Topic: Repurchase (Repo) Agreements
-
If we sell a loan to another bank due to our legal lending limit, can we purchase back portions of the loan without amending the related participation agreement? I know we can purchase the entire loan back, but would we be violating any laws or regulations if we purchased back only portions of the loan?
—
by
We are not aware of any laws or regulations that would prohibit a national bank from repurchasing portions of a loan originally sold pursuant to a participation agreement, provided that the purchase does not violate your institution’s current legal lending limits at the time of repurchasing and provided that the repurchase is not in violation…
-
Is it possible to perfect a customer’s interest in securities subject to a repurchase agreement under Illinois law?
—
by
We do not believe it is possible for the bank to perfect the customer’s interest in the securities purchased under the repurchase agreements because federal regulations governing sales of securities by financial institutions restrict banks from perfecting security interests over such securities under Illinois law. Federal Regulations Governing Repurchase Agreements Financial institutions selling government securities…