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
Meet your Community’s Credit Needs for Fair Lending – Utilizing Regulation B’s Special Purpose Credit Program
“What are you doing to ensure diversity, equity and inclusion (DEI)?” That question routinely comes up during conference calls among us, clients, and regulatory agencies. Businesses, educational institutions, and non-profit organizations all are focusing on DEI. Financial institutions are no exception. In fact, regulatory agencies emphasize the importance of DEI in written communications about the Fair […]
CRA Public File Reminder
April 1st is known as April Fools’ day and a time to play tricks and pranks. But did you know on April 1, 1748, the Ruins of Pompeii were rediscovered by Spaniard Rocque Joaquin de Alcubierre? Guess it is time to rediscover the CRA Public File and make sure nothing ancient is inside! By now […]
The Fannie Mae and Freddie Mac Application: New and Improved?
The mortgage application, the 1003 or URLA – these are all synonyms for the standard residential mortgage application which has been changed. Navigating through these changes can be stressful; but we are here to help. Fannie/Freddie announced the release of the redesigned Uniform Residential Loan Application (URLA) on August 23, 2016. The changes would include […]
No Longer A HMDA Reporter – Fair Lending Still Applies
On April 16, 2020, The Consumer Financial Protection Bureau issued a final rule raising the loan-volume coverage thresholds in Regulation C for financial institutions reporting data under the Home Mortgage Reporting Act (HMDA). A permanent threshold for collecting closed end mortgage reporting data went from 25 to 100 loans effective July 1, 2020. Also, open-end […]
Three Hot CRA Concerns
Minding the pandemic, election and social issues is a lot to focus on but bankers will have to add the Community Reinvestment Act (CRA) to their full plates. There are three hot CRA topics on which to focus since CRA is still very much on the regulatory agencies’ minds. Despite 2020 upending CRA lending programs, […]
Adverse Action Notice Requirements For Loans and Deposits
When you deny a credit application or a deposit account request, you simply fill out a form and move on to the next customer, right? If only it were that simple! This article will clarify the who, what and why of the different requirements for denying loan applications and deposit requests for consumers and businesses […]
