The Federal Reserve and the FDIC have extended until Nov. 4 the deadline for comments on a proposal governing extension of credit by banks to their executive officers, directors, principal shareholders, and their related interests.
“Since the publication of the proposal, commenters have requested that the Board extend the comment period. An extension of the comment period will provide an additional opportunity for interested parties to consider the proposal and prepare comments,” the Fed said, in a Federal Register notice.
The proposals would substantially increase the maximum dollar thresholds.
For extensions of credit to executive officers that are not otherwise specifically authorized by section 22(g) of the Federal Reserve Act, such as most consumer-purpose loans, including automobile loans and unsecured personal loans, the maximum amount would increase from $100,000 to $400,000.
Similarly, the maximum aggregate amount of credit that may be extended to an insider before prior approval of the bank’s board of directors becomes necessary would increase from $500,000 to $2 million.
Rather than allowing the thresholds to become outdated again, the Fed and FDIC propose to adjust them automatically every five years using changes in nominal U.S. gross domestic product.