Hello. Are there any compliance issues w/ paying a commercial LOC payment from the LOC itself? Thanks.

I can only suggest that a pattern of allowing such transactions might be considered an unsafe or unsound banking practice, and recurring use ought to cause the lender to scrutinize the borrower for potential loan classification.

This really isn't a compliance issue but a credit risk issue. As a former examiner, I participated on an exam of a bank that allowed this practice - the bank was closed within a month of the completion of the exam. If the LOC payments can only be made from the line itself due to a well-defined and limited seasonal need (followed by a true repayment period), then the structure of the credit is incorrect. Otherwise, I can think of no reason to allow this practice.