Reporting The Extension Of Credit

Question:

In Section <a href="http://www.bankersonline.com/regs/215/2155.html">215.5 (c) 13</a>, the regulation is a little confusing and I was hoping that someone may have questioned this before. This involves loans from member banks to our executive officers. It mainly starts with <a href="http://www.bankersonline.com/regs/215/2159.html">12 CFR 215.9</a>. It then references section <a href="http://www.bankersonline.com/regs/215/2155.html">12 CFR 215.5(c) 13</a>.My question is if the extension of credit is:(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 it is secured by a first lien and the executive owns the residence.Is the executive officer required to disclose this information to the board of directors within 10 days as required for any other credit over $100,000?I have read this section over and I am not clear on whether the executive is to report or not report.

Answer:

Section 215.5(d)(1) requires that ANY extension of credit to an executive officer must be promptly reported to the board of directors. So, by all means, report the loan.

First published on BankersOnline.com 3/4/02