Iowa Banking Law Blog

New FDIC guidance on managing credit risks for loan participations
Sep. 12, 2012L. Allyn Dixon Jr., Iowa Banking Law Blog
New FDIC guidance for loan participations

Today, the FDIC issued FIL-38-2012 setting forth some guidelines it expects banks to follow when they purchase loan participations. Essentially, the FDIC expects the same type of underwriting and administration diligence when it comes to loan participations that it expects for loans that a bank directly originates. Loan policies should outline procedures for originating and purchasing participation loans and contain other requirements over the life of the participation, among other listed requirements. The guidance sets forth items that a loan participation agreement should contain, and makes a point of urging banks to exercise caution and perform extensive due diligence for participations involving out-of-territory loan or credit facilities or to borrowers in industries unfamiliar to the bank.

Given this advisory, as you prepare for examinations, this might be a good time to look at your loan policy to ensure that it meets the FDIC’s expectations.

If you have any questions, contact Allyn Dixon at 515.246.4520 or adixon@dickinsonlaw.com

 

share this page:
  • Facebook
  • LinkedIn
  • Twitter
  • Google Bookmarks
  • StumbleUpon
  • Digg
  • del.icio.us
Categories: Allyn Dixon, Banking Law
Industry Categories: Banks & Financial Institutions
Practice Area Categories: Banking Law

L. Allyn Dixon Jr.

Email:

adixon@dickinsonlaw.com

Phone:

515.246.4520
 

Latest Articles

New “Know Your Vendor” Guidance from the OCC

In a recent Bulletin, the Office of the Comptroller of the Currency published new guidance […]

Delay Announced for Key Affordable Healthcare Act Provisions

Yesterday afternoon, the Treasury Department announced that employers with more than 50 full time equivalent […]

Against this background . . .

In recent months, we’ve noticed a substantial increase in the number of Section 19 waiver […]