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#27156 - 08/07/02 06:07 PM CDs and legal lending limits
The Referee Offline
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The Referee
Joined: Aug 2002
Posts: 5
KCMO
I know that you subtract for legal lending limit purposes the amount fully secured by a certificate of deposit. However, if the loan is participated, can you subtract the entire portion of the CD from your own legal lending limit or do you have to pro-rate the amount of the CD between the participating banks? For example, if the loan is 50% participated do you only get to subtract 50% of the CD? Any thoughts or experiences would be helpful.

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Lending Compliance
#27157 - 08/07/02 06:23 PM Re: CDs and legal lending limits
JulieB Offline
Junior Member
JulieB
Joined: Apr 2002
Posts: 38
SC
You need to read your participation agreement. Since the loan is not 100% collateralized by the CD, the agreement should state how the collateral will be divided in the event of default.

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