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STEP ONE - MAKE THE CALL

Loans to Executive Officers, Edith Snow
Directors and Principal Shareholders 817-676-3316
(Regulation O)

I always add this because commercial James Walsh
lenders often find themselves dealing 281-794-0065
with applications that involve ‘insiders’
of the bank, especially in smaller com- Celena Ivanitch
munities. Reg O places limits on exten- 512-787-2164
sions of credit to an individual insider and
the insider’s related interests, and to all Richard Grimes
insiders and their related interests in the
aggregate. The regulation also applies 469-543-9337
to any extension of credit by a bank to
a company controlled by a bank official
and to a political or campaign committee
that benefits or is controlled by an exec-
utive of the financial institution.
Section 23A – Relations with
Affiliates (Regulation W)
Regulation W covers a wide spectrum
of transactions, including extension of
credit to an affiliate, investment in securi-
ties issued by an affiliate, asset purchases
from an affiliate, issuance of a guarantee
on behalf of an affiliate, and acceptance
of securities issued by an affiliate as col-
lateral for credit. Regulation W defines a
bank’s affiliate fairly broadly and includes
any company that a bank directly or indi-
rectly controls or that is sponsored and
advised by a bank.
What is a compliance officer to do? You
can assist commercial lenders by training
them and by developing comprehensive
policies and procedures that cover the var-
ious types of credit and includes all appli-
cable rules and regulations. Additionally, INSIGHT
compliance monitoring and auditing work
steps should include a review of com-
mercial loan compliance with these rules. MOSSADAMS.COM/CECLGUIDE RISES IN THE WEST
Train. Monitor. Test. Repeat. 

Kelly Goulart, CRCM CAMS CIA, is IBAT’s
regulatory compliance manager. Contact Download our complimentary CECL Accounting Guide
him at 512-275-2231 or [email protected].
to view practical examples and insights as your company
prepares to adopt the new standard.

Save the Dates! RISE WITH THE WEST.
IBAT’s
Credit Analysis Summit
Cash Flow Summit
March 27-28, 2018
DFW Metroplex

January/February 2018 13