Reg. O Aggregate Debt- Inadvertent Overdrafts

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Question:

We have a director who is a guarantor on a loan for someone else. It is not a related entity. For Reg. O aggregate debt purposes, would this loan need to be included? This loan is at our legal lending limit, but the director has no direct debt. The issue is that he has had some inadvertent overdrafts recently on his related entity, and we want to make sure that paying the overdraft doesn't violate Reg. O.

Answer:

Yes, the loan that he has guaranteed is counted in his Reg. O lending limit and if that loan is at the legal lending ceiling, the payment of any overdraft for the board member or any of their other related entities would be a violation of Regulation O.