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#2065332 - 02/22/16 07:38 PM Advisory Board - Reg O Concern?
Wyogirl Offline
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Wyogirl
Joined: Nov 2001
Posts: 713
Laramie, WY. USA
Management is discussing increasing the branch advisory boards lending approval limits to $1 million for new borrowers and $1.5 million for established customers. That means these loans would never go to the board lending committee, where our true board members are.

Does anyone see this as a Reg O issue? Walking that fine line between advisory and full board members?

Thank you,

Deb

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Lending Compliance
#2065349 - 02/22/16 07:57 PM Re: Advisory Board - Reg O Concern? Wyogirl
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
I am assuming this "advisory board" is what some of us would refer to as an Executive Loan Committee.

215.4(b)(1)(i) requires the approval of the majority of the full board of directors. The advisory board would not have the authority to approve a Reg. O loan outside the limits set in Reg. O.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#2065373 - 02/22/16 08:44 PM Re: Advisory Board - Reg O Concern? Wyogirl
Gioia Offline
Member
Joined: Sep 2014
Posts: 82
We have an advisory board. Their purpose is to give insight on the communities that they belong to, they are not Directors. We have a couple branches in more rural communities, and their expertise helps advise the bank on current trends and needs in their community. Ours does have minimal lending approval, for those situations in which it is not necessary for the loans to go to the full board but their input would be helpful in understanding a client's business. Under no circumstances would a Reg O loan go to them for approval.

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#2065390 - 02/22/16 09:11 PM Re: Advisory Board - Reg O Concern? Wyogirl
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
I think Wyo is asking whether these people cross the line and are not really "advisory" board members and get caught up in the Reg. O dragnet. If they have voting ability on loan approvals, they are no longer advisory. Whether they are actually board members, depends on other conditions.
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