Under the OCC’s standards, receiving misdirected loan payments in the mail will not cause the LPO to be considered a branch. Also, while the IDFPR has not issued written guidance on this issue, we confirmed with an IDFPR attorney that it would not view occasional misdirected loan payments as causing an LPO to be treated as a branch.

As for the other permissible and impermissible activities at an LPO, we recommend reviewing the IDFPR interpretive letter linked to below, as well as our previous Q&A on this point.

For resources related to our guidance, please see:

• OCC Activities Permissible for a National Bank (“Loan Approval and Misdirected Payments at LPOs. Loan approval and the occasional receipt of misdirected loan payments from customers may take place at a loan production office (LPO) without causing it to become a branch. OCC Interpretive Letter 902 (November 16, 2000).”)

• IDFPR Interpretive Letter 91-21 (September 4, 1991) (“Permissible activities for such LPOs include: explaining credit product features and benefits; assisting in credit application preparation; and accepting credit applications for referral to and processing at the bank. Such an LPO would not fall within the definition of a ‘branch’ and therefore would not be subject to branching restrictions (e.g., home office protection, numeric limitations, geographic limitations, etc.) unless any of the following banking functions were performed at the LPO location: approval or denial of credit applications; disbursement of loan proceeds; acceptance of loan payments; acceptance of deposits; or cashing of checks. Further, this Office does not require the filing of an application, notice, or fee by a state bank establishing an LPO.”)