Circular
Board Approves Interim Rule on Section 601 of Financial Services Regulatory Relief Act of 2006, Invites Public Comment
December 7, 2006
Circular No. 11828

To All Depository Institutions and Others Concerned
in the Second Federal Reserve District:

The Federal Reserve Board has announced the approval of, and invited public comment on, an interim rule that would implement section 601 of the Financial Services Regulatory Relief Act of 2006, which eliminated several statutory reporting and disclosure requirements relating to insider lending by insured depository institutions. The Board proposed and supported eliminating these statutory reporting and disclosure provisions because the federal banking agencies have not found them particularly useful in monitoring insider lending or preventing insider abuse.

The interim rule amends the Board's Regulation O (12 CFR part 215) to reflect the elimination of these reporting and disclosure requirements. Regulation O implements statutory restrictions on the ability of insured depository institutions to extend credit to their executive officers, directors, principal shareholders, and to related interests of such persons (insiders). The interim rule does not alter the substantive restrictions on loans by insured depository institutions to their insiders or to insiders of their correspondent banks.

Section 601 of the act became effective on October 13, 2006. The interim rule is effective immediately upon publication in the Federal Register. The Board is seeking public comment on the rule for a 30-day period.

See the press release and Board’s notice for full details.

Press release OFFSITE
Board’s notice OFFSITE PDF

Contact:
Public Information
general.info@ny.frb.org
(212) 720-6130