1151.2910 Commercial and standby letters of credit. - Ohio Statutes

1151.2910 Commercial and standby letters of credit.

(A) A savings and loan association may issue commercial and standby letters of credit and may pledge collateral to secure its obligations thereunder, subject to Chapter 1305. of the Revised Code and to the following requirements:

(1) Each letter of credit must conspicuously state that it is a letter of credit;

(2) The issuer’s undertaking must contain a specified expiration date or be for a definite term, and must be limited in amount;

(3) The issuer’s obligation to pay must be solely dependent upon the presentation of conforming documents as specified in the letter of credit, and not upon the factual performance or nonperformance by the parties to the underlying transaction;

(4) The account party must have an unqualified obligation to reimburse the issuer for payments made under the letter of credit.

(B) To the extent funds are advanced under a letter of credit without compensation from the account party, the amount shall be treated as an extension of credit subject to percentage-of-assets limits and other requirements under an applicable provision of this chapter.

Effective Date: 07-14-1987