When opening a Loan Production Office is it a violation to dispurse funds from a loan at the loan production office. Should the funds be dispursed at a branch office?

This would be a state specific issue.

As an example, (courtesy of Autumn)

An LPO is not a branch of the bank and cannot, therefore, issue proceeds. The Kentucky DFI told me that a cashier's check issued at closing would be acceptable as long as it wasn't prepared at the LPO.

You should be able to find other discussions by doing a search on LPO or Loan Production Offices.

In Texas, loan proceeds cannot be disbursed from the LPO.