Legal Lending Limit Law and Legal Definition
A legal lending limit is the maximum amount a bank can lend to a single borrower. All types of financial services have a legal lending limit. In the U.S., governmental regulations providing the basis for calculating legal lending limit varies for national and state financial institutions. General financial condition of a borrower and a lender is considered to fix the lending limit. Calculating a legal lending limit also requires assessing the ability of the borrower to repay the debt within the terms associated with the contract with the bank.
Usually, regulations determining a legal lending limit are created and enforced on a national level. This national level regulation ensures consistency among lenders of the same type. National banks must fix same lending limit to loan and savings for a single borrower. In the U.S., lending limits are defined within the Financial Institutions Act of 1989.
Legal Definition list
Related Legal Terms
- Aggregate Lifetime Limit
- Aggregate Limit [Insurance]
- All-Limitations Rule
- American Board of Medicolegal Death Investigators [ABMDI]
- Animal Legal Defense Fund
- Annual Limit on Intake (ALI)
- Applicable Annual Limitation
- Asset-Based Lending
- Association of Legal Administrators
- Authorised Weight Limit [Aviation Law]
