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#1938405 - 07/08/14 02:48 PM Regulation O - lending limits
Tryin-2-Comply Offline
100 Club
Joined: Apr 2003
Posts: 202
Hills of TN
My question is related to the "single insider" aggregate lending limits.

A bank cannot extend credit to any one insider, together with his or her related interest in excess of -

a. 15 percent of the bank's unimpaired capital and umimpared surplus for loans not fully secured by readily marketable collateral having a market value at least equal to the amount of credit extended; plus,
b. an additional 10 percent of the bank's unimpaired capital and umimparied surplus in the case of loans that are fully secured by readily marketable collateral having a market value at least equal to the amount of credit extended.

My question is related to exempt credits. If we have a director who is classified as an executive officer, any loans made to that executive officer that are fully secured by a "perfected security interest in a segregated deposit account maintained by the lending bank" - are exempt and no limits apply. correct?

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Lending Compliance
#1939275 - 07/10/14 02:30 PM Re: Regulation O - lending limits Tryin-2-Comply
Tryin-2-Comply Offline
100 Club
Joined: Apr 2003
Posts: 202
Hills of TN
No comments?????

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#1939321 - 07/10/14 03:38 PM Re: Regulation O - lending limits Tryin-2-Comply
cwg Offline
Junior Member
Joined: Aug 2006
Posts: 48
South Central Wisconsin
Yes you are correct. But be careful about segregated deposit accounts. That doesn't mean you just put a hold on the account that is used for other purposes. The funds are truly separate and are locked down. Also what is the loan to value? Do you have values listed in your loan policy?

There is a lot to think about besides just a yes or no answer in Regulation O.

Charlie
_________________________
Regulations make more sense when you are not sober.

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#1939511 - 07/10/14 07:12 PM Re: Regulation O - lending limits Tryin-2-Comply
Tryin-2-Comply Offline
100 Club
Joined: Apr 2003
Posts: 202
Hills of TN
Thank you.

Yes, they are truly seperate accounts and our loan policy covers all of the values, etc.

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