Regulatory Alerts2010-06-08
South Dakota Division of Banking Guidance on Financial Accounting Standard 166
The South Dakota Division of Banking issued this memorandum to clarify the impact of Financial Accounting Standard 166 on state-chartered banks. The guidance mandates that participations sold after January 1, 2010, must be sold on a pro-rata basis to qualify as participating interests for balance sheet derecognition. It further explains that non-pro-rata participations remain on the bank’s balance sheet as secured borrowings and are aggregated toward the bank’s legal lending limit, potentially affecting capital and lending limit relief.
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