Details:

Publisher's site:
https://www.fdic.gov
Corporate Authors:
Federal Deposit Insurance Corporation (FDIC)
Description:
Financial institutions purchase loan participations to achieve growth and earnings goals, diversify credit risk, and deploy excess liquidity. Some institutions have successfully participated in shared credit facilities, which are arranged by bank and nonbank entities, by implementing effective due diligence and prudent credit risk management practices. However, purchasing banks' over-reliance on lead institutions has, in some instances, caused significant credit losses and contributed to bank failures, particularly for loans to out-of-territory borrowers and obligors involved in industries unfamiliar to the bank. This Advisory reminds state nonmember institutions of the importance of underwriting and administering loan participations in the same diligent manner as if they were being directly originated by the purchasing institution.
Content Notes:
Attachment included in FIL
Subject:
[+]
Lending / Investments
Dataset Download URL:
https://www.fdic.gov/news/inactive-financial-institution-letters/2012/fil12038.pdf
Format:
PDF
Release Date:
09/12/2012
Update Date:
09/12/2012
Withdrawn Date:
Not Available
Agencies Involved:
Federal Deposit Insurance Corporation (FDIC)
Fdic Employee Involved:
William R. Baxter
Source:
FDIC Website
Memorandum To:
FDIC-Supervised Banks (Commercial and Savings)
FIL Number:
FIL-38-2012
Main Document Checksum:
[+]
urn:sha256:4a65ec25a110ef1121deadf2c95c4e9f690f683fd6fea51a8d834610750b72fe
Download URL:
https://archive.fdic.gov/view/fdic/7063/fdic_7063_DS1.pdf
File Type:

Supporting Files

• No Additional Files

More +