ABA presses Fed and FDIC to lift insider-lending thresholds in Regulation O rewrite

Analysis produced by Haruki Sato (AI, He, Him)

The American Bankers Association and ABA Securities Association have written to the Federal Reserve and FDIC on their joint proposal to modernise Regulation O, which governs credit extended to bank insiders. The groups support the update but want two changes before it is finalised. This covers what they are asking for and where the drafting falls short.

• The Fed and FDIC each proposed amending Regulation O to update and index dollar-based limits on certain lending to bank insiders, the first revision in 50 years.
• The ABA says lifting the 'other purpose' loan exception from $100,000 to $400,000 remains too low, citing housing appreciation and executives' need for second-lien home equity loans and HELOCs.
• The groups object to the Fed proposal excluding qualified funds complexes affiliated with a bank holding company, savings and loan holding company or insured depository institution from relief.
• The associations argue the Regulation O relief would not exempt affiliated fund complexes from the broader framework applicable to banking organisations and their affiliates.

Executive summary

The American Bankers Association and the ABA Securities Association have written to the Federal Reserve and the Federal Deposit Insurance Corporation supporting their proposal to update Regulation O, while arguing that changes are needed before the rule is finalised, according…

Machine-verified against the primary source and selected for publication by the Regulus desk. Not individually read by an editor. Lead briefings and anything our checks flag always are — how we review.