Leveraged Lending: Interagency Statement on Recission of Interagency Leveraged Lending Guidance Issuances

Summary

The Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) (collectively, the agencies) are withdrawing from the "Interagency Guidance on Leveraged Lending" (2013 Guidance), dated March 21, 2013, and the "Frequently Asked Questions for Implementing March 2013 Interagency Guidance on Leveraged Lending" (2014 FAQs), dated November 7, 2014. The agencies expect banks to manage leveraged lending exposures consistent with general principles for safe and sound lending. The agencies are also rescinding their communications that transmitted these two documents.¹

Highlights

• The agencies are withdrawing from the 2013 Guidance and the 2014 FAQs on leveraged lending, as well as rescinding the communications transmitting these two documents.
• Banks that engage in leveraged lending, including purchasing a participation in a leveraged loan, are expected to manage their risks associated with leveraged lending consistent with general principles for safe and sound lending, as described further in the "Interagency Statement on OCC and FDIC Withdrawal from the Interagency Leveraged Lending Guidance Issuances."
• Examiners will examine banks' underwriting, review risk ratings, and monitor the adequacy of loan loss reserves in accordance with general principles of safe and sound lending in a manner tailored to the size, complexity, and risk of leveraged lending activities.

Further Information

Please contact Barry Mills, Director for Commercial Credit Risk Policy, at (202) 649-6220 or Joanne Phillips, Counsel, or Natalie White, Special Counsel, Chief Counsel's Office at (202) 649-5490.

James M. Gallagher
Senior Deputy Comptroller and Chief National Bank Examiner

Related Links

• Interagency Statement on OCC and FDIC Withdrawal from the Interagency Leveraged Lending Guidance Issuances (PDF)
• Comptroller's Handbook, "Commercial Loans"