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Reg O and a Limited Partner

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Question: 
When a loan is made to a Limited Partnership and a high ranking bank officer is a limited partner, is this a trigger for Reg O and if so, how should this be documented for compliance with Reg O?
Answer: 

If this partnership qualifies as a related interest of the executive officer's under 215.2(n) and 215.2(c)(1), which it sounds like it would, then you would what to flag the loan as an insider loan for call reporting and make sure that dollar amount limitations are not exceeded, that the loan is preapproved by the board of directors (if required) and the loan does not contain any preferential terms. How that is all documented is really up to you.

First published on 11/13/2022

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