Handling transactions with a bank’s insiders can be tricky business – there are several important regulatory requirements to be aware of, primarily Regulations O and W. Reg. O addresses loans to insiders. Do you have a solid idea of who (and/or what) the bank’s insiders are? It can change frequently. Then you must deal with the myriad rules that apply when lending to them. Overdrafts in particular can be a thorny issue, and many banks have found themselves in trouble due to their practices.
Regulation W is, in the minds of many, the most complicated regulation out there to monitor. Reg. W (which comes from the Federal Reserve Act Sections 23A and B) contains a multitude of requirements when dealing with transactions (and not just loans) with affiliates. Keeping track of just who the bank’s affiliates are can be daunting enough. There are further collateral requirements to keep track of as well.
What You’ll Learn
- Reg. O: Who are the bank’s insiders? Detailed definitions
- Handling the holding company and affiliate insiders
- What is an “extension of credit” covered by Reg. O?
- “General” restrictions that apply to all insiders
- More specific restrictions that apply to a smaller group of insiders
- Recordkeeping and recommendations
- Reg. W: Who are the bank’s affiliates? Who is not?
- What is a “covered transaction”?
- Attribution and combination rules
- Limitations on these types of transactions
- Collateral restrictions
- Prohibitions against low-quality assets
- The “arms-length” rule
Who Should Attend
This interactive session will benefit anyone in the institution who needs to know the many rules that apply to transactions with insiders and affiliates. This could include compliance professionals, auditors, senior management, directors, holding company officers, and loan officers who may run across these types of transactions and need to know the rules.