As we previously discussed, the Georgia Department of Banking and Finance has confirmed that Georgia charted banks will be able to use any of the methodologies permissible for national banks when determining credit exposure for derivatives, subject to review through the examination process as to their appropriate implementation. For those elements of the OCC methodology requiring the written approval of the OCC prior to implementation, the Department’s written approval would likewise be required prior to implementation by Georgia state-chartered banks.

Notwithstanding this broad permission, we think that most community banks will find the “Conversion Factor Matrix Method” to be

On June 19, 2013, the OCC issued a final rule (the “Rule”) updating its existing regulations on legal lending limits in response to Section 610 of the Dodd Frank Act. Section 610 amended the federal lending limits statute, (12 USC § 84) to include credit exposures arising from derivative transactions and repurchase agreements, reverse repurchase agreements, securities lending transactions, and securities borrowing transactions. The Rule also takes into account differences that existed between national banks and saving associations and preserves some of the statutory exceptions that savings associations previously enjoyed. The Rule replaces, and modifies to some extent, the Interim

On June 20, 2012,  the OCC issued an interim final rule (the “Rule”) that amends its existing regulations on legal lending limit in response to Section 610 of the Dodd Frank Act. Section 610 amended the federal lending limits statute, (12 USC § 84) to include credit exposures arising from derivative transactions and repurchase agreements, reverse repurchase agreements, securities lending transactions, and securities borrowing transactions. The Rule also takes into account differences that existed between national banks and saving associations and preserves some of the statutory exceptions that savings associations previously enjoyed. The Rule provides three different methods for

On Friday, November 5, 2010, the Georgia Department of Banking and Finance determined that the final rule being adopted to address loan renewals will not contain the requirement that the loan be a performing loan, and elected not to make any revisions to Rule 80-1-5-.01.  In addition to withdrawing the proposed rule, the Georgia DBF has affirmatively confirmed that it no longer interprets the statute as pertaining only to “performing” loans.  As we’ve previously discussed, this brings the Georgia legal lending limits in the context of a loan renewal into parity with the comparable requirements for national banks.

On Friday, October 22, 2010, the DBF announced that it was withdrawing the proposed rule as it relates to the legal lending limit for further study. Both the Georgia Bankers Association and the Community Bankers Association sent the DBF comment letters opposing the change.

Arguments against adopting the proposal were based on two points, one based on legal interpretation and the second on practicalities. The first is that the proposed rule reads into the statute something that is simply not there. If the legislature had wanted to limit the loan renewals to ones that were performing it could have

The Georgia Department of Banking and Finance announced proposed rule making on September 23, 2010 to conform DBF rules to statutory changes adopted in the 2010 legislative session.  One of those rules addresses the issues that have arisen concerning interpretation of the amendment to the Georgia legal lending limit statute. That amendment was adopted earlier this year in response to many banks finding themselves unable to renew loans due to the fact that loan renewals were treated as a new extension of credit for legal lending limit purposes and banks had suffered capital reductions making the renewal unlawful. HB

On September 23, 2010, the Georgia Department of Banking and Finance (DBF) published proposed new and amended loan-to-one-borrower and mortgage industry rules to conform DBF rules to statutory changes adopted in the 2010 legislative session.  The DBF invites comments on the rules through October 25, 2010.

The primary rule change affecting community banks is a clarification of the DBF’s interpretation of the exception from the state’s legal lending limit for the renewal and restructuring of maturing loans.

In addition, new definitions would clarify the reach of the DBF’s loan-stacking rule and the limitation applicable to loans to

On February 11, 2010, the Governor signed House Bill 926 (HB 926), an amendment to the Georgia legal lending limit statute, to permit banks to renew maturing loans without violating the legal lending limit statute. The Georgia legal lending statute is found at Ga. Code Ann.§ 7-1 -285.  The statute is supplemented by the rules adopted by the Georgia Department of Banking and Finance, specifically Rule 80-1-5-.01(12).  The amendment was proposed as a solution to a problem which many banks are currently facing due to a reduction in their capital base. At issue is the language in the Rule which