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#2250212 - 03/08/21 06:53 PM Insider Credit Card Limit (Reg O)
MJNoone Offline
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MJNoone
Joined: Dec 2010
Posts: 94
Kansas
Bank employees and executive officers have "bank credit cards" that are issued by a different financial institution for the use of bank related expenses only - no personal charges. Payments are made to the card issuing bank.

Does this meet the criteria that is described in Reg O - 215.3(b)(5)(ii) - a bank credit card plan? If so, and credit limits are more than $15,000 (say $18,000), is the credit limit (full $18,000) now considered an extension of credit for that particular insider (Executive Officer)?

(5) Indebtedness of $15,000 or less arising by reason of any general arrangement by which a bank:
(i) Acquires charge or time credit accounts; or
(ii) Makes payments to or on behalf of participants in a bank credit card plan, check credit plan, or similar open-end credit plan, provided: (A) The indebtedness does not involve prior individual clearance or approval by the bank other than for the purposes of determining authority to participate in the arrangement and compliance with any dollar limit under the arrangement; and (B) The indebtedness is incurred under terms that are not more favorable than those offered to the general public
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#2250215 - 03/08/21 07:12 PM Re: Insider Credit Card Limit (Reg O) MJNoone
rlcarey Offline
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rlcarey
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Posts: 77,216
Galveston, TX
Who is liable on the debt - your Bank or the EO and you just reimburse them for expenses?
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#2250217 - 03/08/21 07:19 PM Re: Insider Credit Card Limit (Reg O) MJNoone
MJNoone Offline
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MJNoone
Joined: Dec 2010
Posts: 94
Kansas
The bank is liable for the debt. In cases where there might be unauthorized charges, i.e. personal expenses charged to the card, the bank expects the EO/employee to pay the charges.
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#2250303 - 03/10/21 02:33 PM Re: Insider Credit Card Limit (Reg O) MJNoone
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 77,216
Galveston, TX
Sorry - for the delay. I was trying to post a link the other day and links were not working correctly on BOL due to a recent upgrade, but I believe it has been fixed.

While this advisory opinion is really not on point to your specific question, it does indicate that the card limit of $16,000 in this question falls outside of the exclusion for being considered an extension of credit and the entire amount would be considered and not just the amount over $15,000.

OK links are still not working - trying this one..

www.fdic.gov/regulations/laws/rules/4000-9430.html
Last edited by rlcarey; 03/10/21 02:36 PM. Reason: Still not working
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#2250304 - 03/10/21 02:49 PM Re: Insider Credit Card Limit (Reg O) MJNoone
MJNoone Offline
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MJNoone
Joined: Dec 2010
Posts: 94
Kansas
Thank you for the clarification Randy!!
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