Kingsfield · Research · Banking & Financial Services

How much can a national bank lend to a single borrower under the lending limit?

Published 2026-06-23 · U.S. federal law

A national bank's total loans and extensions of credit to one borrower generally may not exceed 15 percent of the bank's unimpaired capital and unimpaired surplus.

The answer

The general limit

12 U.S.C. § 84(a) provides that the total loans and extensions of credit by a national banking association to a person outstanding at one time may not exceed 15 percent of the unimpaired capital and unimpaired surplus of the association if the loan is not fully secured.

The secured add-on

An additional margin applies to readily marketable collateral. Section 84(a) permits a further 10 percent of capital and surplus for loans fully secured by readily marketable collateral, on top of the 15 percent baseline.

The judged input

What the AI drafted

Submitted to the judge

This is an excerpt from a draft bank regulatory opinion — the kind of work product a lawyer generates with a legal-AI drafting tool, then has to stand behind. Kingsfield does not write it; it rules on the citations the model put in it. This draft cites two authorities; one of them is wrong.

AI draft excerpt — bank regulatory opinion

The Bank's proposed credit facility to a single obligor must be tested against the national-bank lending limit. Under 12 U.S.C. § 84, total loans and extensions of credit to one borrower may not exceed 15 percent of the Bank's unimpaired capital and unimpaired surplus, with an added 10 percent available for fully secured exposures. We caution that this limit is set by Section 84 and is not found in the general corporate-powers grant at 12 U.S.C. § 24.

The judge ruled on every citation as the draft used it — it accepted 12 U.S.C. § 84 and rejected 12 U.S.C. § 24. Here is why.

The verdict

How Kingsfield ruled

Ruled 2026-06-23

Each citation in the draft above was submitted to the Kingsfield judge and ruled against the primary-law corpus — Accept, Reject, or Inconclusive, per citation. These are live verdicts, not editorial. Each card shows the claim the draft made and the verbatim authority the verdict was rendered against.

Accept12 U.S.C. § 84

The draft claimed: The total loans and extensions of credit by a national banking association to one person outstanding at one time may not exceed 15 percent of the association's unimpaired capital and unimpaired surplus, plus an additional 10 percent if the additional amount is fully secured by readily marketable collateral.

“§ 84(a)(1) The total loans and extensions of credit by a national banking association to a person outstanding at one time and not fully secured, as determined in a manner consistent with paragraph (2) of this subsection, by collateral having a market value at least equal to the amount of the loan or extension of credit shall not exceed 15 per centum of…”

Cite found; proposition supported by the cited text.

Reject12 U.S.C. § 24

The draft claimed: Section 24 sets the lending limit capping a national bank's loans to one borrower at 15 percent of capital and surplus.

Cite found, but the cited text does not support the claim. 12 U.S.C. 24 enumerates the general corporate powers of national banking associations (including the incidental power to lend money on personal security); the quantitative single-borrower lending limit is at 12 U.S.C. 84. Regenerate with the correct authority.

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This page is legal information, not legal advice, and does not create an attorney-client relationship. The draft shown is an illustration of a typical AI answer; verdicts reflect the cited authority in the Kingsfield corpus as of the ruling date shown above.