Administrative loan renewals and interest rate change

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Question:

I continue to get push back from our lenders to change rates when we have Administrative Renewals. Reason for an Admin Renewal may be that the customer does not have a current Tax Return or Personal Financial Statement. Our current practice, when doing an Admin Renewal, is to only extend the maturity date by 90 day and make NO other changes. Is anyone else making rate changes at the time of Admin Renewals or doing them for longer than 90? Is this a regulatory issue with commercial and/or consumer loans and if so, what regulation would we be violating?

Answer:

If the borrower is in default on a specific loan condition such as providing updated financial statements, you can call the loan or impose any other condition that you wish based on what is provided in your legal obligation. You need to sit down with your legal counsel. This is a legal matter and not a regulatory one.