Newenglanddeac
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These so-called "insider loans", while perfectly legal, are heavily regulated.
“The banks argue this is an opportunity for the bank to have a strong loan on the books,’ says Emory University finance professor Rohan Ganduri.
Ganduri says bank loans to insiders, like Kemp, are governed by Federal Reserve laws. He says some bankers like making these loans to wealthy board members and shareholders since they're good credit risks and wouldn't want to harm the bank. But others worry about insider loans for one main reason.
“There are potential conflicts of interests. The insiders can treat these loans as a private piggy bank,” says
Ganduri says the Federal reserve sets strict requirements that loans be on the same terms a bank would give any other borrower. In short: no special terms or advantages.
So, we asked Brian Kemp's campaign staff to disclose the terms of his insider loans, to see if he was treated just like any other customer. They refused to share the information.
“The banks argue this is an opportunity for the bank to have a strong loan on the books,’ says Emory University finance professor Rohan Ganduri.
Ganduri says bank loans to insiders, like Kemp, are governed by Federal Reserve laws. He says some bankers like making these loans to wealthy board members and shareholders since they're good credit risks and wouldn't want to harm the bank. But others worry about insider loans for one main reason.
“There are potential conflicts of interests. The insiders can treat these loans as a private piggy bank,” says
Ganduri says the Federal reserve sets strict requirements that loans be on the same terms a bank would give any other borrower. In short: no special terms or advantages.
So, we asked Brian Kemp's campaign staff to disclose the terms of his insider loans, to see if he was treated just like any other customer. They refused to share the information.