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Extensions of Credit to Insiders
Plain English Summary
The FDIC is planning to raise the limits on loans that can be given to insiders, like executive officers, at banks it supervises. Currently, loans to these insiders that don't need special approval can go up to $100,000, but this will increase to $400,000. Additionally, loans that require board approval will rise from $500,000 to $2,000,000. The FDIC will also create a way to adjust these limits in the future as needed. Insurance agents should stay informed about these changes as they may affect lending practices within financial institutions they work with.
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The Federal Deposit Insurance Corporation (FDIC) is proposing to increase quantitative thresholds for certain extensions of credit to insiders of FDIC-supervised institutions, as restricted by the Federal Reserve Act and regulations promulgated thereunder. Specifically, the proposal would increase the thresholds for certain extensions of credit to executive officers not otherwise specifically authorized by statute from $100,000 to $400,000; and extensions of credit to insiders requiring prior approval by the board of directors from $500,000 to $2,000,000. The proposal would also establish an indexing methodology to periodically update such thresholds over time.