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Course description

Historical data show that insider abuse is at the heart of many bank failures, so examiners take very seriously their mission to prevent it. Regulation O violations are frequently cited during examinations, and regulators often take enforcement action for insider lending infractions, such as civil money penalties , a Memoranda of Understanding, Cease and Desist Actions, and even Prohibition Orders.

Typical violations include illegal overdrafts to insiders or extensions of credit that exceed one of several lending limit provisions contained in the regulation. These violations generally result from a lack of adequate procedures. Simple steps to monitor overdrafts and total extensions of credit to insiders are usually sufficient to prevent such violations. This program provides suggestions for procedures.

In other cases, violations result from a lack of understanding of the fine details of Regulation O. The concepts are fairly straightforward, but contain enough details to cause confusion. Most banks can easily identify their directors and executive officers, but confusion occurs when trying to determine the status of the directors and executive officers of affiliated institutions. Each of the three lending limits is fairly simple, but determining how the three limits interact with one another can cause confusion. This program provides detailed coverage of these, and other, fundamental requirements of Regulation O.

Civil money penalties can be assessed against the institution or against individuals. For example, federal regulators fined five former directors and executives in amounts from $8,000 to $20,000 per individual for violations of insider lending rules.

This program provides the information needed by the lending, compliance and audit staff to ensure ongoing compliance with the regulation. Participants receive a detailed manual that serves as a continuing resource.

Regulation O places strict requirements on loans made to "insiders." This two-hour program explains:
•Who is considered an insider
•What transactions are considered "extensions of credit"
•The prohibition against preferential treatment
•The requirements for prior approval
•The lending limits for each insider, all insiders as a group, and special limits for executive officers
•The restrictions on overdrafts
•How Regulation O rules impact existing extensions of credit to newly elected/appointed insiders


The program is designed for loan officers, compliance officers, loan support staff and auditors.


Compliance Gurus

Jack Holzknecht and Kelly Owsley

Jack Holzknecht is the CEO of Compliance Resource, LLC. He has been delivering the word on lending compliance for 39 years. In Jack's 34 years as a trainer over 125,000 bankers (and many examiners) have participated in his live seminars and webinars. Jack's career began in 1976 as a federal bank examiner. He later headed the product and education divisions of a regional consulting company. There he developed loan and deposit form systems and software. He also developed and presented training programs to bankers in 43 states. Jack has been an instructor at compliance schools presented by several state bankers associations. He developed and delivered compliance training for the FDIC and OTS for ten years. He is a Certified Regulatory Compliance Manager and a member of the National Speakers Association. He is also a "BOL Guru."Kelly M. Owsley, CRCM is Director of Training Services for Compliance Resource, LLC. Kelly's career in banking began in 2000. Since then she has worked for financial institutions ranging in asset size from $250 million to $3 billion. Kelly has worked in numerous areas of the financial services industry including retail branch management, lending, product development and training. In addition, Kelly spent three years in a training and development role with CUNA Mutual Group servicing the largest credit union in the United States. Most recently, she served as the Vice President of Compliance, BSA Officer, and CRA Officer for a community bank in Kentucky where she was responsible for implementing and training all compliance related topics. Kelly holds a Bachelor of Science degree in Accounting from the University of Kentucky and is a Certified Regulatory Compliance Manager.

Course curriculum

  • 1


    • Reg O - Insider Lending

  • 2


    • Materials

    • Slides

    • Questions and Answers