David Baris in American Banker: Approving Loans Is a Risky Role for Bank Directors

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David Baris of BuckleySandler, LLP discusses assertions made in recent FDIC lawsuits against directors of failed banks that they are personally liable for voting to approve individual loans that went bad if the loans had deficiencies at the time of approval.

This places bank directors in the shoes of loan and credit officers, a role for which they are both unsuited and unqualified.

It may be time for bank directors to stop approving loans and instead to delegate all noninsider loan approvals to bank officers and officer loan committees.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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