Savings banks must underwrite loans and investments carefully, check financial soundness before making them, follow appraisal rules, and keep appraisals on file.
PART VI. INVESTMENTS §1221. Underwriting A. No savings bank shall make any loan or investment authorized by this Part unless the savings bank first has determined that the type, amount, purpose, and repayment provisions of the loan or investment in relation to the borrower's or issuer's resources and credit standing support the reasonable belief that the loan or investment will be financially sound and will be repaid according to its terms and that the loan or investment is not otherwise unlawful. B. Each loan or investment that a savings bank makes or purchases, whether wholly or in part, shall be adequately underwritten, reviewed periodically, and reserved against as necessary in accordance with its payment performance, all in accordance with the provisions of this Chapter and the directives of the commissioner of financial institutions. C. Every appraisal or reappraisal of property which a savings bank is required to make shall be made as follows: (1) By a qualified appraiser designated by the board of directors. (2) In the case of an insured or guaranteed loan, by any appraiser approved by any lending, insuring, or guaranteeing agency of the United States or the state of Louisiana which insures or guarantees such loan, wholly or in part. (3) Each appraisal shall be in writing prepared at the request of the lender for the lender's use, disclose the market value of the security offered, contain sufficient information and data concerning the appraised property to substantiate the market value thereof, be certified and signed by the appraiser or appraisers, and state that such appraiser or appraisers have personally examined the described property, which appraisal shall be filed and preserved by the savings bank. D. Any violation of this Part shall constitute an unsafe or unsound practice. Anyone who knowingly violates any provision of this Part shall be subject to enforcement action or civil money penalties as provided for in this Title. Acts 1990, No. 816, §1, eff. Sept. 1, 1990.