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Loan Sales and Participations
A loan participation is a sharing or selling of interests in a loan. Depository institutions use loan participations as an integral part of their lending operations. Banks may sell participations to enhance their liquidity, interest rate risk management, and capital and earnings. They may also sell participations to diversify their loan portfolio and serve the credit needs of borrowers.
Purchases of Loans in Whole or In Part—Participations (BC 181, August 1984)
Sales of 100% Loan Participations (OCC 1997-21, April 1997), Interagency Statement