The Federal Reserve Board has proposed modernizing Regulation O, which governs credit extended to bank executives, directors and major shareholders who could influence lending decisions. The proposal would update outdated dollar-based thresholds and index them to economic growth while retaining safeguards against preferential treatment and conflicts of interest. The changes would also limit unnecessary application of the rule to passive interests in companies held by investment funds, codify statutory requirements, incorporate long-standing regulatory interpretations and simplify compliance. Comments are due 60 days after the proposal is published in the Federal Register.

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