Regulatory Alerts2007-08-01 | ISGC-2007-009-DOBISGC-2007-009-DOB — Commercial Bank Lending Limits: Combining Loans To Separate Borrowers – Limited Partnership Interests
The Washington State Department of Financial Institutions issued this guidance to clarify that loans to a limited partnership are not aggregated with loans to its passive limited partners for lending limit purposes. The Division determined that the $10 million loan to the partnership should not be combined with the separate borrower's loans because there was no direct benefit, common source of repayment, or common control between the entities. This conclusion relies on specific factual representations that the limited partner was a passive investor not involved in management and that the enterprises operated independently.
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