§ 7451 Loan Concentration Limits

• •A bank or lending group can't lend more than 25% of its total money to one person or one big project.
• •This rule helps make sure the bank doesn't lose too much money if one loan goes bad.
• •The bank boss (commissioner) can sometimes make exceptions to this rule.

A small local bank has $1,000,000 in total money.

The bank can't lend more than $250,000 to one person or one big project, like building a new shopping center. If they lend $300,000 to one person and that person can't pay it back, the bank could get in trouble.