Section 16 of Regulation W states that a member bank must treat any of its transactions with any person as a transaction with an affiliate to the extent that the proceeds of the transaction are used for the benefit of, or transferred to, an affiliate.
We have a borrower who is purchasing a piece of farmland. The seller is an LLC who, by ownership, is an affiliate of the bank.
Would this loan have to meet the collateral requirements of Regulation W and is this the types of loans section 16 is referring to?
Thank you
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