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#2120424 - 03/03/17 03:26 PM Loan to Insider - Match other offer?
JAM Offline
100 Club
Joined: Aug 2005
Posts: 208
We have a director looking to refinance a multifamily property as the current loan is near maturity. The bank that currently has the loan has given him a written offer. If we match the rate/terms offered by the other bank the rate will be slightly lower than other recent multifamily loans we have done. The rate and term are certainly reasonable given the current market and we would want to make the loan to any customer. Does documenting that the director of the bank got a lower rate based on the bank matching another offer sufficiently show that they did not get preferential treatment or would we have to have another one of our loans that was the same rate/term as the director loan?

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Lending Compliance
#2120426 - 03/03/17 03:48 PM Re: Loan to Insider - Match other offer? JAM
rrush Offline
Member
Joined: Dec 2011
Posts: 74
I have always been told that it is about "similarly situated" customers. So if you would do the same thing for a "similarly situated" customer and you document your reasoning for the reduced rate, you should be fine. Maybe you have another situation where you have met the rate a customer got at another bank, use things like that in your documentation. However, when we have things such as these I usually run it by our contact at the OCC to be sure I am not missing something.

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#2120432 - 03/03/17 04:00 PM Re: Loan to Insider - Match other offer? JAM
JAM Offline
100 Club
Joined: Aug 2005
Posts: 208
Thanks. We have matched rates for other customers, just not real recent. We have a hard time getting much out of our regulatory contact but still worth a try.
Last edited by JAM; 03/03/17 04:01 PM.
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#2120502 - 03/03/17 08:20 PM Re: Loan to Insider - Match other offer? JAM
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 46,630
Bloomington, IN
When it comes to Reg. O,

So if you would do have done the same thing for a "similarly situated" . . . . . .


We have matched rates for other customers, just not real recent.

How recent and why? I would be concerned if you haven't matched any rates in at least the past 24 months.
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The opinions expressed are mine and they are not to be taken as legal advice.

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