A final rule issued today by the Office of the Comptroller of the Currency will exempt certain secured loans from insider lending limits.

As of Nov. 20, national banks will be allowed to make unlimited loans to bank executives if these loans are secured by government-backed securities or segregated deposit accounts.

Insider loans guaranteed by federal agencies, such as the Small Business Administration, also are exempt from the limits, according to the OCC.

These changes are especially important for community banks, said American Bankers Association senior counsel Paul A. Smith.

"The biggest business people in town are often board members of community banks," Mr. Smith said. "They won't have to borrow from banks outside the community anymore."

The rule, published today in the Federal Register, also clarifies the differences between the insider lending rule and the loans-to-one-borrower rule.

The insider loan exemptions have already been adopted by the other bank and thrift agencies.

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