[Code of Federal Regulations]
[Title 12, Volume 2]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 12CFR215.5]

[Page 430-431]
 
                       TITLE 12--BANKS AND BANKING
 
                   CHAPTER II--FEDERAL RESERVE SYSTEM
 
PART 215--LOANS TO EXECUTIVE OFFICERS, DIRECTORS, AND PRINCIPAL SHAREHOLDERS OF MEMBER BANKS (REGULATION O)--Table of Contents
 
Subpart A--Loans by Member Banks to Their Executive Officers, Directors, 
                       and Principal Shareholders
 
Sec. 215.5  Additional restrictions on loans to executive officers of member banks.

    The following restrictions on extensions of credit by a member bank 
to any of its executive officers apply in addition to any restrictions 
on extensions of credit by a member bank to insiders of itself or its 
affiliates set forth elsewhere in this part. The restrictions of this 
section apply only to executive officers of the member bank and not to 
executive officers of its affiliates.
    (a) No member bank may extend credit to any of its executive 
officers, and no executive officer of a member bank shall borrow from or 
otherwise become indebted to the bank, except in the amounts, for the 
purposes, and upon the conditions specified in paragraphs (c) and (d) of 
this section.
    (b) No member bank may extend credit in an aggregate amount greater 
than the amount permitted in paragraph (c)(4) of this section to a 
partnership in which one or more of the bank's executive officers are 
partners and, either individually or together, hold a majority interest. 
For the purposes of paragraph (c)(4) of this section, the

[[Page 431]]

total amount of credit extended by a member bank to such partnership is 
considered to be extended to each executive officer of the member bank 
who is a member of the partnership.
    (c) A member bank is authorized to extend credit to any executive 
officer of the bank:
    (1) In any amount to finance the education of the executive 
officer's children;
    (2) In any amount to finance or refinance the purchase, 
construction, maintenance, or improvement of a residence of the 
executive officer, provided:
    (i) The extension of credit is secured by a first lien on the 
residence and the residence is owned (or expected to be owned after the 
extension of credit) by the executive officer; and
    (ii) In the case of a refinancing, that only the amount thereof used 
to repay the original extension of credit, together with the closing 
costs of the refinancing, and any additional amount thereof used for any 
of the purposes enumerated in this paragraph (c)(2), are included within 
this category of credit;
    (3) In any amount, if the extension of credit is secured in a manner 
described in Sec. 215.4(d)(3)(i)(A) through (d)(3)(i)(C) of this part; 
and
    (4) For any other purpose not specified in paragraphs (c)(1) through 
(c)(3) of this section, if the aggregate amount of extensions of credit 
to that executive officer under this paragraph does not exceed at any 
one time the higher of 2.5 per cent of the bank's unimpaired capital and 
unimpaired surplus or $25,000, but in no event more than $100,000.
    (d) Any extension of credit by a member bank to any of its executive 
officers shall be:
    (1) Promptly reported to the member bank's board of directors;
    (2) In compliance with the requirements of Sec. 215.4(a) of this 
part;
    (3) Preceded by the submission of a detailed current financial 
statement of the executive officer; and
    (4) Made subject to the condition in writing that the extension of 
credit will, at the option of the member bank, become due and payable at 
any time that the officer is indebted to any other bank or banks in an 
aggregate amount greater than the amount specified for a category of 
credit in paragraph (c) of this section.

[Reg. O, 59 FR 8837, Feb. 24, 1994; 59 FR 37930, July 26, 1994; 60 FR 
17636, Apr. 7, 1995]