Click Cover to Read Digital Edition

AVAILABLE IN THE APP STORE
iPAD APP
iPHONE APP

UPCOMING EVENTS

 
EMERGE: The Forum on Consumer Financial Services Innovation
June 2-4
Hyatt Regency Century Plaza
Los Angeles
 
Digital Banking Summit
June 2-4
Hyatt Regency Century Plaza
Los Angeles
 
2014 RDC Summit
Sept. 30 - Oct. 2
Las Vegas
 
ATM, Debit & Prepaid Forum
October 19-22
JW Marriott Desert Ridge
Phoenix
 
Money2020
November 2-6
Aria
Las Vegas
More events >  

Share |

Print Friendly and PDF

Agencies Issue Guidance on Leveraged Lending

 

March 25 - The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System and the FDIC have jointly issued supervisory guidance on leveraged lending, which applies to all national banks, federal savings associations, and federal branches and agencies of foreign banks. This guidance was published in the Federal Register on March 22, 2013, and replaces similar guidance issued in April 2001.

Since the 2001 guidance was issued, the agencies have observed tremendous growth in the volume of leveraged credit, driven in part by demand from nonregulated investors. The pipeline of aggressively structured commitments grew rapidly, and management information systems were at times less than satisfactory. Many banks found themselves holding large pipelines of higher-risk commitments when buyer demand had diminished significantly. In addition, debt agreements frequently included features that provided limited lender protection and contained aggressive capital structures.

In light of the market’s evolution, the agencies have replaced the 2001 guidance with the updated 2013 leveraged lending guidance, which focuses on the following key areas:

This guidance is effective May 21, 2013.

Click here for the guidance in the Federal Register.


Back