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#1609906 - 09/28/11 04:36 PM REG O and ACH Exposure Limits
kiemo Offline
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kiemo
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MidUS
Reg O Sec 215.3(a)(7)(Extention of Credit) states 'Any other similar transaction as a result of which a person becomes obligated to pay money...to a bank, whether the obligation arises directly or indirectly...or by any means whatsoever.'

Sounds like bank Directors that own businesses that Originate ACH entries should have to include their ACH $ exposures in the amount of total credit exposure allowed. Am I reading this correctly ? Thank you for any insight.

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#1609934 - 09/28/11 04:52 PM Re: REG O and ACH Exposure Limits [Re: kiemo]
John Burnett Offline
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John Burnett
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Cape Cod
Although there is risk involved when a bank (as ODFI) accepts ACH entries from an Originator, it's not technically considered credit risk.

I think it's a reach to include that risk as "credit" when determining total credit exposure to an insider.
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#1609940 - 09/28/11 04:54 PM Re: REG O and ACH Exposure Limits [Re: John Burnett]
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
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Many banks count ACH in total credit exposure, but not for Reg O purposes. It is a risk, not actual credit owed.
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#1610087 - 09/28/11 06:40 PM Re: REG O and ACH Exposure Limits [Re: Kathleen O. Blanchard]
kiemo Offline
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kiemo
Joined: Jan 2009
Posts: 267
MidUS
Thank you John and Kathleen B.

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