Hey Little Devil, I know that you are a compliance officer in NJ - as a fellow New Jerseyite, I was wondering if you could give me a little help with the "English" version of Regulation O.

Question #1: Are "companies" of insiders able to be excluded from the "related interests" definition under Reg O if they have a certain type of collateral or additional source of income securing the loan?

Question #2: I know that loans to executive officers are excluded from Reg O if they are for their residence and secured by a first lien, however, what is the remaining limits for executive officers? Let's say, we have an executive officer and related interests of the executive officer?

Any help would be greatly appreciated!!!!

I don't know the answers to your questions, but I think you'd do better in the general forum. Reg O is not a state issue. I'm betting Little Devil cruises there too, in the event you want her to answer specifically.

Hi Starter and welcome.

Question #1 - IMHO, collateral or ability to repay does not have any effect on the definitions set forth by Reg O.

From Sec. 215.2 Definitions:

For the purposes of this subpart A, the following definitions apply unless otherwise specified:
(a) Affiliate means any company of which a member bank is a subsidiary or any other subsidiary of that company.

(b) Company means any corporation, partnership, trust (business or otherwise), association, joint venture, pool syndicate, sole proprietorship, unincorporated organization, or any other form of business entity not specifically listed herein. However, the term does not include:
(1) An insured depository institution (as defined in 12 U.S.C. 1813); or
(2) A corporation the majority of the shares of which are owned by the United States or by any State.

and,

(n) Related interest of a person means:
(1) A company that is controlled by that person; or
(2) A political or campaign committee that is controlled by that person or the funds or services of which will benefit that person.


Question #2 - I am not sure that I understand the question. Can you rephrase it?? Maybe provide an example?

You may also want to ask Mr. Hoogerhyde his thoughts.


I am also going to post this in the general forum for you!

I heard that, Maria. Trying to make people think I know what I'm talking about?

I wondered at the phrasing of Question 2 myself. I believe that your question can be answered by looking at Section 215.5 of Regulation O. That sets forth additional restrictions on loans to executive officers of banks. Read that section carefully, and it should answer your question.

Geez, you are good Steve. And people say that men have selective hearing!

Link to General Discussion forum