News about FDIC

On August 4, 2026, the Federal Reserve published a proposal to comprehensively revise Regulation O, which governs bank lending to insiders such as executive officers, directors and principal shareholders, and their related interests. On the same day, the FDIC approved a related proposal to raise and index certain lending thresholds for insiders at FDIC-supervised institutions, with comments due November 4, 2026. Regulation O's dollar thresholds have not been adjusted since 1994 (some since 1979 or 1983), and the proposal would raise them to reflect nominal GDP growth from Q4 1994 to Q4 2025, then adjust them every five years, skipping any period of negative growth. The proposal would also reorganize the regulation into five subparts and implement Dodd-Frank sections 614 and 615, which the Fed has not yet implemented. For larger banks with complex insider and affiliate relationships, the article notes the proposal could be a significant regulatory change-management project.

The Federal Reserve and the FDIC have extended the deadline for comments on a proposal governing bank credit to executive officers, directors, principal shareholders and their related interests to Nov. 4, after commenters requested more time. The proposal would raise the limit for executive-officer loans not otherwise authorized by law, such as auto loans and unsecured personal loans, from $100,000 to $400,000. It would also raise the aggregate insider credit threshold requiring prior board approval from $500,000 to $2 million. The agencies further propose adjusting these thresholds automatically every five years based on changes in nominal U.S. gross domestic product.

The Federal Reserve Board said three enforcement actions against Small Business Bank and its parent are no longer active, with terminations effective Oct. 13 after the Lenexa lender closed on July 17. The terminated actions were a Sept. 1, 2023 cease-and-desist order against the bank and Gardner Bancshares, Inc., a Nov. 13, 2024 order against the bank, and a June 29, 2026 prompt corrective action directive, and the Fed did not explain the terminations. The Kansas Office of the State Bank Commissioner tied the closure to ongoing operating losses, and the FDIC was appointed receiver. The Farmers State Bank of Oakley took over nearly all deposits, while the bank held $73 million in assets and about $69 million in deposits at March 31, 2026. The FDIC estimates the failure will cost the Deposit Insurance Fund about $5.7 million, subject to revision as it sells retained assets.