Measuring your compliance with Regulation O and ensuring that you’re effectively managing the risks associated with insider loans
We guide you on the best ways to meet the credit needs of insiders while staying within the boundaries of Regulation O.
Banks routinely extend credit to board members and other insiders. Still, it can be risky unless you thoroughly understand and adhere to Regulation O. There are issues of transparency to consider and the potential for conflicts of interest and favoritism.
Conducting Reg O reviews is a standard part of our services, and TCA consultants understand the regulation’s impact on your lending and overall risk.
Our team shows you the best way to comply with Reg O while supporting the needs of creditworthy insiders and avoiding financial penalties and reputational harm.
We root out any issues that may raise red flags with examiners and prepare you for your exam by:
- Looking at your written policies and procedures to be sure they define who’s considered an insider and reviewing your guidelines for lending to such prospects: lending limits, loan terms, the approval process, and so forth.
- Evaluating your documentation to ensure that your record-keeping is satisfactory and includes accurate loan files, agreements, disclosures, etc.
- Examining transactions to verify that insiders aren’t receiving preferential treatment on loan terms, interest rates, and repayment plans.
- Gauging the adequacy of internal controls and audit processes and whether they reflect your policies.
- Assessing whether your board of directors and staff thoroughly understand Reg O.
By the end of our review, you’ll gain a complete picture of your Reg O compliance strengths and weaknesses, and we’ll make recommendations about enhancing your program.
By working with TCA, you’ll find A Better Way to control Reg O risk and protect your bank when extending credit to insiders.
Key deliverables include:
- Identifying compliance gaps and recommending solutions
- Verifying whether the credit extended to insiders falls within Reg O’s lending limits
- Uncovering any evidence that insiders have improperly used their positions for personal gain
- Determining whether your insider lending processes are transparent and protect the interests of your bank
Additional Compliance Topics
New Threshold Amounts for 2023 under Regulation Z CARD Act, HOEPA and QM Sections
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HMDA Reporting Threshold Changes Due to Court Ruling
On April 16, 2020, the CFPB released a final rule affecting the thresholds for HMDA reporting. Effective July 1, 2020 the number of closed-end loans originated to be considered a “financial institution” was increased from 25 to 100 for each of the two preceding years for both depository and non-depository institutions. On September 23, 2022, […]
Regulatory Updates – Third Quarter 2022
Below is a link to the Regulatory Updates as of the end of Q3. TCA provides A Better Way for you to track Compliance updates and keep your organization on track. You can download the updates in a PDF form here. As always, TCA is here to help with A Better Way to answer all […]
Do you Remember? HMDA – Reporting Open-End Lines of Credit
It’s time for a trip into the Way-Back Machine, all the way back to April 16, 2020, when the Consumer Financial Protection Bureau (CFPB) issued a final rule amending Regulation C. This amendment permanently raised the closed-end coverage threshold from 25 to 100 closed-end mortgage loans in each of the two preceding calendar years. The […]
Renewed Focus on Overdraft and “Junk” fees
One of the consequences of shrinking interest rates and interest margins is that financial institutions’ reliance on non-interest income has significantly increased over the last decade. The Consumer Financial Protection Bureau (CFPB) published an initiative on January 26, 2022 stating its intention to research the impact of fees on American consumers. The press release specifically […]
B Prepared for Compliance in Commercial Lending
It’s common for many lenders to believe that commercial lending is exempt from federal compliance regulations. However, this would be untrue – commercial loans are subject to the following compliance regulations: Regulation C/HMDA, Flood Disaster Protection Act, and Regulation B/ECOA. This article will focus on only one the regulations above – Regulation B. Under this […]
