FRO_20240328_omb

Supporting Statement for the
Recordkeeping and Disclosure Requirements Associated with Regulation O
(FR O; OMB No. 7100-0382)
Summary
The Board of Governors of the Federal Reserve System (Board), under authority
delegated by the Office of Management and Budget (OMB), has extended for three years, with
revision, the Recordkeeping and Disclosure Requirements Associated with Regulation O (FR O;
OMB No. 7100-0382). The Board’s Regulation O - Loans to Executive Officers, Directors, and
Principal Shareholders of Member Banks (12 CFR Part 215) governs any extension of credit
made by a member bank1 to an insider of the member bank, of any company of which the
member bank is a subsidiary, and of any other subsidiary of that company. Insiders include
executive officers, directors, principal shareholders, and any related interest2 of such person.
Consistent with statute, the Federal Deposit Insurance Corporation (FDIC) and the Office of the
Comptroller of the Currency (OCC) have issued regulations generally requiring the depository
institutions that they supervise to comply with Regulation O.3 Regulation O prohibits extensions
of credit to insiders unless they are made on substantially the same terms (including interest rates
and collateral) as those prevailing at the time for comparable transactions by the bank with other
persons who are not employed by the bank and do not involve more than the normal risk of
repayment or present other unfavorable features, limits extensions of credit by a member bank to
individual insiders and to all insiders, requires a member bank’s board of directors to approve
certain large extensions of credit, and sets forth recordkeeping and disclosure requirements.
The Board revised the FR O to include depository institutions that are not member banks
as respondents.
The current estimated total annual burden for the FR O is 9,420 hours, and would
increase to 21,932 hours. The revisions would result in an increase of 12,512 hours. While the
revision did not substantively increase burden for any institution, the administrative change did
result in a larger reported burden as indicated.
Background and Justification
Sections 22(g) and (h) of the Federal Reserve Act restrict certain transactions between
member banks and their insiders or insiders of their affiliates.4 Insiders include executive
12 U.S.C. § 221 defines a “member bank” as “any national bank, state bank, or bank or trust company which has
become a member of one of the Federal reserve banks.”
2
A related interest of a person is a company or a political or campaign committee that is controlled by that person or
the funds or services of which will benefit that person. 12 CFR 215.2(n).
3
By their terms, sections 22(g) and 22(h) of the Federal Reserve Act (12 U.S.C. §§ 375a and 375b) and
Regulation O set forth restrictions for “member banks,” which includes national banks and state banks that are
members of the Federal Reserve System. However, other provisions of federal law subject state banks that are not
members of the Federal Reserve System and savings associations to sections 22(g) and 22(h) of the Federal Reserve
Act in the same manner and to the same extent as member banks. 12 CFR 31.2 (OCC); 12 CFR 337.3 (FDIC); see
also 12 U.S.C. §§ 1468(b) and 1828(j).
4
12 U.S.C. §§ 375a and 375b.
1

officers, directors, principal shareholders, and related interests of such persons. Congress enacted
sections 22(g) and (h) to deter bank insiders from abusing their positions to gain favorable
treatment from their associated banks and authorized the Board to prescribe rules and regulations
as necessary to effectuate the purposes and to prevent evasions. The Board has promulgated the
Board’s Regulation O to implement sections 22(g) and (h) of the Federal Reserve Act.
Consistent with statute,5 the FDIC and OCC have issued regulations generally requiring the other
depository institutions that they supervise – state non-member banks, federal savings
associations, and state savings associations – to comply with Regulation O.6 The regulation
contains recordkeeping and disclosure requirements related to depository institutions’
compliance with Regulation O. This information is not available from other sources.
Description of Information Collection
Regulation O contains certain recordkeeping and disclosure requirements. Pursuant to
section 215.8 of Regulation O, respondents must maintain records necessary for compliance with
the requirements of Regulation O. Any recordkeeping method adopted by a respondent shall
identify, through an annual survey, all insiders of the respondent and maintain records of all
extensions of credit to insiders of the respondent, including the amount and terms of each such
extension of credit. Additionally, any recordkeeping method adopted by a respondent shall
maintain records of extensions of credit to insiders of the respondent’s affiliates by using either
the survey method or borrower inquiry method, as set forth in Regulation O, or a different
recordkeeping method if the appropriate federal banking agency determines that the respondent’s
method is at least as effective as the listed methods.7 Respondents using the survey method or
borrower inquiry method for affiliates must maintain records of the amount and terms of each
extension of credit by the member bank to such insiders. These records must be retained for at
least five years after the end of the extension of credit. This retention period is appropriate in
order to monitor compliance with the limits of sections 22(g) and (h) of the Federal Reserve Act
and Regulation O and to allow for enforcement of those provisions, given applicable statutes of
limitations.
Pursuant to section 215.9 of Regulation O, upon receipt of a written request from the
public, a respondent must make available the names of each of its executive officers and each of
its principal shareholders to whom, or to whose related interests, the member bank had
outstanding as of the end of the latest previous quarter of the year, an extension of credit that,
when aggregated with all other outstanding extensions of credit at such time from the member
bank to such person and to all related interests of such person, equaled or exceeded 5 percent of
the member bank’s capital and unimpaired surplus or $500,000, whichever amount is less.
Respondents are not required to disclose the specific amounts of individual extensions of credit.
5

The Federal Deposit Insurance Act (12 U.S.C. § 1828(j)) applies sections 22(g) and (h) to insured state nonmember
banks in the same manner and to the same extent as if they were member banks. The Home Owners’ Loan Act
(12 U.S.C. § 1468(b)) also applies sections 22(g) and (h) to insured savings associations in the same manner and to
the same extent as if they were member banks.
6
12 CFR 31.2 (OCC); 12 CFR 337.3 (FDIC).
7
A member bank that is prohibited by law or by an express resolution of the board of directors of the bank from
making an extension of credit to any company or other entity that is covered by Regulation O as a company is not
required to maintain any records of the related interests of the insiders of the bank or its affiliates or to inquire of
borrowers whether they are related interests of the insiders of the bank or its affiliates. 12 CFR 215.8(d).

2

No disclosure is required if the aggregate amount of all extensions of credit outstanding at such
time from the respondent to the executive officer or principal shareholder and to all related
interest of such a person does not exceed $25,000. Additionally, each respondent must maintain
records of all requests for the information described above and the disposition of such requests.
These records may be disposed of after two years from the date of the request.
Respondent Panel
The FR O panel comprises insured depository institutions and uninsured member banks.
Frequency and Time Schedule
The FR O disclosure is event-generated. The time schedule for when the records
associated with this collection are produced and maintained is contingent on the method of
compliance with Regulation O chosen by the member bank, and can include annually, upon an
extension of credit, or on an ongoing basis. Certain disclosure is required when requests by the
public are received by the member bank.
Revisions to the FR O
The Board revised the FR O information collection to include as respondents depository
institutions that are not members banks. Although these depository institutions are not explicitly
included within the scope of Regulation O, they are required to comply with the requirements of
Regulation O, including the information collections discussed above, as a result of statute and the
regulations issued by the FDIC and OCC. Therefore, the Board believes it is appropriate to
consider these depository institutions to be respondents for purposes of the FR O.
Public Availability of Data
As noted above, upon receipt of a written request from the public, a member bank shall
make available the names of each of its executive officers and each of its principal shareholders
to whom, or to whose related interests, the member bank had outstanding as of the end of the
latest previous quarter of the year, an extension of credit that, when aggregated with all other
outstanding extensions of credit at such time from the member bank to such person and to all
related interests of such person, equaled or exceeded 5 percent of the member bank’s capital and
unimpaired surplus or $500,000, whichever amount is less. Other data associated with this
collection of information is not made publicly available.
Legal Status
Section 7 of the Federal Deposit Insurance Act (12 U.S.C. § 1817(k)) and sections 22(g)
and 22(h) of the Federal Reserve Act (12 U.S.C. §§ 375a and 375b) authorize the Board to issue
these requirements. Section 7 authorizes the Board to require state member banks to report and
publicly disclose information concerning extensions of credit by the state member bank to its
executive officers, principal shareholders, or related interests of those persons. Sections 22(g)
and 22(h) of the Federal Reserve Act authorize the Board to prescribe rules related to extensions

3

of credit to executive officers, directors, and principal shareholders.8 The Board also has the
authority to require reports from state member banks (12 U.S.C. §§ 248(a) and 324). The
obligation to respond is mandatory.
The information disclosed under the disclosure requirements of FR O is not confidential.
Records retained by institutions under FR O would generally be maintained at each institution.
The Freedom of Information Act (FOIA) would be implicated only if the Board obtained such
records or disclosures as part of the examination or supervision of a financial institution, in
which case the records would be protected from disclosure under FOIA exemption 8, which
protects information contained in “examination, operating, or condition reports” obtained in the
bank supervisory process (5 U.S.C. § 552(b)(8)). Information retained pursuant to the
recordkeeping requirements under FR O that is obtained by the Board may also be exempt from
disclosure pursuant to FOIA exemption 4, if it is nonpublic commercial or financial information
which is both customarily and actually treated as private by the respondent (5 U.S.C. §
552(b)(4)), or pursuant to FOIA exemption 6, if it relates to personnel and medical files and
similar files, the disclosure of which would constitute a clearly unwarranted invasion of personal
privacy (5 U.S.C. § 552(b)(6)).
Consultation Outside the Agency
The Board consulted with the FDIC and OCC with respect to the extension, with
revision, of the FR O.
Public Comments
On September 28, 2023, the Board published an initial notice in the Federal Register (88
FR 66843) requesting public comment for 60 days on the extension, with revision, of the FR O.
The comment period for this notice expired on November 27, 2023. The Board did not receive
any comments. The Board adopted the extension, with revision, of the FR O as originally
proposed. On February 16, 2024, the Board published a final notice in the Federal Register (89
FR 12340).
Estimate of Respondent Burden
As shown in the table below, the estimated total annual burden for the FR O is 9,420
hours, and would increase to 21,932 hours with the revisions. While the revisions would not
substantively increase burden for any institution, the administrative change would result in a
larger reported burden as indicated. The estimated number of respondents is based on the current
total of depository institutions, and the time per response is based on an estimate of how long it
is expected to take to fulfill each requirement. These recordkeeping and disclosure requirements
represent less than 1 percent of the Board’s total paperwork burden.

8

Section 306(o) of the Federal Deposit Insurance Corporation Improvement Act of 1991 contains a similar
authorization.

4

FR O

Estimated
number of
respondents9

Estimated
annual
frequency

Estimated
Estimated
average hours annual burden
per response
hours

1,570

1

4

6,280

1,570

1

2

3,140
9,420

4,867

1

4

19,468

1,232

1

2

2,464
21,932

Current
Recordkeeping
Sections 215.8 and 215.9
Disclosure
Section 215.9
Current Total
Proposed
Recordkeeping
Sections 215.8 and 215.9
Disclosure
Section 215.9
Proposed Total
Change

12,512

The estimated total annual cost to the public for the FR O is $624,075, and would
increase to $1,452,995 with the revisions.10
Sensitive Questions
This information collection contains no questions of a sensitive nature, as defined by
OMB guidelines.
Estimate of Cost to the Federal Reserve System
The estimated cost to the Federal Reserve System for collecting and processing this
information collection is negligible.

9

Of these respondents, 3,615 for recordkeeping and 915 for disclosures are considered small entities as defined by
the Small Business Administration (i.e., entities with less than $850 million in total assets). Size standards effective
March 17, 2023. See https://www.sba.gov/document/support-table-size-standards. There are no special
accommodations given to mitigate the burden on small institutions.
10
Total cost to the responding public is estimated using the following formula: total burden hours, multiplied by the
cost of staffing, where the cost of staffing is calculated as a percent of time for each occupational group multiplied
by the group’s hourly rate and then summed (30% Office & Administrative Support at $22, 45% Financial
Managers at $80, 15% Lawyers at $79, and 10% Chief Executives at $118). Hourly rates for each occupational
group are the (rounded) mean hourly wages from the Bureau of Labor Statistics (BLS), Occupational Employment
and Wages, May 2022, published April 25, 2023, https://www.bls.gov/news.release/ocwage.t01.htm. Occupations
are defined using the BLS Standard Occupational Classification System, https://www.bls.gov/soc/.

5