Regulatory Alerts2009-01-01
Legal Lending Limit Combination Rules and Common Enterprise Determination
The Office of the State Bank Commissioner clarifies that loans to non-affiliated borrowers must be aggregated for legal lending limit purposes when their expected repayment sources are pooled through a third-party or general account. Banks must actively monitor payment collection structures and maintain precise records proving that debtor funds are directly applied to specific obligations, as failure to do so will result in examination staff treating all pooled payments as a single repayment source. This aggregation requirement aims to reduce institutional credit risk and prevent misallocated payments from obscuring the true financial condition of borrowers.
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