Loans to Executive Officers, Directors, and Principal Shareholders of Member Banks; Loans to Holding Companies and Affiliates

Samenvatting

The supplemental notice of proposed rulemaking (supplemental proposal) would amend the Board's Regulation O, which limits how much and on what terms a bank may lend to its own insiders and insiders of its affiliates. Under the supplemental proposal, the restrictions of Regulation O would not apply to extensions of credit by a bank to an executive officer or director of the bank's affiliate, provided that the executive officer or director was not engaged in major policymaking functions of the bank and the affiliate did not account for more than 10 percent of the consolidated assets of the bank's holding company. The supplemental proposal supersedes a similar proposal included in a proposed rule published by the Board on May 3, 1996. The supplemental proposal results from a recent change in the exemptive authority of the Board under the Economic Growth and Regulatory Paperwork Reduction Act of 1996. Other provisions of the earlier proposal have been adopted by the Board as a final rule.