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Oregon DFCS Issues Proposed Administrative Rules

The Oregon Division of Finance and Corporate Securities (DFCS) has issued the following proposed administrative rules: OAR 441-505-3070, 441-505-3075, and 441-505-3080.  These proposed rules would adopt the approaches taken by several contiguous states and the federal government for determining when loans to more than one borrower should be aggregated against a bank's legal lending limit.  Currently, loans to more than one borrower are aggregated together when the obligation of one person "benefits" another person.  This standard may prove difficult for financial institutions to apply, because it is subject to multiple interpretations.  Instead of this vague standard, the division is proposing to adopt both the "direct benefit" and "common enterprise" tests developed by the Office of the Comptroller of the Currency (OCC) of the U.S. Treasury and adopted by several Western states.

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