Legal Lending Limit

Maximum amount a bank can lend to a single borrower. National banks are limited to 15% of capital and reserves on unsecured loans (25% of capital if fully secured); bank holding companies can lend a bank affiliate up to 10% of the capital and surplus of the affiliate, or up to 20% of the capital of all affiliates owned by the same holding company. Under the Financial Institutions Reform, Recovery and Enforcement Act of 1989, savings and loans are required to follow the same lending limits to a single borrower as national banks.