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Following Dodd-Frank mandate, the OCC broadens the applicability for limits on an exposure to one person, and streamlines how limits apply to banks and thrifts.
June 20
WASHINGTON The Office of the Comptroller of the Currency released a final rule late Thursday that extends the deadline for banks to comply with a requirement that limits credit exposure per customer.
Banks are limited in how much they can lend to an individual at one time. Under the Dodd-Frank Act, those limits must now include derivative and securities financing transactions in their calculation.
In its finalized rulemaking, the OCC mostly left a proposal last year intact, but extended the effective date to Oct. 1 from July 1.
Under the rule, total loans and extensions of credit to a person at one time cannot exceed 15% of the bank's unimpaired capital and surplus if the credit is not fully secured. If the credit is secured, it's 25% of the bank's unimpaired capital and surplus. Credit exposures from derivatives deals, repurchase agreements, reverse repurchase agreements and securities financing transactions are also now included in that limit.