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CIP - Corporate Loan Guarantors

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We have a loan to a corporation that has four guarantors, two of which happen to be corporations themselves. Are we required to perform CIP for loan guarantors? Are we going to need a corporate borrowing resolution for the two corporations that are guarantors?

Guarantors are not customers for CIP purposes. Yet, regulators consistently and logically say that if the loan is only bankable because of the guarantor(s), good underwriting would indicate that you have verified the guarantor(s)' identity. You need a resolution from the guaranteeing corporation that authorizes the signatories to do what they are doing; i.e., they are not borrowing money, they are guaranteeing a loan to another borrower.

First published on 7/20/09

First published on 07/20/2009

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