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F e d e r a l R e s e r v e Ba n k





Circular No. 68-38
February 12,1968


To All Member Banks and Others Concerned
in the Eleventh Federal Reserve D istrict:

There is enclosed for your information a copy o f a press
release concerning the adoption by th e Board o f Governors of
the Federal Reserve System of amendments to Regulation 0 .
A copy o f the revised Regulation will be forwarded as soon
as available.
Yours very truly,
P. E. Coldwell
Enclosure (1)

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (


For immediate release.


re e a s e

February 7, 1968.

The Board of Governors of the Federal Reserve System
announced today it had amended its Regulation 0, governing conditions
under which the executive officers of a member bank may borrow from
their own bank, to bring the regulation into conformity with recent
legislation by the Congress liberalizing the basis for such loans.
At the same time, the Board also redefined the term
"executive officer," limiting its applicability to persons particiĀ­
pating in the determination of major policies of a member bank.

As a

result, many bank officers with lesser responsibilities will have freer
access to the credit facilities of their own institution.
Under the law and the new provisions of Regulation 0,
which will become effective March 15, 1968, executive officers of
member banks may borrow up to $30,000 for a home mortgage, $10,000 for
the education of children, and $5,000 far any unspecified purpose.
Previously, an executive officer could not borrow more than $2,500 from
his bank.
The new definition of executive officer excludes those
persons who do not participate in the determination of major policies
of a bank and: whose decisions are limited by standards fixed by top

As a result many persons who have official titles and may

exercise sone discretion in the performance of their duties, including




the making of loans, would not be-subject to the loan limitations of
the law and regulation.

For example, under the revised definition a

manager or assistant manager of a branch of a bank would not be
considered an "executive officer" unless that person participated in
major policy decisions.
The text of the Board's revised Regulation 0, concerning
loans by member banks to their executive officers, has been sent to the
Federal Register for publication.



Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102