Full text of Federal Reserve Bank of New York Circulars : Regulation O

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FEDERAL RESERVE B A *
OF M E W YORK
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December 8, 1988

REG U LA TIO N O
Indebtedness R eports by Executive Officers and
Principal Shareholders (Form FFIE C ©04)
To the C h ief Executive O fficer o f Each M em ber Bank
in the Second F ederal R eserve D istrict:

Since 1979 m em ber banks have been subject to certain reporting and disclosure requirements of
Regulation O of the Board of Governors of the Federal Reserve System, pursuant to Titles VIII and IX of the Fi­
nancial Institutions Regulatory and Interest Rate Control Act of 1978 (FIRA). The Garn-St Germain Depository
Institutions Act of 1982 amended certain of the reporting and disclosure requirements. A copy of Form FFIEC 004
is enclosed to assist your bank and your bank’s executive officers and principal shareholders regarding compliance
with the reporting and disclosure requirements set forth in Regulation O.
Executive officers and principal shareholders subject to the reporting requirements of Title VIII of FIRA must
file annual reports concerning their indebtedness, and the indebtedness of their related interests, to the correspondent
banks of the member bank. These reports are filed with the member bank’s board of directors by January 31 of
each year. The 1989 report covers the period January 1 to December 31, 1988.
Each member bank should notify its executive officers and principal shareholders of the reporting requirements
of Title VIII of FIRA. The persons notified should include any person who was an executive officer or principal
shareholder of the member bank during the period January 1 to December 31, 1988, since all of these persons are
subject to reporting requirements if they were indebted to a correspondent bank of the member bank during this
period.
Each member bank is also required to make available to its executive officers and principal shareholders a
list of the member bank’s correspondent banks. A correspondent bank is defined as a bank that maintains one or
more correspondent accounts for a member bank during the calendar year that in the aggregate exceed certain
amounts specified in the regulation.
Form FFIEC 004, or a similar form, that is filed by executive officers and principal shareholders, must be
kept on file at the member bank for a period of three years. These reports are not required to be made available
to the public; however, the reports will be reviewed by examiners during the course of the examination of the mem­
ber bank. The reports filed by executive officers and principal shareholders are not required to be filed with the
Reserve Bank or Regional Administrator.
The enclosed Form FFIEC 004 is provided to your bank to assist your executive officers and principal share­
holders in meeting their continuing reporting requirements under Title VIII of FIRA. The executive officers and
principal shareholders can, if they wish, provide the required information on other forms.
Please duplicate the form in accordance with your needs. Forms are being provided to national banks at the
request of the Comptroller of the Currency. Form FFIEC 004 has been approved by the FFIEC for use by executive
officers and principal shareholders in complying with the reporting requirements of Title VIII of FIRA.
Any questions your bank may have on the current forms should be directed to Bernard Jacobs, Supervising
Examiner (Tel. No. 212-720-5890). Questions on Regulation O should be directed to Ben Szwalbenest, Regulations
Specialist (Tel. No. 212-720-8136).
R o b e r t A. O ’ S u l l i v a n ,

Vice President.

General Instructions
H. Persons Required to File Report
A Report on Indebtedness to Correspondent Banks (Form FFIEC 004),
or a similar form containing identical information, must be completed
by each executive officer and each principal shareholder of an insured
bank who was indebted, or whose related interests were indebted,
during the calendar year for which the report is being submitted to a
correspondent bank of their bank. All insured banks are required by
law to make available to their executive officers and principal
shareholders a list of the bank's correspondent banks. “Correspondent
bank" means generally a bank th at maintains a correspondent account
in excess of a certain am ount for the officer's or shareholder's bank.
The executive officer or principal shareholder must file a separate
report concerning the indebtedness of the officer or shareholder to each
correspondent bank and a separate report concerning the indebtedness
of each of the related interests of the officer or shareholder to each
correspondent bank. For example, if an executive officer is indebted to
two correspondent banks, the officer must file two reports, one for
each correspondent bank. If the executive officer has two related
-interests that were also both indebted to two correspondent banks, the
officer would file six reports, two for the officer's own indebtedness
and four for the indebtedness of the officer's related interests. If the
executive officer is not indebted to a correspondent bank, but a related
interest of the officer is indebted to a correspondent bank, the
executive officer must file a report concerning the indebtedness of the
officer's related interest to the correspondent bank.
2. Where amid When Reports are to be Filed
The executive officer or principal shareholder must submit the report
on indebtedness to correspondent banks to the board of directors of
the reporting person's bank for each calendar year by January 31 of the
next year.
3. What Must be Reported
The reporting person must include in each report on indebtedness to
each correspondent bank: (a) the maximum amount of indebtedness
outstanding during the calendar year, and (b) the terms and conditions
of each extension of credit included in the maximum amount reported.
The terms and conditions to be reported are: (1) the original amount
and date; (2) the m aturity date; (3) the payment terms; (4) the range of
interest rates charged during the calendar year; (5) whether secured or
unsecured; (6) if secured, a description of collateral and its value; and
(7) any unusual terms or conditions.

In determining the maximum amount of indebtedness of a principal
shareholder, the indebtedness of a member of the shareholder's
immediate family is to be treated as indebtedness of the principal
shareholder. Each maximum amount of indebtedness reported may
include several separate extensions of credit. The reporting person must
report separately the terms and conditions of each of these extensions
of credit.
Each report on indebtedness to each correspondent bank must also
include the amount of indebtedness outstanding to the correspondent
bank 10 business days before the date the report on indebtedness is
filed. If the information on the amount of indebtedness outstanding to
a correspondent bank 10 business days before the filing of the report is
not available or cannot be readily ascertained by the filing date, an
estimate of the amount of such indebtedness may be filed, provided
that the actual amount of such indebtedness is submitted to the bank's
board of directors within the next 30 days.
4. Definitions
The following definitions are intended to provide general guidance in
completing this report. For precise definitions, seethe Federal Reserve
Board's Regulation O (12 CFR Part 215) and Part 349 of the FDIC's
Rules and Regulations (12 CFR Part 349).
a. “ Executive officer" is defined in section 215.2 of Regulation O and
means generally an individual who participates or who has authority
to participate (other than in the capacity of a director) in major
policymaking functions of the bank. Certain categories of bank
officers (e.g., vice presidents) are presumed in Regulation O to be
executive officers unless they are excluded by resolution of the
board of directors of the bank or by its bylaws from participation in
major policymaking functions of the bank and do not participate
therein.
b. "Principal Shareholder" means any individual or company (other
than an insured bank or a foreign bank) that, directly or indirectly,
owns, controls, or has the power to vote more than 10 per cent of
any class of voting securities of the bank. The term includes a person
that controls a principal shareholder (e.g., a person that controls a
bank holding company).
For the purpose of determining who is a principal shareholder,
shares owned or controlled by a member of the individual's
immediate family are presumed to be controlled by the individual.

"Immediate family" means the spouse of an individual, the
individual's minor children, and any of the individual's children
(including adults) residing in the individual's home. For reporting
purposes, only one individual in the immediate family must file
reports, if that individual's reports include the information on
indebtedness of the individual's immediate family.
c. Control of a company is defined in section 215.2(b) of Regulation O
as generally ownership or control of 25 per cent or more of a
company's outstanding voting shares. However, the regulation
presumes control in some cases where less than 25 per cent
ownership or control exists.
d. "Related interest" means any company controlled by a person and
any political or campaign com m ittee, the funds or services of which
will benefit a person or that is controlled by a person. However, a
related interest does not include a bank or a foreign bank.
e. "Indebtedness" includes any extension of credit (as defined in
section 215.3 of Regulation O), but does not include:
i. commercial paper, bonds and debentures issued in the ordinary
course of business; and
ii. consumer credit (as defined in section 226.2 of Regulation Z)
in an aggregate amount of $5,000, or less, from each corres­
pondent bank, provided the credit is incurred under terms that
are not more favorable than those offered the general public.
f. "Maximum amount of indebtedness" means, at the option of the
reporting person, either (i) the highest outstanding indebtedness
during the calendar year for which the report is made, or (ii) the
highest end of the month indebtedness outstanding during the
calendar year for which the report is made. The method chosen
should be consistently used for all indebtedness to the same
correspondent bank. The reporting person must indicate on the
report whether the maximum am ount was determined as of the end
of the month or on a daily basis.
g. "Correspondent bank," "com pany," and other terms pertinent to
this report are defined in the Board's Regulation Q, 12 CFR Part
215 and Part 349 of the Federal Deposit Insurance Corporation's
Rules and Regulations, 12 CFR Part 349.

Board o f Governors o f the Federal Reserve System
C om ptroller o f the Currency
Federal Deposit Insurance C orporation

Report on Indebtedness of Executive Officers and
Principal Shareholders and their Related Interests
to Correspondent Banks

Name of Executive Officer or Principal Shareholder Submitting Report

Name of Bank to which Report is Submitted

To be submitted by executive officers and principal shareholders of insured banks to the
boards of directors of their banks in satisfaction of the reporting requirements of the
Federal Reserve Board’s Regulation 0 (12 C.F.R. Part 215) and Part 349 of the Federal
Deposit Insurance Corporation’s Rules and Regulations (12 C.F.R. Part 349) w ith respect
to indebtedness to correspondent banks.

For the Calendar Year Ending December 31, 19___

Status of Reporting Person:

A. Maximum am ount of indebtedness outstanding during the calendar year:

Executive Officer
Principal Shareholder
If the report is subm itted for indebtedness of a related interest, name and
address of related interest for which the report is submitted:

Form FFIEC 004
Approved by the Federal Financial Institutions
Examination Council 11/15/79
Expires 9/30/89
OMB No. 7100-0034 (FRB)
Expires 9/30/89
1557-0070 (OCC)
3064-0023 (FDIC) Expires 9/30/89

D. Terms and Conditions of each extension of credit included as
indebtedness in the amount reported in Box A (see Instruction 3). Use
additional pages if indebtedness consists of more than three loans
and/or more space is needed to report terms and conditions:

(In thousands of dollars) $
B. Method used to determine maximum amount of indebtedness outstand­
ing (check one):

Loan 1:

i. highest outstanding indebtedness during the calendar year
ii. highest end of the month indebtedness outstanding during the
calendar year
Name and address of the correspondent bank to which the executive
officer, principal shareholder, or related interest is indebted:

Loan 2:

C. Amount of indebtedness outstanding 10 business days prior to the date
of filing this Report:

Loan 3:

(In thousands of dollars) $
I hereby certify that information given above is complete, correct,
true to the best of my knowledge.

Signature of official responsible for report

Date Signed

Disclosure of Estimated Burden

The estimated average burden associated with this information collection is .75 hours per respon­
dent and Is estimated to vary from .27 to 2 hours per response, depending on individual circum­
stances. Burden estimates include the time for reviewing instructions, gathering and maintaining
data in the required form, and completing the information collection, but exclude the time for
compiling and maintaining business records in the normal course of a respondent's activities.
Comments concerning the accuracy of this burden estimate and suggestions for reducing this
burden should be directed to the Office of Information and Regulatory Affairs, Office of Manage­
ment and Budget, Washington, D.C. 20503, and to one of the following:
Secretary
Board of Governors of the Federal Reserve System
Washington, D.C. 20551
Legislative and Regulatory Analysis Division
Office of the Comptroller of the Currency
Washington, D.C. 20219
Assistant Executive Secretary
Federal Deposit Insurance Corporation
Washington, D.C. 20429