OCC expands pilot program on broader lending limit

Northwestern Financial Review, Sep 15-Sep 30, 2004

The Office of the Comptroller of the Currency is expanding a pilot program that allows national banks in states that have higher lending limits for residential real estate loans or small business loans to use the higher lending limits. National banks are generally allowed to lend no more than 15 percent of their capital on an unsecured basis - plus an additional 10 percent secured by readily marketable collateral - to a single borrower.

Many states have established higher limits for the banks they charter. In June 2001, the OCC started a three-year pilot program that allowed well-run national banks to lend up to the state limit - but no more than 25 percent of capital - to single borrowers for small business and certain residential loans. The OCC is now renewing the pilot program for another three years, or until June 11, 2007, and expanding it to include agricultural loans.