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This is a big turn from the industry standards that we have been using for a long time. So, if the “agencies” are looking at this as a “triggering event” have they given any clues as to the expectations of the banks to the borrower? Are the banks to notify he borrower as if it was an increase or extension, (MIRE) to the loan, when they have been notified that the insurance premium will be added to their loan?
A new twist on forced placed flood Insurance. Since the flood insurance premium is being added to the loan; Has anyone run into any problems with How it is added to the loan. As we are technically “loaning” the borrower the premium, is it done as a debit to the loan and does that create a MIRE? Should it be added to the loan as a fee? I have never had this come up in an exam but the FDIC has more time on it’s hands now.
We have a bit of a different situation here. We have a local board at each of the community banks that we have and each one is operated as a local community bank. The main or true board is at the holding company. With that said, the Local Board is involved with the loan approval process on large lending transactions. They are aware of the liability they may have. The Board is made up of business professionals who are aware of what it requires to borrow as a small business. They also receive the training they need to make the decisions required. If the transaction is very large it would go to the official board at the holding company.
As far as stake holders in a business that is acquiring a loan that requires board approval; that person would be asked to abstain and leave the room while the loan is being review, discussed and voted on.Good information. And if you have ATM’s that take deposits you will want to take a look at Reg. CC, 229.18(c), or 1029.18 This discusses when funds will be available from deposits accepted at on and off-site ATM’s. Examples of notices can be found in Appendix C, (C-9). If your ATM’s accept deposits. In my world we have banks that do and banks that don’t.
