We have a director who is a guarantor on a loan for someone else. It is not a related entity. For Reg. O aggregate debt purposes, would this loan need to be included? This loan is at our legal lending limit, but the director has no direct debt. The issue is that he has had some inadvertent overdrafts recently on his related entity, and we want to make sure that paying the overdraft doesn't violate Reg. O.
Who is an "insider" for purposes of Regulation O?
We have been told that according to Reg O, we must have a financial statement completed annually for any shareholder who holds 10.9% or more in our stock. I have not been able to find this requirement in Reg O. The shareholder is not a director of the bank. Could this be an SEC requirement?
Reg O - Directors (not Executive officers). Are primary residences subject to Reg O reporting for directors? Are there specifics to when they are or not be be reported such as on the mortgage system, loan side, 2nd lien or purpose like Executive officers?
For Reg. O compliance, is a Demand Clause required to be included in the Note for overdraft loans to executive officers?
We have an executive officer that currently has a 1st lien mortgage and a home equity on the same property. He also wants to purchase a lot to build a new house, this lot loan would become financed into one construction perm loan. He will eventually move into this home once the other is sold. Is this possible under Reg-O or would it be best to have this individual finance the construction of his new home at another institution? I am worried about the rule of only having one 1st lien at a time, even though this will be temporary.
Regulation O-we have an executive officer who has a first lien mortgage on his primary residence. He thought this residence was sold, and purchased another property which he mortgaged with us. The first property sale fell through so currently both properties are on the bank's books. I assume we are in violation but would like some verification.
What should be done if it is determined that there was an inadvertent violation of Reg O in which legal fees were waived for an insider, in order to remedy the situation?
Just in case anyone had doubts, regulatory burden is real. In fact, the banking industry has dealt with an average of 50 new or amended rules every year for the past ten years.