Regulatory Alerts2002-01-01
Legal Lending Limit; Loans to Corporate Groups
The Office of the State Bank Commissioner issued Regulatory Mailing RM2002-2 to clarify the application of K.S.A. 9-1104(f)(4) regarding loans to corporate groups. The memorandum mandates that aggregate loans to a borrower and its subsidiaries, defined as entities where the borrower owns more than 50 percent of voting interests, must not exceed 50 percent of the bank's capital. This aggregate cap applies regardless of direct benefit or common enterprise, while loans to entities failing this ownership test are only combined if those specific tests are met.
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