CDs, Collateral, Insiders & Reg O
Answer by Andy Zavoina, BOL Guru BIO AND CONTACT INFO
Question: If an insider pledges a CD that they co-own with a family member as part of the collateral for the family member to purchase a home, is that loan subject to Reg O?
Answer: Excluding the tangible economic benefit rule or that the loan is made to this person in place of the insider, I would say no. Terms on a CD secured loan are often set as to the margin and terms anyway. There isn't much room for preferential treatment.
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