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Our bank is considering opening a Loan Production Office in another area, has anyone else done this and do you know where can I go to get the best information for the required Compliance? Have you had any issues that we could avoid?
I do not have experience opening a loan production office (LPO). Generally notice to your federal regulator, and if you are a state-chartered financial institution your state regulator, is required.
You may encounter some issues on the CRA front. Often times a LPO is located outside of your CRA assessment area. Every loan made outside of your assessment area has a bit of a negative impact on your CRA performance. Watch the numbers. If the LPO is generating a good volume of loans you may want to redraw your assessment area to include at least a portion of the area in which the LPO is located.
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