Revisions to North Carolina Banking Code Affect Board Responsibility for Loan Approvals

July 24, 2012

by: Michael Shumaker

The board of directors and its loan committee play critical roles in formulating and supervising a bank’s risk management policies, particularly with regard to a bank’s lending function. However, as we have recently noted, while all bank directors must be involved in the loan approval process and take seriously their significant responsibilities as bank directors, there continues to be debate regarding the role of bank directors in the review and approval of loans.

Until the revision of the North Carolina Banking Code (previously codified at Chapter 53 of the General Statutes of North Carolina), which

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