DEFINITION of 'Regulation O'

One of the regulations set forth by the Federal Reserve. Regulation O places limits and stipulations on the credit extension that a member bank can offer to its executive officers, principal shareholders and directors. This regulation also implements certain reporting requirements as set forth in previous financial legislation.

BREAKING DOWN 'Regulation O'

Regulation O has put into effect the requirements for reporting as laid out in two previous financial laws: the Financial Institutions Regulatory and Interest Rate Control Act of 1978 as well as the Garn-St. Germain Depository Institutions Act of 1982. Any bank with federal insurance must include a full report of all credit extended to its officers and key shareholders in every quarterly report.

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