Which of the following transactions is subject to the provisions of Regulation O?
Which of the following transactions is subject to the provisions of Regulation O?
Regulation O governs extensions of credit to executive officers, directors, and principal shareholders of member banks, and their related interests. It ensures that these loans are made on terms no more favorable than those available to other customers, to prevent conflicts of interest. Therefore, an extension of credit to a member of the bank's board of directors is the correct transaction subject to the provisions of Regulation O.
Regulation O governs any extensions of credit to executive officers, directors, and principal shareholders of member banks, and their related interests. It's designed to prevent conflicts of interest and ensure that loans to insiders are made on terms no more favorable than those available to other customers. Therefore, the correct answer is D. Extension of credit to a member of the bank's board of directors. This option directly involves a transaction that Regulation O is intended to regulate, focusing on extensions of credit to insiders of the bank.