Reg. O exemption for PPP loans extended to August 8, 2020
July 16, 2020
By: Mark A. Mangano
The Federal Reserve has issued a final rule extending Regulation O exemptions for PPP loans made by a bank to its directors or other insiders to August 8, 2020.1 The new rule continues the exemptions contained in a prior rule issued on April 17, 2020. The prior rule expired on June 30, 2020.
Regulation O generally limits the terms and amounts for credit extended to a bank’s insiders. These limits made it difficult for banks to make PPP loans to businesses owned by bank directors or other insiders. For a more detailed discussion of the exemptions, please refer to the April 20, 2020, Jackson Kelly article “Harmonizing Reg. O with SBA rules for making PPP loans to Directors and Principal Shareholders” 2