Final Regulation W
December 4, 2002
Circular No. 11477

To All Depository Institutions and Others Concerned in the Second Federal Reserve District:

In a November 27, 2002 press release, the Federal Reserve Board issued a final Regulation W that comprehensively implements sections 23A and 23B of the Federal Reserve Act. These statutory provisions and Regulation W restrict loans by a depository institution to its affiliates, asset purchases by a depository institution from its affiliates, and other transactions between a bank and its affiliates. Regulation W unifies in one public document the Board's interpretation of sections 23A and 23 B.

Final Regulation W will have an effective date of April 1, 2003.

The Board also published a final rule that rescinds, as of April 1, 2003, the Board's existing formal interpretations of sections 23A and 23B (which have been incorporated into Regulation W).

In addition, the Board is seeking public comment on a proposed rule that would prevent a depository institution from using an exemption in Regulation W for the purchase of extensions of credit from an affiliate if purchases are made under the exemption exceeded 100 percent of the institution's capital. Comments are to be submitted by January 13, 2003.

The Board's notices are attached to its November 27 press release.

Questions on this matter may be directed at this Bank to James V. Keogh, Examining Officer, Legal & Compliance Risk Department.