88-4

September 13, 1988

Re: ________
Dear Ms. ________:
This will confirm our telephone conversation of August 10, 1988, reply to your letter of August 11, 1988, and follow up on our telephone conversation of August 25, 1988.According to my recollection and notes of our telephone conversation of August 10, 1988, you informed me that some time previously, I had advised ________ that, generally speaking, if a bank made a loan to an individual and a second loan to a corporation owned by the individual, if the proceeds of the loans were used for separate purposes, and if repayment of the loans was to come from separate sources, the loans would not be required to be aggregated under Financial Code Section 1220 for purposes of the limits set forth in Section 1221. I replied in the affirmative. Also, you told me that your client had submitted a specific proposal to the State Banking Department’s Examination Division for a ruling and that the submittal was then pending. I replied that I was not in a position to address the specific proposal and that your client would have to await a reply from the Examination Division.I am happy to confirm that what I told you in our telephone conversation of August 10, 1988 still holds. Specifically, my understanding is that, as a general rule, loans made under the circumstances described in my earlier communications with your firm would not be required to be aggregated.As I discussed with you in our telephone conversation of August 23, 1988, I am referring your letter to Assistant Deputy Superintendent James Brodie, and _______ may expect to receive a ruling on the specific case in due course.
Very truly yours,
HOWARD GOULD
Superintendent of Banks

By

JAMES F. CARRIG
Chief Counsel