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

Recent FDIC lawsuits against directors of failed banks assert 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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