If a board of director has our standard home equity loan, that has a 10 year draw down and a 10 year payout, does this loan need to be ratified by the board of directors every 14 months?

IMO, Yes.

I'm confused... I thought that as long as the extension of credit was approved in advance by the majority of board, that the maximum line amount is used to determine the total aggregate amount and didn't need to be reviewed again???

From 215.4:

. . . Approval by the board of directors under paragraphs (b)(1) and (b)(2) of this section is not required for an extension of credit that is made pursuant to a line of credit that was approved under paragraph (b)(1) of this section within 14 months of the date of the extension of credit. . . .


If I make an advance on the HELOC you are giving me an extension of credit. If the LOC has not been approved within 14 months of that extension of credit then IMO you have a violation.

Wouldn’t board approval only be necessary if the aggregate of the directors loans required board approval? In other words if 5 percent of the bank's unimpaired capital and unimpaired surplus is over 500,000.00 the HELOC would only require a 14 month approval if the insiders aggregate is over 500,000.00, or is there something I’m missing?

The original question asked if the HELOC would need to be ratiified every 14 months, I assumed they were asking about "ratification" because the HELOC required board approval in the first place.

The 2nd question commented about it being used in the aggregate totals, again I'm assuming board approval is required.

Also the cite refers to the approval requirments of (b)(1) and (b)(2). Those sections speak to the prior approaval requirements.