4000 - Advisory Opinions
Section 22(g) of the Federal Reserve Act Requires "Due and Payable Upon Demand" Clause in Any Loan Made to an Executive Officer Regardless of Purpose of Loan
October 16, 1992
Pamela E.F. LeCren, Counsel
We recently spoke on the telephone regarding the interpretation of FDIC's regulations governing loans to executive officers and the need to include a due and payable upon demand feature in such loans. I regret to inform you that I recently became aware that the Federal Reserve Board has taken the position that section 22(g) of the Federal Reserve Act requires that such clauses must be in any loan made to an executive officer of a bank regardless of the purpose of the loan. As you know, FDIC's regulations on this matter are grounded in section 22(g) of the Federal Reserve Act. We will defer to the Federal Reserve Board on this matter.
I have enclosed a copy of the Federal Reserve Board opinion for your information. I apologize for any inconvenience this has caused the bank.