I have two questions:

1. Loans FULLY secured by a CD - are these required to be board approved? I understand that lending limits do not apply - however, i do not see an exemption from board reporting when secured by a CD.

2. Defining control of a related interest: I just want to be sure i understand this - there are two sections defining control. c)(1) Control of a company or bank means that a person directly or indirectly, or acting through or in concert with one or more persons:

(i) Owns, controls, or has the power to vote 25 percent or more of any class of voting securities of the company or bank;

(ii) Controls in any manner the election of a majority of the directors of the company or bank; or

(iii) Has the power to exercise a controlling influence over the management or policies of the company or bank.

(2) A person is presumed to have control, including the power to exercise a controlling influence over the management or policies, of a company or bank if:

(i) The person is:

(A) An executive officer or director of the company or bank; and

(B) Directly or indirectly owns, controls, or has the power to vote more than 10 percent of any class of voting securities of the company or bank; or

(ii)(A) The person directly or indirectly owns, controls, or has the power to vote more than 10 percent of any class of voting securities of the company or bank; and

(B) No other person owns, controls, or has the power to vote a greater percentage of that class of voting securities.

Why does it discuss both 10% and 25% - this is confusion and which one are we supposed to use?

Any help is appreciated -

1) If over the threshold for board approval then you are correct that there are no exemptions from the preapproval requirements.

2)You have to use both. The first definition has an "or" within it and the second has an "and".

sometimes 4 eyes are better than 2 - thank you for pointing this out.