The OCC and FDIC announced they are rescinding their March 2013 guidance on leveraged lending and the November 2014 frequently asked questions on implementing the guidance.
Details: The agencies said they expect banks to manage leveraged lending exposures consistent with general principles for safe and sound lending.
Background: According to the agencies:
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Leveraged lending provides a wide range of businesses, including those that are highly indebted or highly leveraged or that have low obligor ratings, with access to capital for business transformations.
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The 2013 guidance and 2014 FAQs were overly restrictive and impeded banks’ application to leveraged lending of the risk management principles that guide their other business decisions.