Congress enacted the Financial Institutions Regulatory and Interest Control Act in 1978. The insider lending provisions of the law were implemented as Regulation O. Historical data show that insider abuse is at the heart of many bank failures. Examiners take very seriously their mission to prevent insider abuse. They frequently cite violations of Regulation O during examinations, and often take enforcement action. Enforcement actions may take the form of civil monetary penalties , a Memorandum of […]
Category: Regulation O
DODD-FRANK CHANGES TO REGULATION O
The Dodd-Frank Act contains over 2,000 pages of law. One page buried deep within the massive law has made two changes that impact Regulation O, the regulation that limits lending to insiders. The laws upon which Regulation O is based have been changed; the regulation itself has not been changed yet. The first change expands the definition of “extension of credit,” to include extending credit to a person and having credit exposure to the person […]
THE CFPB INHERITS REGULATIONS N and O
Congress enacted section 626 of the Omnibus Appropriations Act (Omnibus Appropriations Act) on March 11, 2009 and directed the Federal Trade Commission (FTC) to commence a rulemaking proceeding within 90 days of enactment with respect to mortgage loans. On May 22, 2009, the enactment of the Credit Card Accountability Responsibility and Disclosure Act clarified the FTC’s rulemaking authority under the Omnibus Appropriations Act to specify that the FTC’s rulemaking based on its authority pursuant to the Omnibus […]