Update: Fed's insider-lending proposal would raise board-approval threshold to $2 million
Oct. 2, 2026 — This updates our notice on the Fed's extension of the comment period on Regulation O, its rule on bank loans to insiders. The proposal, which Fed staff describe as the first comprehensive update since 1979, would raise the loan size that needs advance approval from a bank's board from $500,000 to $2 million, and the limit on certain unsecured loans to executive officers from $100,000 to $400,000. Its dollar thresholds, last adjusted in 1994, would be indexed to nominal gross domestic product and updated every five years.
It would also stop treating companies held by large fund groups, such as index fund managers, as bank insiders when the fund group meets limits on its stake and influence. Fed staff estimated that fund groups are principal shareholders of 66 banks and might be presumed to control 2,047 companies. Temporary relief on that issue, in place since 2019, expires at the end of 2026 unless renewed. Comments are due Nov. 4.
The wall: How many banks would be affected by the higher thresholds was not estimated in the staff memo, and the final rule may change after comments.
Tier: Confirmed (based on the Federal Reserve staff memo on the proposal)
Sources
- Board of Governors of the Federal Reserve System, staff memo: Proposed Rule to Modernize Regulation O (Bank Lending to Insiders) (June 30, 2026; released July 31, 2026)
- Board of Governors of the Federal Reserve System, announcement of comment-period extension (Oct. 2, 2026)
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