ICBA said it strongly supports a proposed rulemaking to update and index the dollar thresholds for certain extensions of credit to insiders of FDIC-supervised institutions.
Details: In a letter to the FDIC regarding its proposal to modernize and index Regulation O, ICBA said it supported the effort and recommended that the FDIC:
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Promptly finalize and implement the proposal’s dollar-threshold increases and indexing mechanism.
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Retain and index a minimum dollar floor to prevent unintended consequences for smaller institutions.
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Clarify the interaction between governance-related terms in Part 363 of the FDIC’s regulations and insider definitions in the Federal Reserve’s Regulation O.
Background: The Federal Reserve in August proposed modernizing Regulation O, the rule governing the extension of credit to insiders such as bank executives, board members, and major shareholders who could influence a bank's lending decisions. The FDIC issued a related proposal to adjust related thresholds for the banks it supervises.
ICBA View: ICBA supports raising and indexing overly restrictive thresholds such as those found in Reg O—which has not seen a comprehensive update since the 1970s—to better enable community banks to recruit and retain directors, particularly in rural areas.
ICBA Advocacy: ICBA has advocated for the agencies to update Reg O and related rules, including:
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During the Economic Growth and Regulatory Paperwork Reduction Act review last fall.
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In recommendations to the Office of Management and Budget.