Acquisition of Property to Satisfy or Protect Previous Loan

A bank may take property of any kind to satisfy or protect a loan previously made in good faith and in the ordinary course of business. Property acquired in satisfaction of a loan shall be held subject to the following limitations:

(a)Stock shall be sold within 6 months or such additional period not exceeding one year as the Commissioner may allow.

(b)Real estate may be used in the banking business, subject to the conditions prescribed by this Title for property purchased for such use, or may be rented. Real estate may be improved to facilitate its sale. Unless used in the banking business, it shall be sold within 5 years or such longer period as the Commissioner may allow.

(c)Other property the acquisition of which is not otherwise authorized by this Title shall be sold within 6 months or such longer period as the Commissioner may allow.

(d)The property shall be entered on the books at cost or fair market value, whichever is less, and property which the bank is not otherwise authorized to acquire shall be charged off at a rate of not less than 10% per annum for real estate and 20% per annum for other property or at such lower rate not less than 5 and 10% respectively, as the Commissioner may allow.