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Loans to One Borrower Limitations
Answer by Randy Carey, BOL Guru
Guru Bios
Question: Are guarantors included in loans to one borrower limitations?
Answer: Loans made either directly or indirectly (guarantees) are included in the calculation of the total exposure to a single borrower for the loans to one borrower limitation.
For example in the OCC regulations:
Sec. 32.2 Definitions.
(a) Borrower means a person who is named as a borrower or debtor in a loan or extension of credit, or any other person, including a drawer, endorser, or guarantor, who is deemed to be a borrower under the "direct benefit" or the "common enterprise" tests set forth in Sec. 32.5.
If you are a state bank you will have to consult your state laws.
First published on BankersOnline.com 3/24/08
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