Borrowing From or Lending to Customers

What this video covers

• Why the Written Supervisory Procedures (WSPs) override every regulatory exception, and how the exam traps you into thinking exceptions are standalone permissions
• The five exceptions to the borrowing/lending ban: immediate family, financial institutions, same-firm registered persons, outside personal relationships, and outside business relationships
• Which two exceptions allow WSPs to waive notice and approval, and which three always require explicit principal sign-off
• The modernized immediate-family definition: spouse or domestic partner replacing husband or wife, plus step and adoptive relationships, and the stricter two-prong catch-all test
• How effective-date mechanics work: new arrangements, new broker-customer relationships, and modifications trigger the modernized rule, with no retroactivity for pre-existing loans
• Why a technically compliant family loan can still violate commercial honor, elder abuse standards, or the misuse-of-customer-assets prohibition
• The distinction between waiving paperwork and waiving supervisory obligations, and why principals remain on the hook even when WSPs skip the approval step