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Knowingly lend, directly or indirectly, any money or property for the purpose of enabling any person to pay for or hold shares of its stock, unless the loan is made upon security having an ascertained market value of at least fifteen per centum more than the amount of the loan.
Regulation O was implemented to prevent certain bank insiders from receiving more favorable terms or benefits on loans or credit than those provided to non-insiders or other bank customers.
The application of Part 11 "Insider Transactions" regulation to agreement between the Bank and an entity partly owned by one of the Bank's directors. Part 11 requires that each mortgage purchase transaction be specifically reviewed by the Bank's board of directors.