Regulatory Alerts2016-05-16
South Dakota Division of Banking Guidance on Excluding Grain Inventories from Adverse Classification
The South Dakota Division of Banking issued guidance allowing the exclusion of grain inventory values from adverse classification in agricultural loans, aligning with recent federal regulatory practices. This exclusion is conditional upon documented formal inspections within 90 days, reconciliation of sale proceeds, and perfected security interests without conflicting liens. The directive also clarifies that these conditions apply to livestock, except for breeding livestock which allows a 180-day inspection window, while excluding highly leveraged borrowers or grain used as feed.
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