was amended by HB 408. This rule restates the law and declares this office’s position concerning the amendment.

1. (1) The Legal Loan Limit as Amended. Section 362.170, RSMo provides that the legal loan limits will not apply to loans “. . . to the extent they are secured by a segregated deposit account in the lending bank if the lending bank has obtained a perfected security interest in such account.” Stated differently, a bank does not count against its legal loan limit the portion of any loan which is one hundred percent (100%) secured by a perfected security interest in deposits in the bank. For example, consider a bank with a one (1) million dollar legal loan limit. If a borrower pledges a certificate of deposit
2. (CD) in the lending bank in the amount of one hundred thousand dollars ($100,000), the bank could lend up to one million one hundred thousand dollars (the one (1) million legal loan limit plus the one hundred thousand dollars ($100,000) which is fully secured by the CD).
3. (2) Perfected Security Interest. In order to expand the legal loan limit per the amendment of section 362.170, RSMo, the bank must perfect the security interest. This will ordinarily require actual possession of any CDs or passbooks and the bank will be expected to complete any other steps in the perfection process.

AUTHORITY: sections 361.105, RSMo 1986 and 362.170, RSMo Supp. 1989.* This rule originally filed as 4 CSR 140-2.082. Original rule filed Aug. 2, 1985, effective Oct. 11, 1985. Moved to 20 CSR 1140-2.082, effective Aug. 28, 2006. *Original authority: 361.105, RSMo 1967 and 362.170, RSMo 1939, amended 1941, 1943, 1945, 1959, 1963, 1967, 1977, 1981, 1983, 1985, 1986, 1989.