Here is a Fed comment regarding this issue, from the Federal Register in 2007. The comment is located here
"The Board also has received numerous inquiries about how a bank can ensure compliance with the correspondent lending restrictions in 12 U.S.C. 1972(2), given that all related reporting requirements are being eliminated as part of this rulemaking. Briefly, the correspondent lending restrictions in 12 U.S.C. 1972(2) require, among other things, that extensions of credit by a bank to an insider of a correspondent bank be on market terms. In light of the elimination of the statutory and regulatory reporting requirements associated with 12 U.S.C. 1972(2), a bank may select any reasonably prudent method to ensure compliance with the restrictions. For example, a bank may establish policies and procedures to request additional information about a borrower's relationships with correspondent banks when the bank determines that a prospective extension of credit to the borrower will be on preferential terms."