We have a director who will be appointed as the executive director of a charter school that has both borrowings and deposit relationships. As he definitely would meet the definition of "control" of a business, I am assuming all borrowings to this school are now subject to Reg O?

I believe this could present a Reg. O problem if the insider and his/her related interests already (before new extensions of credit) had credit outstanding at the institution in the aggregate amount of $500,000. I think that amount might vary though.

As far as interpreting the definitions of the regualtions I have been wrong before!

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.