Reg O Compliance and Executive Officers (2024)

FAQs

Reg O Compliance and Executive Officers? ›

Regulation O governs any extension of credit by a member bank to an executive officer, director, or principal shareholder of that bank, of a bank holding company of which the member bank is a subsidiary, and of any other subsidiary of that bank holding company.

Executive Officers

Loans for any other purpose are permissible as long as aggregate loans to that executive officer do not exceed the higher of 2.5 percent of the bank's unimpaired capital and surplus or $25,000, but in no event more than $100,000.

The term insider has a special definition for the purposes of Regulation O. A Regulation O insider is a principal shareholder,5 an executive officer,6 a director, or a related interest of any of these persons.

2360 , provided that: "An executive officer or director of an insured depository institution, a bank holding company, or a savings and loan holding company, the shares of which are not publicly traded, shall report annually to the board of directors of the institution or holding company the outstanding amount of any ...

Moreover, payment of overdrafts of directors or executive officers is generally prohibited unless part of a written, preauthorized interest bearing, extension of credit plan or by transfer of funds from another account at the bank.

The term executive officer, when used with reference to a registrant, means its president, any vice president of the registrant in charge of a principal business unit, division or function (such as sales, administration or finance), any other officer who performs a policy making function or any other person who ...

Section 337.3 of the FDIC's rules and regulations places a limit of $100,000 on loans that a state nonmember bank can make to its executive officers for purposes other than an education or a hone, such as commercial loans, farm loans and other types of consumer loans.

Regulation O regulates the credit extensions that member banks can offer to their "insiders." Regulation O requires that banks report any extensions provided to insiders in their quarterly reports. Regulation O defines bank insiders as directors or trustees of a bank, executive officers, or principal shareholders.

While all employees of a firm are generally considered insiders, courts have been known to classify some investors, if they own a large enough percentage of the company, as “insiders” even if they do not have regular access to corporate information.

Politicians with access to government decisions regarding finance and the economy can be considered insiders. Insiders within the company can include a CEO, board member, or employee of a publicly traded company.

What is the penalty for violating reg. O? ›

Persons who violate Regulation O could face fines of up to $10,000 per day for each day the violation persists. So, the correct answer is option b. $10,000.

Definition of “Loan or Extension of Credit”

Under part 32, renewals generally are not considered to be an extension of credit if the bank exercises reasonable efforts, consistent with safe and sound banking practices, to bring the loan into conformance with the lending limit.

The board of directors is ultimately responsible for the bank's BSA/AML compliance and should provide oversight for senior management and the BSA compliance officer in the implementation of the bank's board-approved BSA/AML compliance program.

Regulation O presumes that the chairman of the board, the presi- dent, every vice president, the cashier, the secretary and the treasurer are executive officers, but any of these officers can be taken out of the definition of “executive officer” if the employer of the officer excludes him or her, by resolution of its ...

Part 215.4(e)(2) says the prohibition in paragraph (e)(1) of this section does not apply to a payment of an inadvertent overdraft on an account in an aggregate amount of $1,000 or less, provided, and this is the fine print, provided that number one, the account is not overdrawn for more than five business days and the ...

Since you're using money from your account—and not borrowing money like you would with credit—an overdraft doesn't appear on your credit report. So it shouldn't affect your credit scores. However, there could be negative effects on your credit scores if you don't resolve the overdraft.

A PRESIDENT CANNOT . . .

declare war. decide how federal money will be spent. interpret laws. choose Cabinet members or Supreme Court Justices without Senate approval.

At the federal level, the president of the United States can serve a maximum of two four-year terms, limited by the Twenty-second Amendment to the United States Constitution. Some state government offices are also term-limited, including executive, legislative, and judicial offices.

The court said that presidents may not speak with candor when discussing important matters if they thought their statements would eventually be made public. Deliberative process: This aspect is also based on the idea that “frank discussion” requires keeping communications private.

What Is Regulation O? Regulation O is a Federal Reserve regulation that places limits and stipulations on the credit extensions a member bank can offer to its executive officers, principal shareholders, and directors.