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Can you summarize 12 CFR 337.3?
UNSAFE AND UNSOUND BANKING PRACTICES > Limits on extensions of credit to executive officers, directors, and principal shareholders of FDIC-supervised institutions.
Short Summary
This regulation, issued by the Federal Deposit Insurance Corporation (FDIC), imposes limits on extensions of credit to executive officers, directors, and principal shareholders of FDIC-supervised institutions. FDIC-supervised institutions are subject to the restrictions contained in Federal Reserve Board Regulation O to the same extent as member banks. The regulation prohibits FDIC-supervised institutions from extending credit or granting a line of credit to executive officers, directors, or principal shareholders, or their related interests, in an amount that exceeds the greater of $25,000 or five percent of the institution’s unimpaired capital and unimpaired surplus, unless approved by the board of directors and the interested party abstains from voting. Additionally, there are restrictions on extensions of credit to partnerships where executive officers of the institution are partners. The regulation also provides authorization for extensions of credit to executive officers for other purposes, subject to certain limits and conditions. The definitions and exclusions from Federal Reserve Board Regulation O apply to this regulation. The term ‘FDIC-supervised institution’ refers to entities for which the FDIC is the appropriate Federal banking agency.
Whom does it apply to?
FDIC-supervised institutions, executive officers, directors, principal shareholders, and related interests
What does it govern?
Limits on extensions of credit to executive officers, directors, and principal shareholders of FDIC-supervised institutions
What are exemptions?
Extensions of credit or lines of credit that have been approved in advance by a majority of the entire board of directors and where the interested party has abstained from participating in the voting
What are the Penalties?
No specific penalties mentioned
Jurisdiction
U.S. Federal Government