Source: https://www.fdic.gov/regulations/laws/rules/4000-890.html
Timestamp: 2019-04-26 06:48:27+00:00

Document:
At your request the Legal Division has reviewed OCC's interpretative rulings regarding section 5200 of the Revised Statutes (12 U.S.C. 84)1 to determine whether or not those rulings are applicable to insured nonmember banks through Regulation O (12 C.F.R. Part 215).
Federal Reserve Board Regulation O implements § 22(h) of the Federal Reserve Act which is made applicable to insured nonmember banks through § 18(j) of the FDI Act as amended by § 108 of Title I of FIRIRCA. Section 22(h)(1) generally provides that no member bank shall make any loan or extension of credit to its executive officers or principal shareholders that is in excess of the limits on loans to a single borrower established by section 5200 of the Revised Statutes. The limit established by § 5200 is 10% of the bank's paid-in capital and unimpaired surplus. Section 215.2(f) of Regulation O further provides that the lending limit to which executive officers and principal shareholders are subject shall be 10% of the bank's capital and unimpaired surplus "or any higher amount permitted by section 5200 of the Revised Statutes for the types of obligations listed therein as exceptions to the 10 percent limit."
It is our opinion, and that of the legal staff of the Federal Reserve Board, that § 22(h) and Regulation O only incorporate the 10% lending limit established by § 5200 of the Revised Statutes and the exceptions thereto. The term obligation as used in § 5200 and construed in OCC's interpretative rulings is not incorporated in either § 22(h) or Regulation O.2 Inasmuch as section 22(h) and Regulation O use the term extension of credit which has its own separate and distinct definition, the interpretative rulings pertaining to what constitutes an obligation and how loans to separate borrowers are to be combined are not relevant to the application of Regulation O. The rulings on the exceptions to the 10% limit are, however, relevant.3 The Legal Division, as well as the FRB staff, have informally adopted the position that while the FDIC and FRB are free to construe the exceptions to § 5200 in a manner differently than the OCC, OCC's interpretative rulings will be followed.

References: § 22
 § 18
 § 108
 § 5200
 § 22
 § 5200
 § 5200
 § 22
 § 5200