Question of the Week

  • QUESTION: Is the director of an affiliate bound by the extension of credit requirements of Regulation O?


    Regulation O states:

    Extensions of credit to a director of an affiliate of a bank are not subject to sections:

    • 215.4 “General Prohibitions”,
    • 215.6 “Prohibitions on knowingly receiving unauthorized extensions of credit”, and
    • 215.8 “Records of member banks”

    If, the director of the affiliate is excluded, by resolution of the board of directors or by the bylaws of the bank, from participation in major policy making functions of the bank, and the director does not actually participate in such functions.

    Reference: Regulation O: 12 CFR 215.2(d)(2).


  • QUESTION: Does the prohibition, within Regulation O, to pay an overdraft of an executive officer or director apply to an inadvertent overdraft?


    The prohibition against paying an overdraft of an executive officer or director of the bank or executive officer or director of its affiliates* on an account at the bank, doesn’t apply to the payment of an inadvertent overdraft of an account in an aggregate amount of $1,000 or less provided: the account is to overdrawn for more than 5 business days; and the member bank charges the executive officer or director the same fee charged any other customer of the bank in similar circumstances.

     * This prohibition does not apply to the payment by a member bank of an overdraft of a principal shareholder of the member bank, unless the principal shareholder is also an executive officer or director. This prohibition also does not apply to the payment by a member bank of an overdraft of a related interest of an executive officer, director, or principal shareholder of the member bank or executive officer, director, or principal shareholder of its affiliates. 

    Reference: 12 CFR 215.4(e)(2).

Question of the Week Archive

  • QUESTION: The bank has started marketing on social media. The bank wants to market deposit accounts. What must the bank be aware of when marketing on social media?

  • QUESTION: Can a bank still collect and report all 2015 HMDA Rule Data Points even if it qualifies for the partial exemption?

  • QUESTION: Some lenders are sticking to the ECOA having a section entitled “husband and wife”. They are using this phrasing in order to deny same sex married couples. How is this viewed by examiners in regards to fair lending?

  • QUESTION: If the bank issues an unsolicited access device is it a violation of Regulation E?

  • QUESTION: Do covered financial institutions now have additional obligations under Section 314(a) for beneficial ownership information?

  • QUESTION: A borrower's flood insurance was cancelled. The bank was including the premium payments in the escrow account. Because flood insurance wasn't required by the bank due ot the SFHD, is it the bank's responsibility to replace the insurance?

  • QUESTION: The bank is developing a self-testing program to determine whether all applicants for credit are being treated fairly. Is the bank permitted to collect normally prohibited information to be able to analyze?

  • QUESTION: If the bank has charged off a mortgage loan, is a periodic statement required?

  • QUESTION: Would a landlord that rents a space to a marijuana dispensary be considered a marijuana related business?

  • QUESTION: Do SCRA foreclosure rules apply only to the service member`s primary residence, or do they apply to all loans secured by a mortgage on a residence? Does it matter if the loan is for business purposes?

  • QUESTION: What are key factors to consider when conducting a BSA risk assessment?

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