Reg O

Front 1

Control of a company/bank

Back 1

• Owns/controls/pwr to vote 25% any class voting stock
• Controls election of majority of directors OR
• Controlling influence over mgmt or policies

Front 2

Presumed to have control if...

Back 2

• Executive officer AND owns/controls/pwr to vote 10% any class voting stock

or

• Owns/controls/pwr to vote 10% class voting stock AND no other person has greater percentage of that class stock

Front 3

Director/exec. officer of affiliate counts if...

Back 3

Affiliate controls bank, OR

Assets of affiliate are 10% of consolidated assets of company that controls bank and is not controlled by any other company

Front 4

Principal shareholder

Back 4

Person or acting in concert w/ more persons owns 10% any class voting securities

Does not include parent companies

Front 5

Related interest of a person

Back 5

Company controlled by that person

Front 6

Unimpaired capital and surplus (Reg O capital)

Back 6

Tier 1 + Tier 2 + rest of ALLL not allowed in Tier 2

Front 7

Reg O individual lending limit

Back 7

15% of Reg O capital (unsecured loans)
25% of Reg O capital (secured loans)

secured by readily marketable collateral w/ FV at least equal to amt of loan

Front 8

Prior approval limit per insider (and related interests)

Back 8

• Higher of $25,000 or 5% of Reg O capital

or

• $500,000

Interested party must abstain from voting

Front 9

Aggregate lending limit to all insiders

Back 9

100% of Reg O capital

Front 10

Overdrafts cannot be paid to director/EO unless...

Back 10

Made in accordance with a written, preauthorized, interest-bearing extension of credit OR agreement to transfer funds from another account OR inadvertent overdrafts (as long as they are charged same fee as customers)

Front 11

Inadvertent overdrafts

Back 11

$1,000 or less AND account not overdrawn more than 5 business days AND charged same fee as other customer

Front 12

Executive Officer (EO)

Back 12

Participates/has authority to in major policymaking functions, unless officer is excluded by board resolution and doesn't actually participate.

Presumed - Chairman of Board, president, every VP, cashier, secretary, and treasurer.

Front 13

Additional limitations for EOs of the bank (not EOs of any affiliates):

aka: 'Other purpose' limitation from Part 337

Back 13

Aggregate amt of extensions of credit to EO cannot exceed higher of 2.5% of Reg O capital, or $25,000, but never more than $100,000.

Must provide current financials, be promptly reported, and substantially same terms as others, no more than normal risk, etc.

(amt extended to partnerships of EOs where EO has majority interest, is considered to be extended to ea. EO in partnership)

Front 14

Exceptions for limitations on loans to EOs

Back 14

Any amount ...

• to finance children's education
• purchase/maintenance/improvement of residence (1st lien)
• fully secured guaranteed US Govt, deposit accts, etc.

Front 15

Loans to a director of an affiliate exempt as long as:

Back 15

• Director is excluded by resolution from participation in policymaking and doesn't actuall participate,
• Affiliate doesn't control bank,
• Assets of affiliate are not 10% or more of consolidated assets of company that controls the bank and is not controlled by any other company, AND
• Director is not otherwise subject to prohibitions

Front 16

Recordkeeping requirements:

Back 16

Bank & affiliates must maintain records necessary for compliance

• Identify insiders through annual survey
• Maintain records of all loans to insiders, terms & amounts