MN Banker is correct.

However, I do have to wonder how a bank is now ever suppose to know when they have the right to excercise the provision found under 215.5(d)(4)?? I wonder why the Board didn't address this issue?

The Board didn't address it, I suspect, because the Congress didn't address it. The source of the requirement is Section 22(g) of the Federal Reserve Act (12 U.S.C. 375a), specifically 375a(1)(D), which was not changed by PL 109-351.

If the Board gets any comments on this vestigial provision, I'll bet they will point out that the provision remains in the law, and doesn't give the Fed any discretion to nullify it. The Board might also point out that a bank might become aware of an execitive officer's liability to other banks in ways other than the former mandatory self-reporting.

As an after-thought -- Will some banks continue to require their executive officers to report outside credit, even after the amendments to Regulation O?

Bringing this very old thread back. New to Reg O and have read 215.5 over and over. If what I have read in this thread Reg O does not require reporting of indebtedness to other banks, correct?

I do still have the requirement per NYS part 321.5 so I'm getting things confused.

Yes - reporting under Regulation O was repealed in 2006. I am not familiar with NY State requirements.

Digging this thread up again. I am confused with the indebtedness to other banks subject. I have read this thread and I see that the requirement to report indebtedness to correspondent banks was eliminated in 2006.

Now, looking at this page from the FRB that was last updated in 2017: https://www.federalreserve.gov/supervisionreg/regocg.htm

I see this:

"An executive officer of a member bank who becomes indebted to any other member bank must, under certain circumstances, report that indebtedness to the board of directors of the bank of which he or she is an officer. In addition, each executive officer and principal shareholder of an insured bank must report annually, to the bank's board of directors, the maximum amount of his or her own outstanding indebtedness (and that of "related interests") to each of the insured bank's correspondent banks during the preceding calendar year and as of the date ten business days before the report is filed. The range of interest rates on such loans, as well as other terms and conditions of the loans, must also be reported."

My three questions are:

1. Do we still need to report to our board the indebtedness of our exec officers to any other bank?
2. If the answer is yes, under certain circumstances, what are the circumstances?
3. Why is this stating we need to report indebtedness to correspondent banks if that's what went away in 2006?

Thanks in advance. I'm just not sure if the FRB page is outdated or not. My institution has been requiring an annual report from our exec officers disclosing any indebtedness to other banks and I'm not sure we need to be doing that.

Well, if you look at Regulation here: https://www.bankersonline.com/regulations/12-215-000

You will see that it no longer includes 215.20 to 215.23, so why that information is still on the FRB website is anyone's guess.

However, with that said it is still important that banks know about any insider relationships with your correspondent banks.

12 USC 1972(2)—Insider Loans With Correspondent Banks

This law prohibits a bank and its correspondent bank from making preferential loans or loans that involve more than the normal risk of repayment or that present other unfavorable terms to an insider of the other bank. The law also prohibits a bank from opening a correspondent account at another bank where either bank has a preferential loan outstanding, or a loan that involves more than the normal risk of repayment or presents other unfavorable features, to an insider of the other.

Thanks for the speedy reply! Yes, I had been checking the entire reg (I've been in the Reg O weeds for hours now) and I don't see a reporting requirement anywhere current that speaks to executive officers' indebtedness to other banks - whether correspondent or member bank.

That said, if we are not requiring our executive officers to report their indebtedness to other banks, then I don't understand how we would know when the following is true from 215.5:

"Any extension of credit by a member bank to any of its executive officers shall be:

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"

I guess we could just decide to exercise that option if we happened to learn of the indebtedness by a means other than reporting?

EDIT: I just realized this was the same thing you (rlcarey) were asking earlier in the thread. Great minds! So I guess this has not ever been addressed further.

Would like to revisit this issue. We curently state in our Reg O Policy that Executive Officers are to report his/her total indebtedness to any other bank for "any purpose loans" that are in excess of $100,000. It seems as if this requirement is to enable us to track if an executive officer has a preferential loan with a bank that we may be considering for a correspondent relationship.

Is this what other banks are doing? I'm just trying to figure out how we are supposed to manage this.

Not sure why there is a $100,000 threshold for reporting if you are using that for correspondent relationship purposes. Any loan would be covered under 12 U.S. Code § 1972 regardless of the amount.

I agree Randy. I have no idea why there is a reference to $100,000.

Maybe it has to do with the bank being able to exercise the demand clause on any executive officer loans made by the bank under 215.5(d):

(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.

I remember when the requirement for EOs to report indebtedness to other banks was eliminated, but it is still listed as an item to be reviewed in the FDIC Risk Management Manual of Examination Policies. In the complete manual found here, beginning on 4.1-10, under Conflicts of Interest, one of the items examiners are told to inquire about is:

Loans or other transactions at any other depository
institution in which a bank officer, director, or
principal stockholder (or immediate family member of
each) holds a beneficial interest, either direct or
indirect.

It further states that if any of this information is not readily available and of reasonably recent compilation, management should be requested to survey their officers, directors and principal stockholders, as necessary, to obtain it. I remember when the rule changed, my bank at the time, determined it would still be a policy requirement.