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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.


OCC Bulletin 2020-81, Credit Risk: Risk Management of Loan Purchase Activities
Inform banks of sound risk management principles regarding loan purchase activities.

OCC Bulletin 1997-21, Interagency Statement on Sales of 100% Loan Participations: Guidance on Sales of 100% Loan Participations
Provides guidance related to loan sales programs of the type discussed in Banco Espanol de Credito v. Security Pacific National Bank.