I am really interested to see if you have received an answer on this issue. I researched everything I could think of and could only come up with the basic purpose of the rule is to protect the bank and its fiduciary responsibilities. If you are required to exercise the demand because of a shortcoming (for lack of a better word) of the insider, then unfortunately for the co-borrower the loan has to be called. (I am assuming the demand is separate from the note, but for a joint loan it could be part of the note, couldn't it?) I am not sure what to think as to the co-signer. I didn't read the co-signer rules over again so maybe I would start there and also if co-signing on a loan falls under the covered restrictions under Reg O. I'm not sure.
Last edited by SkiDoo; 05/08/08 04:38 PM.
Good luck on finding a better answer on this and I hope if you do find an answer you share!
It's not that I take life for granted. It's only that the good won't make it. Innocence dies, while Villany Thrives.