Inadvertent Reg O Violation

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Question:

What should be done if it is determined that there was an inadvertent violation of Reg O in which legal fees were waived for an insider, in order to remedy the situation?

Answer:

The insider should pay the legal fees and the bank should review its processes to determine why this violation occurred and adjust procedures to ensure similar violations do not occur going forward. Also, depending upon your asset size, review the FDICIA reporting requirements for insider lending violations.

First published on BankersOnline.com 3/01/10