On November 6, 2015, the Federal Deposit Insurance Corporation (FDIC) issued Financial Institution Letter 49-2015 (FIL-49-2015), Advisory on Effective Risk Management Practices of Purchased Loans and Purchased Loan Participations, to supplement a previously issued Advisory from 2012, FDIC Advisory on Effective Credit Risk Management Practices for Purchased Loan Participations (FIL-38-2012). The updated guidance expands its advisory to purchased loans as well as loan participations and reminds institutions that effective risk management in this area includes underwriting and administering such purchases as if the loans were originated by the purchasing institution. Supervised institutions are encouraged not to rely on an originating institution or nonbank third party to perform the risk management on such loans.

FIL-49-2015, including the 2012 guidance issued through FIL-38-2012, can be found at: https://fdic.gov/news/news/financial/2015/fil15049.html.