Similar Policies and Programs 



In 1986, the South Dakota Legislature enacted a 

 bill to permit the amortization of bank loan losses over 

 a period of 15 years. Under the new law, a loan loss 

 may be charged off over the 15-year period if the loan 

 was classified in an amount not less than $50,000 and if 

 it was advanced as a business, commercial, or 

 agricultural loan.-'-^ 



All other bank loans ineligible for amortization 

 under the new law must be charged to the bank's capital 

 reserve. The South Dakota law took effect July 1, 1986. 



Option #4 



Permit banks to hold foreclosed farmland for a 

 longer period of time in order to preserve 

 real estate values and to allow banks to 

 stabilize their capital. 



Explanation 



This option would modify current restrictions on * 

 real estate that banks may hold. The present state law 

 prohibits a bank from holding foreclosed real estate for 

 a period longer than five years from the date of 

 acquisition. The law reads in part as follows: 



32-1-423. Real estate which banks may 

 purchase, hold, or convey. (1) A bank 

 organized under the provisions of this chapter 

 may purchase, hold, or convey real estate 

 which: 



( a ) . . . ; 



(b) . . .; 



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