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Reg. O and aggregate debt

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  • #6042
    Mary Frances
    Participant

    We have a loan subject to Reg. O where the Reg. O person is only guarantying a certain amount of the total loan. In order to calculate the aggregate debt do we count the full loan amount or just the amount being guaranteed?

    #6054
    rcooper
    Keymaster

    12 CFR 215.3(a)(7) states: a) An extension of credit is a making or renewal of any loan, a granting of a line of credit, or an extending of credit in any manner whatsoever, and includes:(7) Any other similar transaction as a result of which a person becomes obligated to pay money (or its equivalent) to a bank, whether the obligation arises directly or indirectly, or because of an endorsement on an obligation or otherwise, or by any means whatsoever.

    Based on this my opinion is that the calculation would be based on the amount the insider would be obligated to pay.

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