Fed proposes updated thresholds for insider credit under Regulation O
Banks and their executives, board members, and major shareholders could face new credit limits after the comment period ends
The Federal Reserve Board on July 31, 2026 released a notice proposing to modernize Regulation O, the rule that limits credit extensions to bank insiders - executives, board members and major shareholders.
The proposal would revise the dollar-based thresholds that have not been comprehensively updated since 1979 and tie future adjustments to economic-growth indexes. It also clarifies that passive interests held by investment funds are not subject to the rule, codifies existing statutory requirements, and incorporates longstanding regulatory interpretations.
Vice Chair for Supervision Michelle W. Bowman said the changes preserve safeguards while providing clearer standards to help community banks recruit local business leaders for governance roles.
The notice invites public comment, with submissions due 60 days after the Federal Register publication. Comments may be sent to the email address provided in the notice.
No effective date is set; the rule would take effect only after the comment period and any subsequent final rulemaking.