Attorney Articles
Articles authored by Eric G. Baron, Esq.
- Western Independent Bankers - Published April 2016
The Risks and Rewards of Issuing Standby Letters of Credit
In the past, letter of credit transactions were the domain of large money-center banks, but today more and more small independent banks are asked to issue letters of credit for their clients. Many institutions are issuing standby letters of credit (Standby) to accommodate their customers, but also because letters of credit represent a good source of fee income. Unfortunately, many institutions will issue standby letters of credit without fully understanding how the letter of credit works and the rules that govern them. This article will explore the risks and rewards that may arise when issuing a Standby. - Western Independent Bankers - Published October 2015
SBA Lending – A Way to Expand Commercial LendingIn today’s competitive commercial lending market, a middle-market commercial lender faces the challenge of maintaining prudent credit standards while building its commercial loan portfolio. One way to achieve that balance is to share the risk with the U.S. government by participating in the loan programs administered by the U.S. Small Business Administration (SBA). Because many of the SBA loan programs promote loans to small businesses, SBA lending also helps middle-market lenders establish relationships with newer businesses as borrowers.
- Western Independent Bankers - Published July 2015
Combination of Loans for Lending Limit Purposes
The rules for combining loans will vary depending on a lender’s charter. National banks and federal savings banks are subject to lending limit regulations established by the OCC, while state-chartered institutions are subject to state laws and regulations. Some states, such as California, do not provide much guidance for determining when loans should be combined. In the absence of state guidance, many lenders look to the OCC regulations for guidance. - Western Independent Bankers - Published June 2015
Checklist for Reviewing Participation Agreements
Lenders facing stiff competition in commercial lending often look to loan participations as a way of growing their institution. The rights and obligations of a lender participating in a loan will be determined primarily by the terms and conditions of the loan participation agreement that documents the transaction. Before agreeing to purchase a participation, the participant should carefully review the participation agreement to confirm that it affords the participant continuing rights to current information about the underlying loan, as well as continuing participation in major decision-making.
