Regulatory Alerts2022-08-02
Formal Loan Commitments Advisory Opinion
The Louisiana Office of Financial Institutions clarifies that binding formal loan commitments must be included in calculating a financial institution’s legal lending limit under state law, regardless of actual funding. Institutions can avoid statutory violations by structuring agreements to cap unconditional funding obligations or limit actual advances within legal thresholds. Examiners will cite apparent lending limit breaches when formally originated commitments exceed statutory caps and obligate the institution to fund beyond those limits.
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