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Reply To: Reg O

#34654
jholzknecht
Keymaster

You have not provided the information needed to determine if your bank is in compliance with Regulation O.

Let’s begin with an observation. Your scenario appears to involve a related interest of two of your directors. Your question mentions a loan size of $100,000 and exceptions. That language arises when discussing loans to an executive officer, which does not appear to be the case with your transaction.

Your transaction may be subject to several major rules contained in Regulation O.
* – Transactions with insiders cannot be done on preferential terms. You did not list the terms of the transaction.
* – When loans exceed a certain threshold then subsequent loans must receive prior approval. You did not provide information about the transaction amount or the amount of total debt of the borrower.
* – There is a lending limit for transactions with an insider. You did not provide information about the transaction amount or the amount of total debt of the borrower.

With the levels of ownership mentioned in your question this may also be a transaction with an affiliate, which is subject to additional limits and restrictions under Section 23a of the Federal Reserve Act.