The Office of the Comptroller of the Currency (OCC) published a notice in the Federal Register on November 25, 2025, soliciting public comments on the renewal of an information collection titled "Extensions of Credit to Insiders and Transactions with Affiliates." This action, required under the Paperwork Reduction Act of 1995 (PRA), aims to maintain regulatory oversight of national banks and federal savings associations' dealings with insiders and affiliates. The notice, appearing in Volume 90, Number 225, invites feedback by January 26, 2026, to assess the collection's necessity and burden. This development underscores ongoing efforts to balance regulatory compliance with reducing administrative burdens on financial institutions, potentially influencing how banks manage internal transactions and seek exemptions from affiliate rules.
Background on Regulatory Framework
The information collection stems from federal banking laws designed to prevent abuses in lending and transactions within financial institutions. National banks and federal savings associations must adhere to the Federal Reserve Board's Regulation O (12 CFR part 215), which governs extensions of credit to insiders such as executives, directors, and principal shareholders, implementing section 22(h) of the Federal Reserve Act (12 U.S.C. 375b). Similarly, Regulation W (12 CFR part 223) addresses transactions with affiliates, enforcing sections 23A and 23B of the Federal Reserve Act (12 U.S.C. 371c and 371c-1), with additional provisions from section 11 of the Home Owners' Loan Act (12 U.S.C. 1468) for savings associations.
These regulations, incorporated into OCC rules at 12 CFR part 31, aim to limit risks from self-dealing and ensure arms-length dealings. For instance, Regulation O restricts insider loans to prevent preferential treatment that could undermine bank stability, while Regulation W caps covered transactions with affiliates and requires collateral for certain extensions of credit. The OCC's Appendix A to part 31 offers guidance on applying Regulation W to interbank deposits, clarifying permissible activities. This framework traces back to the Federal Reserve Act amendments and was bolstered by post-financial crisis reforms, reflecting a historical emphasis on prudential supervision to protect depositors and the broader financial system.
Details of the Information Collection
The collection primarily involves recordkeeping and reporting to comply with these regulations, but the notice highlights a specific component: procedures for requesting exemptions from affiliate transaction limits. Under section 31.3(c), the OCC implements exemption authority granted by section 608 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, effective July 21, 2012. This amends section 23A of the Federal Reserve Act and section 11 of the Home Owners' Loan Act, allowing the OCC to exempt transactions if deemed in the public interest, consistent with statutory purposes, and not posing unacceptable risk to the Deposit Insurance Fund, subject to joint findings with the Federal Reserve Board and no objection from the Federal Deposit Insurance Corporation.
Section 31.3(d) outlines the exemption request process, modeled after Regulation W. Banks must submit a written request to the OCC's Deputy Comptroller for Licensing, with a copy to the appropriate Federal Reserve Bank. The request must detail the transaction, explain the need for exemption, demonstrate public interest and statutory consistency, and argue minimal risk to the fund. This process ensures transparency and interagency coordination, with the OCC estimating one respondent annually, at 10 hours per response, totaling 10 burden hours. The notice classifies this as an occasional response affecting businesses, with OMB Control Number 1557-0336.
Key Players and Legal Precedents
The OCC, as the primary regulator for national banks and federal savings associations, leads this renewal, coordinating with the Federal Reserve Board and FDIC. The PRA mandates this review to minimize paperwork while ensuring data utility, as defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c). Precedents include the original enactment of sections 23A and 23B in the 1930s to curb banking abuses during the Great Depression, and Dodd-Frank's enhancements post-2008 crisis to address systemic risks from affiliate exposures.
Court cases like Board of Governors v. Dimension Financial Corp. (474 U.S. 361, 1986) have affirmed broad regulatory authority over affiliate transactions, emphasizing safety and soundness. Political forces include industry pushes for deregulation to ease burdens, contrasted by consumer advocates' calls for stricter oversight to prevent another crisis. Banks view exemptions as vital for operational flexibility, while regulators prioritize risk mitigation, creating a tension between innovation and stability.
Implications and Perspectives
In the short term, the renewal maintains existing compliance requirements, potentially prompting comments that could refine the process. Long-term, it supports financial stability by enabling tailored exemptions, reducing the risk of rigid rules stifling legitimate activities. For example, during economic stress, exemptions might facilitate liquidity among affiliates without undue risk.
Different perspectives highlight varied interests: financial institutions may argue the 10-hour burden underestimates complex requests, seeking streamlined procedures to cut costs. Regulators emphasize the collection's role in upholding Dodd-Frank's safeguards, ensuring exemptions align with public interest. Public stakeholders, including academics, might focus on transparency, advocating for broader disclosure to monitor potential abuses. Without endorsing views, these reflect debates on regulatory efficiency versus robust oversight.
The OCC's notice advances the PRA process, with a subsequent 30-day comment period before OMB submission. Potential trajectories include adjustments to burden estimates or procedural tweaks based on feedback, addressing ongoing challenges like evolving financial products that test affiliate rules. Debates may center on balancing deregulation trends with post-Dodd-Frank protections, influencing future banking supervision.
