Has the FDIC responded to the guidance letter submitted by the Federal Reserve on November 9, 2009 which outlines their interpretation of the ability of banks to offer short term balloon notes less than 7 years? We are trying to determine what will happen if we decide to offer balloons less than 7 years. Under Reg Z, banks are given safe harbor, if they comply with the provisions therein. If we choose to use the letter issued by the Federal Reserve to substantiate our reasoning for offering 5 year balloons - what will be our risk exposure when examiners from the FDIC review our policies?
Any assistance with this would be appreciated.
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