Regulatory Alerts2010-09-01
South Dakota Division of Banking Loan Participation Guidance
The South Dakota Division of Banking issued this guidance to establish risk management standards for banks engaging in loan participation transactions. The document requires institutions to implement specific loan policies, maintain rigorous underwriting and credit review processes, and ensure compliance with FAS 140 criteria for recording transfers as sales. It further mandates detailed participation agreements that address payment allocation, default handling, and agency relationship termination to mitigate legal and financial risks.
Share