I am auditing a loan in which the amount was for a Director in the amount of $766,000. The loan was booked the day before the board approved it. Is this a Reg O violation? I know that according to 215.4 (b):
"No member bank may extend credit (which term includes granting a line of credit) to any insider of the bank or insider of its affiliates in an amount that, when aggregated with the amount of all other extensions of credit to that person and to all related interests of that person, exceeds the higher of $25,000 or 5 percent of the member bank's unimpaired capital and unimpaired surplus, unless:
(i) The extension of credit has been approved in advance by a majority of the entire board of directors of that bank; and
(ii) The interested party has abstained from participating directly or indirectly in the voting."
This would constitute a violation I am assuming in not getting prior approval. Any other considerations as well?