Bank LPO


Loan production offices (LPOs) may be established by state chartered banks headquartered in any state pursuant to West Virginia Code Chapter 31A, Article 8, Section 12c.

The law is intended to give state chartered banks parity with the national banks which are empowered to establish such offices under 12 CFR 7.7380; 12 U.S.C. §36. There is no application approval process to establish an LPO if your bank has a West Virginia charter. A West Virginia state chartered bank wishing to establish such an office should only submit a letter to the Commissioner of Financial Institutions stating the address of such proposed LPO and a summary of additional investment in premises and fixed assets which will be required. State the proforma total investment in premises and fixed assets as a percentage of the bank’s capital and surplus. The total proforma investments must be within the limitations of §31A-4-13.

If the bank is chartered by another state, then a license must be obtained under WV Code §31A-2-5. Refer to information for nondepository institutions by the title of Supervised Financial Institutions .

Loan production offices are only for the solicitation or origination of loans, e.g.

  1. Solicitation of loan business, including by means of advertisements disclosing the nature and limitations of the loan production office;
  2. Providing information as to loan rates and terms;
  3. Interviewing and counseling of applicants regarding loans (only), including the provision of disclosures required by regulations such as Regulation Z of the Federal Reserve Board;
  4. Aiding customers in the completion of loan applications.

It is important to note that other types of banking activities such as those enumerated below are not permitted at LPOs:

  1. The signing or accepting at the LPO of notes, security agreements, or other instruments obligating the loan customer to the bank;
  2. Delivery of loan proceeds to the customer at the LPO;
  3. Provision at the LPO of forms enabling the customer to open checking or savings accounts by mail unless your bank has a branch or main office in West Virginia;
  4. Counseling of customers at the LPO regarding savings accounts, checking accounts, use of ATMs or other bank services (apart from loans) unless your bank has a branch or main office in West Virginia;
  5. Providing information to bank customers at the LPO concerning the status of their deposit accounts unless your bank has a branch or main office in West Virginia; and
  6. Acceptance of loan payments at the West Virginia Loan Production Office.