BB 93-46
BANKING ISSUANCES

Comptroller of the Currency
Administrator of National Banks
Type:  Banking Bulletin
Subject:  Interagency Policy on Small Business Loan Documentation
          (Supplement)

TO:	Chief Executive Officers of All National Banks, Federal Branches and
     Agencies, Deputy Comptrollers (Districts), District Administrators,
     District Counsels, Regional Bank Directors, Department and Division
     Heads and All Examining Personnel


Purpose: This issuance supplements Banking Bulletin 93-18, Interagency
Policy on Small Business Loan Documentation, dated April 2, 1993. Subject
to the expansion discussed below, that issuance remains in effect.

Background: The Interagency Policy Statement on Documentation of Loans,
dated March 30, 1993, allowed well- or adequately capitalized institutions
that are composite rated 1 or 2 to identify a portion of their portfolios
of loans to small- and medium-sized businesses and farms, subject to
certain limitations, to be evaluated solely on performance. Those loans
would be exempt from examiner criticism of documentation.

Revision to the Policy: Effective immediately, banks that are well- or
adequately capitalized and CAMEL rated 3, and Federal Branches and
Agencies that are AIM rated 3, will be approved as eligible for the
program on a case-by-case basis. Banks interested in the program must make
a written request to their supervisory office. Requests will be approved
or disapproved based on the supervisory office's review of several
factors, including, but not limited to: the quality of board and
management supervision, asset quality, capital adequacy, earnings quality
and capacity, and compliance with laws and regulations. The supervisory
office will notify the bank in writing of its determination within 30 days
of receipt of a request.
 
ORIGINATING OFFICE: For guidance on applying this policy, contact the
Office of the Chief National Bank Examiner in Washington, D.C. (202)
874-5170.



Donald G. Coonley
Chief National Bank Examiner

Date:  August 12, 1993