Legal Interpretations
Federal Reserve Act - 1998 Letters
December 10, 1998
A bank's director made a loan to his son to finance the son's home construction; the son later refinanced the original loan by obtaining a loan from the bank at non-preferential terms and used the proceeds to pay off the original loan from the director. The Board's General Counsel was of the opinion that the bank's loan to the son was subject to the "tangible economic benefit rule" of Regulation O (12 CFR 215.3(f)(1)); but the extension of credit would fall within an exception to that rule provided by section 215.3(f)(2).
April 1, 1998
To Ms. Shirley Taylor of Swiss Avenue Bank, stating that a check could qualify as a cashier's check for purposes of Regulation CC (12 CFR 229) even if it is payable through an institution other than the bank on which it is drawn, provided it meets the four requirements set forth in the definition in section 229(2)(i).