I have researched Regulation O and staff advisories but cannot seem to locate an answer, but my memory tells me that over the years I have read something on this point.

I understand that existing loans in place to an individual who becomes an insider by virtue of being named to the board of directors are not subject to Regulation O – that point is clear. My question is, and the regulation seems to be silent on this point is, are renewals, modifications and extensions of loans ‘grandfathered’ under Reg O subject to the requirements of Reg O? Logic, which is always dangerous to apply to a regulation, tells me that renewals, modifications and extensions of the original loan would be subject to the reg, but I cannot find anything in writing.

Any clarification is appreciated. Thank you

The answer is actually found in the definition in section 215.3 of "extension of credit":

"An extension of credit is a making or renewal of any loan, a granting of a line of credit, or an extending of credit in any manner whatsoever,...."

Although the loan when it was granted was not subject to Regulation O and its restrictions, any renewal or extension of the loan is an extension of credit in its own right, and would not be "grandfathered." The regulation requires that the loan conform to the regulatory restrictions upon renewal or extension.

John is right. For additional confirmation, here is an OCC interpretive letter to that effect: http://www.occ.gov/static/interpretations-and-precedents/apr08/int1096.pdf

Reviving this older thread to ask:
Do the grandfathered loans count toward the maximum lending limit to individual insiders?

I'm not sure how you couldn't count them. While I don't recall this being clearly addressed, most of the interpretive letters on the "grandfather" provision talk about how the grandfathered loans do apply to additional extensions of credit going forward. Therefore, you would need to count them for at least determining future extensions with other insiders. That said, someone like Randy might have a better citation in his bag of tricks.

For reference, the letter that Ted Dreyer mentioned above has moved to here: https://www.occ.gov/topics/charters-and-licensing/interpretations-and-actions/2008/int1096.pdf

Thanks Adam. They don't make this very clear, as usual