Final Rule Easing Certain Lending Restrictions
Effective April 1, 1997
To All Member Banks and Bank Holding Companies in the Second Federal Reserve District, and Others Concerned:
The following is from a statement issued by the Board of Governors of the Federal Reserve System:
The Federal Reserve Board has announced a final amendment to Regulation O which limits how much and on what terms a bank may lend to its own insiders and insiders of its affiliates.
The final rule is effective April 1, 1997.
Under the final rule, Regulation O will not apply to extensions of credit by a bank to an executive officer or director of an affiliate, provided that the executive officer or director is not engaged in major policymaking functions of the bank and the affiliate does not account for more than 10 percent of the consolidated assets of the bank's parent holding company.
This rule is consistent with changes to the exemptive authority of the Board made by the Economic Growth and Regulatory Paperwork Reduction Act of 1996.
A copy of the amendment to Regulation O, effective April 1, 1997, as published in the Federal Register of March 20 is available as a (pdf) file. Questions on this matter may be directed to Albert J. Rubbo, Assistant Vice President at this Bank.