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Tax Monitor

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


1  https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20200715a1.pdf    
2  https://www.jacksonkelly.com/bank-notes-blog/harmonizing-reg-o-with-sba-rules-for-making-ppp-loans-to-directors-and-principal-shareholders    

 

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