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Bank Director Revealing HImself as Such

Under Reg O, must a director disclose his role as a director of another bank as a related interest, even if this bank is outside of the metropolitan statistical area of the bank in which he is filling the questionnaire?

Answer from Patricia:You did not state why the other financial intuition was requiring completion of a questionnaire. If the director is looking to become a member of that board, this seems like not only a reasonable query, but also one that the federal regulators would want to see as part of a due diligence process.

Whether or not the financial institution is located within the same MSA is a moot point in relation to Reg. O. Regulation O does not require disclosure of the director's role at an unrelated financial institution.


Answer from Andy:The question may be asked because of Reg O restrictions with correspondent banks. The old Section 215.20 requirements of Reg O are gone, but Section 215.1(b)(4) still says Extensions of credit made to an executive officer, director, or principal shareholder of a bank (or to a related interest of such person) by a correspondent bank also are subject to restrictions set forth in 12 U.S.C. 1972(2).

First published on 8/02/10

First published on 08/02/2010

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