Loans that were in place to the school before it became a related interest (by virtue of the director taking "control") won't be a problem yet, even if they were made on more favorable terms and even if they exceed Reg O limits. However, now that the school is a related interest, all new loans to the school as well as any change, renewal, etc. to the existing loans will be subject to Reg O. This includes aggregating the prior loans to the school when determining whether prior board approval is required on any new lending.
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Jim Bedsole, CRCM, CBA, CFSA, CAFP
My posts - my opinions