Commercial & Industrial Lending

Laws and Regulations

Key laws and regulations that pertain to FDIC-supervised institutions; note that other laws and regulations also may apply.

• Appendix A to Part 364 — Interagency Guidelines Establishing Standards for Safety and Soundness provides operational and managerial standards for safety and soundness to include asset quality and asset growth
• Section 337.2 — Standby Letters of Credit discusses the calculation of legal lending limitations, including loans to any one borrower, loans to affiliates of the bank, or aggregate loans
• Section 337.3 and Federal Reserve Board Regulation O address extensions of credit from an institution to its executive officers, directors, and principal shareholders
• Part 347 — International Banking discusses requirements for institutions to engage in foreign financial activities
• Federal Reserve Board Regulation W restricts certain transactions between banks and their affiliates

Supervisory Resources

Frequently asked questions, advisories, statements of policy, and other information issued by the FDIC alone, or on an interagency basis, provided to promote safe-and-sound operations.

• Risk Management Manual of Examination Policies
  • Section 3.1 — Asset Quality describes areas of consideration for assigning the asset quality rating and defines each rating
  • Section 3.2 — Loans describes the review process for evaluating lending policies and credit administration practices, as well as their effectiveness to maintain loan quality and mitigate loss
  • Section 3.8 — Off-balance Sheet Activities describes the review process for items such as loan commitments, letters of credit, and revolving facilities
• FDIC Advisory on Effective Risk Management Practices for Purchased Loans and Purchased Loan Participations discusses the importance of underwriting and administering loan purchases and participations as if they were being directly originated by the purchasing institution
• Interagency Guidance on Leveraged Lending addresses risk management practices including underwriting, enterprise value, stress-testing and pipeline portfolio management
• Frequently Asked Questions on Leveraged Lending provides additional information on the interagency guidance on leverage lending
• Interagency Supervisory Guidance on Counterparty Credit Risk (CCR) Management outlines sound practices for an effective CCR management framework
• Underwriting Standards for Small Business Loans Originated Under the Small Business Lending Fund (SBLF) Program provides standards for lending conducted under the SBLF Program which was created pursuant to the Small Business Jobs Act of 2010
• Interagency Statement on Sound Practices Concerning Elevated Risk for Complex Structured Finance Activities describes internal controls and risk management practices to address potentially heightened risks from these activities
• Working with Borrowers
  • Joint Statement on Additional Loan Accommodations Related to COVID-19 provides risk management and consumer protection principles to consider while working with borrowers for loans nearing the end of initial accommodation periods
  • Revised Interagency Statement on Loan Modifications by Financial Institutions Working with Customers Affected by the Coronavirus encourages the activity and provides supervisory views on regulatory reporting of past due and nonaccrual loans, and troubled debt restructurings
  • Responsible Small-Dollar Lending to Consumers and Small Businesses in Response to COVID-19 encourages financial institutions to offer small-dollar loans in a manner that provides fair treatment of consumers and is consistent with safe-and-sound practices
  • Frequently Asked Questions on Coronavirus Impact address a variety of issues that may arise as financial institutions work with customers and communities
  • Interagency Statement on Meeting the Credit Needs of Creditworthy Small Business Borrowers provides a supervisory perspective on prudent lending to small businesses
  • Interagency Statement on Meeting the Needs of Creditworthy Borrowers provides a supervisory perspective on providing credit to businesses, consumers, and other creditworthy borrowers
  • Guidance Addressing Certain Issues Related to Troubled Debt Restructurings provides insight into the accounting treatment and regulatory credit risk grade or classification of commercial and residential real estate loans that have undergone troubled debt restructurings
  • Interagency Policy Statement on Documentation for Loans to Small- and Medium-Sized Businesses and Farms outlines steps taken to correct potential misunderstanding of regulatory requirements for lending to creditworthy small- and medium-sized businesses and farms

Other Resources

Supplemental information and guidance related to safe-and-sound banking operations.

• FDIC's Supervisory Insights — Fall 2019 article, “Leveraged Lending: Evolution, Growth and Heightened Risk”
• FDIC's Supervisory Insights — Summer 2011 article, “From the Examiner’s Desk: SBA Lending, Insights for Lenders and Examiners”