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Sound danger handling of loan purchase tasks generally includes

Wednesday, January 13th, 2021

Sound danger handling of loan purchase tasks generally includes

Chief Executive Officers of all of the National Banks, Federal Savings Associations, and Federal Branches and Agencies; Department and Division minds; All Examining Personnel; and Other Interested Parties


Any office of this Comptroller associated with Currency (OCC) today issued this bulletin to tell banking institutions 1 of sound danger administration maxims loan that is regarding activities. 2 Commercial and retail loan purchase tasks consist of buying entire loans, loan swimming pools, loan portfolios, loan participations, or participations in syndicated loans from other banking institutions or nonbank loan providers. 3 Lending activities, including loan purchase tasks, are at the mercy of particular regulatory requirements and long-standing risk administration tips. The OCC expects banking institutions to take part in loan purchase activities in a safe and manner that is sound in conformity with relevant accounting criteria, laws and regulations, and laws. Loan purchase activities should align with banking institutions’ strategic plans and start to become supported by sound danger administration systems. 4


A bank’s loan purchase tasks should be managed regularly featuring its other financing tasks, that is, with sound risk management commensurate utilizing the bank’s size, complexity, and risk profile. This bulletin covers the topics that are following a bank’s loan purchase tasks:

Risk Handling Of Loan Buy Strategies

Loan purchase activities are long-standing banking methods that provide the legitimate business needs of this exchanging organizations plus the interest that is public. The considerable system of loan-broker channels and increased participation of nonbank loan providers have actually lead to development within the accessibility to loans for sale. Loan purchase activities can offer numerous advantageous assets to banking institutions, including diversifying portfolios, enhancing web interest margins, and supplementing natural development. (more…)