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OCC Bulletin: Credit Risk: Risk Management of Loan Purchase Activities


  • A bank's loan purchase activities should be handled consistently with its other lending activities, that is, with sound risk management commensurate with the bank's size, complexity, and risk profile. This bulletin covers the following topics regarding a bank's loan purchase activities:

    • Strategic plan and risk appetite
    • Lending policies and procedures
    • Credit administration
      • Due diligence and independent credit analysis.
      • Additional considerations for loan portfolio and pool purchases
      • Recourse arrangements

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