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 WASHINGTON, March 30 /PRNewswire/ -- The four federal regulators of banks and thrifts -- the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, and the Office of Thrift Supervision -- today announced further details on the implementation of their March 10 program to increase credit availability. Today's policy statement outlines changes in the area of loan documentation.
 The strongest banks and thrifts, those with regulatory ratings of 1 or 2 and with adequate capital, will now be able to make and carry some loans to small- and medium-sized businesses and farms with only minimal documentation. The total of such loans at an institution will be limited to an amount equal to 20 percent of its total capital. Eligible banks and thrifts will be encouraged to make these based on their own best judgment as to the creditworthiness of the loans and the necessary documentation. These loans will be evaluated solely on the basis of performance and will be exempt from examiner criticism of documentation.
 Each minimal documentation loan is subject to a maximum loan size of $900,000 or 3 percent of the lending institution's total capital, whichever is less. If a borrower has multiple loans in the exempt portion of the portfolio, those loans must be aggregated before the maximum is applied. Loans to institution insiders -- executive officers, directors, and principal shareholders -- are ineligible for inclusion, as are loans that are already delinquent.
 The package also offers some relief for banks that do not qualify for the program, and for loans that are not in the exempt portion of a bank's portfolio. The policy statement also includes guidelines which provide institutions some additional flexibility in applying their documentation policies for small- and medium-sized business and farm loans without examiner criticism.
 Today's initiatives are directed at eliminating unnecessary documentation and reducing costs to lending institutions and the time it takes to respond to credit applications. OTS will soon issue a regulation to amend its current loan documentation requirements to comply with the statement. For banks, the program requires no change in existing regulations and is effective with today's release.
 The complete program is being mailed to all regulated institutions and all examiners, and additional copies are available from the agencies.
 -0- 3/30/93
 /CONTACT: Dean DeBuck of the Office of the Comptroller of the Currency, 202-874-4700/

CO: Office of the Comptroller of the Currency; Federal Deposit
 Insurance Corporation; Board of Governors of the Federal Reserve
 System; Office of Thrift Supervision ST: District of Columbia IN: FIN SU:

KD -- DC034 -- 1107 03/30/93 13:59 EST
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Publication:PR Newswire
Date:Mar 30, 1993

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