Section 23B. Restrictions on Transactions with Affiliates (a) In General. Terms. A member bank and its subsidiaries may engage in any of the transactions described in paragraph (2) only--

Sections 23A and 23B of the Federal Reserve Act (12 U.S.C. 371c, 371c-1) establish certain quantitative limits and other prudential requirements for loans, purchases of assets, and certain other transactions between a member bank and its affiliates.

Regulation W prohibit a bank from accepting low-quality assets as collateral for a covered transaction, as well as intangible assets, guarantees, letters of credit, and equity securities of the lending bank.

Jun 29, 2022 · Regulation W, the rule that implements sections 23A and 23B of the Federal Reserve Act, was published on Dec. 12, 2002, and came into effect on April 1, 2003. Sections 23A and 23B,...

Generally, a savings association is treated like a member bank under sections 23A and 23B. A savings association may not make a loan or extension of credit to any affiliate unless the affiliate is engaged only in activities that the Board, by regulation, determines to be permissible for BHCs under section 4(c) of the BHC Act.

Regulation W applies to covered transactions between a bank and a bank affiliate. The definition of affiliate for purposes of Regulation W, set forth in Section 223.2, is broad, and includes:

Section 23A of the Federal Reserve Act imposes quantitative, collateral and safety and soundness restrictions on certain “covered transactions” such as a bank’s loans to, and purchases of assets from affiliates. Section 23B generally requires transactions with affiliates to …

On December 12, 2002, Regulation W, the rule that comprehensively implements sections 23A and 23B of the Federal Reserve Act, was published in the Federal Register. 1 The rule is effective April 1, 2003.

Sec. 223.71 How do sections 23A and 23B apply to transactions in which a member bank purchases from one affiliate an asset relating to another affiliate? Subpart I–Savings Associations—Transactions with Affiliates

The “arm’s length,” market terms requirement of 23B and Regulation W apply to all of the transaction types described above that are subject to the 23A capital-based limitations, as well as to the following types of transactions: • The sale of securities or other assets to an affiliate, including assets subject to an agreement to repurchase.