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We have a loan request from an entity that is substantially owned by two of our board members. These two board members are also substantial owners of our bank, roughly 75%. The size of the loan is greater than $100,000 and does not fit any of the exceptions provided in Reg O. We have a total of five directors on the Board. Three of the board members are not financially interested in the borrower but one of these is related (daughter) to one of the interested borrowers. The daughter is more than 21 years of age. Provided the three directors (not owners of the borrower) approve to grant the loan, will the bank be in compliance with Reg O?
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