77-3

Los Angeles Office

October 26, 1977

ATTENTION: ________                         Vice President

Gentlemen:

In response to your inquiry of October 11, 1977, please be advised that for the purposes of loan limits under the Banking Law, unearned interest is not considered to be an obligation. Therefore, in add-on interest loans, the payoff amount rather than the gross loan amount should be used to determine the customer’s obligation.

Yours very truly,

CARL J. SCHMITT Superintendent of Banks

By:

L. TAUFER
Deputy Superintendent of Banks

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