C.F.R. » Title 12 » CHAPTER II—FEDERAL RESERVE SYSTEM › SUBCHAPTER A—BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM › PART 207—DISCLOSURE AND REPORTING OF CRA-RELATED AGREEMENTS (REGULATION G)

12 C.F.R. § 207.2

Definition of covered agreement

Read at: eCFRecfr.gov CornellLII GovInfogovinfo.gov CasesGoogle Scholar

(a) General definition of covered agreement. A covered agreement is any contract, arrangement, or understanding that meets all of the following criteria—

(1) The agreement is in writing.

(2) The parties to the agreement include—

(i) One or more insured depository institutions or affiliates of an insured depository institution; and

(ii) One or more nongovernmental entities or persons (referred to hereafter as NGEPs).

(3) The agreement provides for the insured depository institution or any affiliate to—

(i) Provide to one or more individuals or entities (whether or not parties to the agreement) cash payments, grants, or other consideration (except loans) that have an aggregate value of more than $10,000 in any calendar year; or

(ii) Make to one or more individuals or entities (whether or not parties to the agreement) loans that have an aggregate principal amount of more than $50,000 in any calendar year.

(4) The agreement is made pursuant to, or in connection with, the fulfillment of the Community Reinvestment Act of 1977 (12 U.S.C. 2901 et seq.) (CRA), as defined in § 207.4.

(5) The agreement is with a NGEP that has had a CRA communication as described in § 207.3 prior to entering into the agreement.

(b) Examples concerning written arrangements or understandings—(1) Example 1. A NGEP meets with an insured depository institution and states that the institution needs to make more community development investments in the NGEP's community. The NGEP and insured depository institution do not reach an agreement concerning the community development investments the institution should make in the community, and the parties do not reach any mutual arrangement or understanding. Two weeks later, the institution unilaterally issues a press release announcing that it has established a general goal of making $100 million of community development grants in low- and moderate-income neighborhoods served by the insured depository institution over the next 5 years. The NGEP is not identified in the press release. The press release is not a written arrangement or understanding.

(2) Example 2. A NGEP meets with an insured depository institution and states that the institution needs to offer new loan programs in the NGEP's community. The NGEP and the insured depository institution reach a mutual arrangement or understanding that the institution will provide additional loans in the NGEP's community. The institution tells the NGEP that it will issue a press release announcing the program. Later, the insured depository institution issues a press release announcing the loan program. The press release incorporates the key terms of the understanding reached between the NGEP and the insured depository institution. The written press release reflects the mutual arrangement or understanding of the NGEP and the insured depository institution and is, therefore, a written arrangement or understanding.

(3) Example 3. An NGEP sends a letter to an insured depository institution requesting that the institution provide a $15,000 grant to the NGEP. The insured depository institution responds in writing and agrees to provide the grant in connection with its annual grant program. The exchange of letters constitutes a written arrangement or understanding.

(c) Loan agreements that are not covered agreements. A covered agreement does not include—

(1) Any individual loan that is secured by real estate; or

(2) Any specific contract or commitment for a loan or extension of credit to an individual, business, farm, or other entity, or group of such individuals or entities, if—

(i) The funds are loaned at rates that are not substantially below market rates; and

(ii) The loan application or other loan documentation does not indicate that the borrower intends or is authorized to use the borrowed funds to make a loan or extension of credit to one or more third parties.

(d) Examples concerning loan agreements—(1) Example 1. An insured depository institution provides an organization with a $1 million loan that is documented in writing and is secured by real estate owned or to-be-acquired by the organization. The agreement is an individual mortgage loan and is exempt from coverage under paragraph (c)(1) of this section, regardless of the interest rate on the loan or whether the organization intends or is authorized to re-loan the funds to a third party.

(2) Example 2. An insured depository institution commits to provide a $500,000 line of credit to a small business that is documented by a written agreement. The loan is made at rates that are within the range of rates offered by the institution to similarly situated small businesses in the market and the loan documentation does not indicate that the small business intends or is authorized to re-lend the borrowed funds. The agreement is exempt from coverage under paragraph (c)(2) of this section.

(3) Example 3. An insured depository institution offers small business loans that are guaranteed by the Small Business Administration (SBA). A small business obtains a $75,000 loan, documented in writing, from the institution under the institution's SBA loan program. The loan documentation does not indicate that the borrower intends or is authorized to re-lend the funds. Although the rate charged on the loan is well below that charged by the institution on commercial loans, the rate is within the range of rates that the institution would charge a similarly situated small business for a similar loan under the SBA loan program. Accordingly, the loan is not made at substantially below market rates and is exempt from coverage under paragraph (c)(2) of this section.

(4) Example 4. A bank holding company enters into a written agreement with a community development organization that provides that insured depository institutions owned by the bank holding company will make $250 million in small business loans in the community over the next 5 years. The written agreement is not a specific contract or commitment for a loan or an extension of credit and, thus, is not exempt from coverage under paragraph (c)(2) of this section. Each small business loan made by the insured depository institution pursuant to this general commitment would, however, be exempt from coverage if the loan is made at rates that are not substantially below market rates and the loan documentation does not indicate that the borrower intended or was authorized to re-lend the funds.

(e) Agreements that include exempt loan agreements. If an agreement includes a loan, extension of credit or loan commitment that, if documented separately, would be exempt under paragraph (c) of this section, the exempt loan, extension of credit or loan commitment may be excluded for purposes of determining whether the agreement is a covered agreement.

(f) Determining annual value of agreements that lack schedule of disbursements. For purposes of paragraph (a)(3) of this section, a multi-year agreement that does not include a schedule for the disbursement of payments, grants, loans or other consideration by the insured depository institution or affiliate, is considered to have a value in the first year of the agreement equal to all payments, grants, loans and other consideration to be provided at any time under the agreement.

Notes of Decisions
Cited in 8 cases, 1969–1988 · leading case: Revlon, Inc. v. Pantry Pride, Inc., 621 F. Supp. 804 (D. Del. 1985).
Sort: Relevance Newest Treatment
Revlon, Inc. v. Pantry Pride, Inc., 621 F. Supp. 804 (D. Del. 1985). “12 CFR §§ 207.2 (h), 207.3(a). However, the Federal Reserve Board staff has explicitly exempted purchasers of public offerings of debt securities from the definition of “lender” under Regulation G.”
Pabst Brewing Co. v. Kalmanovitz, 551 F. Supp. 882 (D. Del. 1982). “This is so because the Board of Governors of the Federal Reserve System has published a list, pursuant to 12 C.F.R. §§ 207.2 (f), 220.2(e) and 221.”
Koppers Co., Inc. v. Am. Exp. Co., 689 F. Supp. 1371 (W.D. Pa. 1988). “See 12 C.F.R. 207.2(f)(2)(iv). (e) The Board is of the view that .”
Metro-Goldwyn-Mayer, Inc. v. Transamerica Corp., 303 F. Supp. 1354 (S.D.N.Y. 1969). · cites it 2× “” 12 C.F.R. § 207.2 (c) (1). “Registered equity securities” include, inter alia, “any equity security which * * * is registered on a national securities exchange.”
Koppers Co. v. Am. Express Co., 689 F. Supp. 1408 (W.D. Pa. 1988). “12 C.F.R. § 207.2 (i). . NatWest is therefore subject to the Bank Holding Company Act, 12 U.”
Nat'l Bank of North Am. v. Quest, 425 F. Supp. 186 (E.D.N.Y 1977). “” 12 CFR § 207.2 (b). The terms of the agreement provided that the Bank could at any time apply any or all of the proceeds from any of the collateral to the payment in whole or in part of any of the obligations.”
Cardiff Acquisitions, Inc. v. Hatch, 751 F.2d 917 (8th Cir. 1984). “§ 78g (1982) and 12 C.F.R. §§ 207.2 , 207.5 and 224 (1984), and the Investment Company Act of 1940, 15 U.”
Caldwell v. Genesco Employees Credit Ass'n, 393 F. Supp. 741 (M.D. Tenn. 1975). · cites it 5× “The parties have stipulated that Genesco stock is a “margin security” as defined by 12 C.F.R. § 207.2 (d). The court finds that defendant’s credit activity therefore exceeded the minimum monetary limits of Regulation G for loans secured by “margin securities” as defined by 12 C.”
— 12 C.F.R. § 207.2(f)(2)(iv) — 1 case
Koppers Co., Inc. v. Am. Exp. Co., 689 F. Supp. 1371 (W.D. Pa. 1988). “See 12 C.F.R. 207.2(f)(2)(iv). (e) The Board is of the view that .”
Annotations are extracted automatically from the opinions in the Syfert caselaw corpus and ranked by authority, recency, and treatment. Dots show Syfertize treatment of the citing case itself.