Federal Reserve Board requests comment on a proposal to modernize its rule governing the extension of credit to bank "insiders"—bank executives, board members and major shareholders who could potentially influence a bank's lending decisions

Federal Reserve Board requests comment on a proposal to modernize its rule governing the extension of credit to bank "insiders"—bank executives, board members and major shareholders who could potentially influence a bank's lending decisions

The Federal Reserve Board on Friday requested comment on a proposal to modernize its rule governing the extension of credit to bank "insiders"—bank execu Official websites use .govA .gov website belongs to an official government organization in the United States. Secure .gov websites use HTTPSA lock (LockLocked padlock icon) or https:// means you've safely connected to the .gov website. Share sensitive information only on official, secure websites. The Federal Reserve, the central bank of the United States, provides the nation with a safe, flexible, and stable monetary and financial system. For release at 10:00 a.m. EDT Share The Federal Reserve Board on Friday requested comment on a proposal to modernize its rule governing the extension of credit to bank "insiders"—bank executives, board members and major shareholders who could potentially influence a bank's lending decisions.

The proposal updates outdated thresholds while maintaining safeguards against preferential treatment. Regulation O has not been comprehensively updated since 1979. The rule addresses a unique challenge for community banks, where board members and executives are often local business owners and civic leaders who provide valuable perspective and expertise to bank governance and information on the local economy. The proposal updates dollar-based thresholds and indexes them to economic growth going forward. It addresses unnecessary applications of the rule to passive interests in companies held by investment funds,