Is it sufficient for a note to an executive officer to contain only a payment term that notes "On Demand" or should the note specifically contain the language that states that the note may become due and payable if the officer becomes indebted to any other banks in an amount allowable by the regulation?

Unless it is the bank's intent that the loan be payable on demand (for any reason), the specific language is needed, either in the note or an addendum signed by the obligors.

Thank you for your response. Is there a citation to support this?

http://www.bankersonline.com/regs/215/215-5.html

See 215.5(d)(4).

Made subject to the condition in writing .....

I have another question about the due and payable language in 215.5(d)(4), please.

Is the due and payable clause required in a note for a loan to an executive officer's related interest, so a company that the executive officer controls? Or is the due and payable language only required when the loan is made directly to the executive officer?

Thank you.

I believe its Executive Officer and related entities

Update: I reached out to the ABA for clarification as well. The following is the response I received:

"As the section indicates the provisions apply to loans made “to” an executive officer, as compared to an ‘insider’ that by definition includes their related interests (see 215.2(h)) nor by specific reference to their ‘related interests’ (e.g., see 215.9(b)(1)), the requirements under 215.5 are not applicable to loans to other than the covered person(s) identified. See also 22(g) and (h) in the Federal Reserve Act, implemented by 12 USC 375a and 375b respectively."