Topic: Lending Limits
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One of our customers is a governmental entity that originates large ACH transactions that exceed our legal lending limit. We currently require special approval for ACH transactions that exceed our lending limit, which can delay the transaction; is that necessary?
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We are not aware of any laws or regulations that require you to institute approval procedures for ACH transactions that exceed your institution’s legal lending limit. Your approval processes and policies on ACH transfers are risk management decisions left to your institution’s discretion. The FFIEC’s Retail Payment Systems IT Booklet has general guidance on setting…
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How do the lending limits rules apply to companies that have related owners? We have customers who own five different corporations. We are aware that each corporation is looked at separately when applying the state’s legal lending limits. However, we are unsure if Illinois’s lending limits aggregate the loans of related borrowers.
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The rules under Illinois’s basic lending limit provisions require you to treat loans made to “A” as if they were made to “B” if you relied on the credit worthiness of “B” when making loans to “A.” In such cases, the loans made to “A” must be added to the loans made to “B” when determining whether…