Who are considered insiders under Regulation O?
Regulation O controls the credit extensions that member banks can offer to its “insiders.” Regulation O requires that banks report any extensions provided to insiders in their quarterly reports. Regulation O defines bank insiders as directors or trustees of a bank, executive officers, or principal shareholders.
What is an executive officer in a bank?
A Bank CEO ( Chief Executive Officer ) is the spine of the bank. Bank CEOs make decisions about the bank’s products, customers, employees, stockholders, and goals. With this constant re-evaluation of customer needs, investment options, and new technology-based products, you set financial goals for the bank.
What is the overall cap that a bank can lend to any executive officer?
Executive Officers Loans for any other purpose are permissible as long as aggregate loans to that executive officer do not exceed the higher of 2.5 percent of the bank’s unimpaired capital and surplus or $25,000, but in no event more than $100,000.
When credit is extended to an executive officer who must it be reported to?
the board of directors
Any extension of credit by a bank to any of its executive officers must be promptly reported by the executive officer to the board of directors. 12 C.F.R. § 215.5(d)(1). The report should be in writing.
Who does regulation o apply?
Although Regulation O applies by its terms to “member banks,” or institutions that are members of the Federal Reserve System, state banks that are not members of the Federal Reserve System and savings associations also are subject to the requirements in Regulation O that implement sections 22(g) and 22(h) of the …
Who does Reg O affect?
Regulation O governs any extension of credit by a member bank to an executive officer, director, or principal shareholder of that bank, of a bank holding company of which the member bank is a subsidiary, and of any other subsidiary of that bank holding company.
What is the role of executive officer?
An executive officer is a person who is principally responsible for leading all or part of an organization, although the exact nature of the role varies depending on the organization. In many militaries and police forces, an executive officer, or “XO”, is the second-in-command, reporting to the commanding officer.
How much does a bank executive make?
The Bureau of Labor Statistics shows that the average chief bank executive salary was $211,800 annually as of May 2019. They were the highest paid of all bank management occupations, which averaged $131,750 per year.
Which regulations are covered by the Fair Lending procedures?
Two different federal laws deal with discrimination in lending: the Fair Housing Act (FHAct) and the Equal Credit Opportunity Act (ECOA). These fair lending laws prohibit lenders from discriminating in credit transactions on the basis of race, color, national origin, religion, sex, and other specified grounds.
What is the purpose of Reg B?
Regulation B prohibits creditors from requesting and collecting specific personal information about an applicant that has no bearing on the applicant’s ability or willingness to repay the credit requested and could be used to discriminate against the applicant.
Are principal shareholders insiders?
Requirements of Principal Shareholders A principal shareholder is considered a “business insider” by the Securities and Exchange Commission (SEC) due to their large stake in the company, which is over 10% of voting shares.
What is preferential lending to executive directors and shareholders?
In general, the law prohibits Preferential lending by a bank to executive officers, directors, and principal shareholders of another bank when there is a correspondent account relationship between the banks, and
Where can I find the regulation of bank holding companies?
The full regulation is available on the Government Printing Office web site. Regulation O governs any extension of credit by a member bank to an executive officer, director, or principal shareholder of that bank, of a bank holding company of which the member bank is a subsidiary, and of any other subsidiary of that bank holding company.
What is the maximum amount of credit to an executive officer?
If credit is extended to an executive officer for any “other purpose,” the aggregate amount of credit must not exceed $25,000 or 2.5 percent of the bank’s capital and unimpaired surplus, whichever is higher, with the proviso that the amount of credit in any event may not exceed $100,000. 12 C.F.R. § 215.5 (c) (3).
What is Reg O of the RBI?
Regulation O governs any extension of credit by a member bank to an executive officer, director, or principal shareholder of that bank, of a bank holding company of which the member bank is a subsidiary, and of any other subsidiary…