A proposal by the Office of the Comptroller of the Currency to exempt certain secured loans from insider lending limits has drawn applause from bankers.
The agency in December proposed to allow national banks to make unlimited loans to bank executives if these loans are secured by government-backed securities or segregated deposit accounts. In a comment filed with the Comptroller's Office, the president of the Independent Bankers Association of America said these exemptions are especially important for community banks.
Small bank executives often own farms or small businesses, and loan limitations can restrict their access to credit, wrote Richard L. Mount, who is also president of Saratoga National Bank in California. "Unnecessary restrictions force banks to choose between lending to these local businesses and retaining the best-qualified directors and officers," he said.
In another comment letter, Marcia H. Beer, senior vice president of First Commerce Corp. in New Orleans, argued that executives receiving loans exempt from insider limits should not have to file detailed financial statements, as currently required.
The exemptions proposed by the OCC already have been adopted by the other bank and thrift regulators.