SECTION 85:25-3-43. Participation  


Latest version.
  •   Insured associations are hereby authorized to buy, sell and hold participating interests in loans subject to the following restrictions:
    (1)   Both the selling association and purchasing association must maintain satisfactory control over risk from loan participations. Each association must adopt written lending policies and procedures to govern participations and shall keep written documentation of recourse arrangements which outline the rights and obligations of each party.
    (2)   The selling association shall disclose complete and current credit information on the obligor during the term of the loan.
    (3)   The purchasing association shall perform an analysis of the credit quality and documentation for obligations to be purchased, shall analyze the value and lien status of the collateral, and shall maintain current and complete credit information on the obligor during the term of the loan.
    (4)   Failure to meet the requirements of this Section may constitute an unsafe and unsound practice.
[Source: Transferred from 625:10-5-5 (see Editor’s Note at beginning of this Chapter)]