Does anyone know if it's okay to give free checks to insiders? All of our other employees receive free checks with their checking account.

Deposit accounts are not covered under Reg O. With that said, even if it was a loan discount, as long as the benefit is available to all employees, it can be available to insiders also without a problem.

Thanks for your help.

So if Reg O doesn't apply to demand accounts, what about NSF fees, return item charges, ancillary fees? Should any of these be waived for insiders?

NSF fees cannot be waived for executive officers. Other than that, you can waive other types of deposit fees all you want. I wouldn't necessarily suggest it however. The regulators still look at this as insider abuse unless done at a level that's availabe to all customers with similar relationships.

A related caution, not specific to Reg. O, are deposit rates at 12 U.S.C. Sec. 376.

Sec. 376 [Federal Reserve Act, Sec. 22] No member bank shall pay to any director, officer, attorney, or employee a greater rate of interest on the deposits of such director, officer, attorney, or employee than that paid to other depositors on similar deposits with such member bank.

You cannot waive OD fees for Directors as well as Executive Officers.

Thanks for clarifying, I was thinking insiders and typed executive officers.

Does anyone know what "major policymaking decisions" means in the definition of executive officer in Regulation O. Do you think a compliance officer or an internal auditor would fall within that definition? Thanks!

The compliance officer - possible - it depends on your structure. The auditor - I would say never. How can the auditor remain independant if they are in a major policymaking position. Normally it is limited to CEO, President, CFO, COO, CCO, etc.

The compliance office in our institution would only be responsible for assisting in the development of policies and procedures and reviewing those procedures for compliance. Our CEO believes that an examiner told him that an internal auditor would be considered an insider and thus subject to the requirements of Reg. O. I don't believe this is correct. If that is the case, then it makes me wonder why the examiners have never asked for any of the reporting information required under reg. o for executive officers. Thanks for your reply.

I should have said " for the internal auditor". In addition, as far as I know, the compliance officer/internal auditor in our institution is not considered "executive officer" in any sense of the term.

Don't forget that the board of directors can, by specific board resolution, include and exclude specific officers from the definition of "executive officer" for the purposes of Regulation O. Examiners, however, look at the actual responsibilities and authority of specific officers when evaluating any questionable relationship or transactions. The resolution will be one piece of the puzzle, but won't "trump" the actual determination that an individual has actual policymaking authority.

Remember also that a person need not have an officer title to rise to the level of an executive officer under Reg. O standards.

Are the Board of Directors required to have any compliance / other annual training (other than Reg 0 & BSA)?
Thanks.

No. We inform them of the training that the rest of the employees are required to complete, but the directors are not required to complete the training also.

Although training for the Board on other regulations may not be required by the regulation itself, we've been told by the regulators (FDIC in our case) they want to see it as a "best banking practice". If the Board is responsible for the compliance program of the bank, they should know what they are responsible for.