Regulatory Alerts1994-01-01
Memo RM1994-26: Timing of Liability Aggregation for With Recourse Loan Assignments Under K.S.A. 9-1104
The Kansas Department of Financial Institutions issued this memo to clarify when loans sold with recourse must be aggregated into an assignor's total liability for legal lending limits under K.S.A. 9-1104. The analysis establishes that such assignments function as conditional guarantees where liability is initially secondary, becoming primary only upon specific triggers like debtor default. Consequently, the department requires that the debt be aggregated with the assignor's other liabilities at the moment the debtor misses a due payment.
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