Magazine article American Banker

OCC May Continue Loan-Limit Waiver for National Banks

Magazine article American Banker

OCC May Continue Loan-Limit Waiver for National Banks

Article excerpt

The Office of the Comptroller of the Currency may extend a 3-year-old pilot program that lets some national banks exceed their normal per-borrower limits.

The program, set to expire next month, is part of an effort to enhance the attraction of the national bank charter. Thirty-eight states let state-chartered banks lend more than 15% of capital, the normal limit for national banks, to a single borrower.

The OCC pilot program lets well-capitalized national banks headquartered in those states and with high Camels ratings lend up to the state limit, but no more than 25% of capital, to a single borrower seeking small-business or one-to-four-family residential loans.

Through February, 169 national banks in 23 states had received approval to participate in the program, according to the OCC.

Barbara Grunkemeyer, the deputy controller for credit risk, said the agency was considering a three-year extension to analyze whether credit quality and capital ratios had deteriorated at participating banks.

"We wanted national banks to be on the same level as state banks," Ms. Grunkemeyer said, but 25% is "a lot of capital to lose for a small bank."

The OCC would consider expanding the program to include more types of loans if bankers submitted comments asking it to do so, she said.

Bankers and others have until May 24 to submit comments. The current program will expire June 11, though national banks approved to participate may continue to lend up to the higher limits until Sept. …

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