Publications

February 18, 2010

Author: John Alan Lewis

Important new accounting rules for community banks selling loan participations went into effect on January 1, 2010. The Financial Accounting Standards Board (“FASB”) in June of 2009 adopted new guideline, Statement 166, amending Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities. The new rules apply to loan securitizations as well as loan participations. Unfortunately, some of the participation agreements we have seen over the last several weeks do not satisfy the new requirements. Lenders should spend time reviewing the bank’s “standard” participation agreement to insure that they are incompliance with the new rules.

Download this Mitchell Williams E-Brief for more detailed information.

For further questions please contact Alan Lewis at 479.464.5656 or jalewis@mwlaw.com.

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