Insider Activities

12 USC 1972(2)

Section 1972(2) prohibits a bank and its correspondent bank from making preferential loans and loans that involve more than the normal risk of repayment or present other unfavorable terms to an insider of the other bank. It also prohibits a bank from opening a correspondent account at another bank where either bank has outstanding a preferential loan, or a loan that involves more than the normal risk of repayment or presents other unfavorable features, to an insider of the other.

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