SB242

Senate Bill 242 amends Arkansas law concerning loans involving the stock of a state bank. While the law generally prohibits state banks from lending funds against their own stock as collateral or for the purpose of purchasing their own stock, the bill introduces specific exceptions. It allows state banks to acquire or maintain loans secured by their own stock or bank holding company stock in the context of mergers or similar transactions authorized by the Bank Commissioner. These loans must adhere to strict conditions, including not increasing the committed amount and applying standard credit underwriting procedures. Additionally, the bill permits loans secured by securities accounts that may contain the bank's own stock, provided the stock is excluded from the bank's credit underwriting process and specific written policies are followed. Finally, the bill establishes civil money penalties for officers, directors, or stockholders who violate these provisions.