The Federal Reserve Board is extending the comment period on its proposal to modernize Regulation O – a rule governing the extension of credit by a bank to its “insider.” Insiders include bank executives, board members, and major shareholders who could potentially influence a bank’s lending decisions.
The Fed Board extended the comment period to November 4 to allow interested parties more time to analyze the issues and prepare their comments.
The notice outlined that the proposed amendments would update the regulation, increase transparency by clarifying requirements and incorporating existing interpretations, and promote efficiency by reducing regulatory burden.
“The proposed amendments also would incorporate existing statutory requirements that are not currently reflected in the regulation. Moreover, the proposed amendments would update several outdated dollar-based thresholds in Regulation O and index these thresholds going forward. In addition, the proposed amendments would address the application of Regulation O to member banks that lend to companies that are presumed to be controlled by large asset management companies through passive investment funds. Finally, the proposed amendments would revise and reorganize the regulation to streamline the text and make it more accessible,” the notice states.
Before this extension, comments on the proposal were originally due by Oct. 5.