### Question
Can you define what covered transaction means?


### Answer
**Covered transaction** is defined as the following in *12 U.S.C. § 371c*:

> with respect to an affiliate of a member bank—


(A) a loan or extension of credit to the affiliate, including a purchase of assets subject to an agreement to repurchase

#### Citation:
  - *12 U.S.C. § 371c*
  - Heading: **CHAPTER 3-FEDERAL RESERVE SYSTEM > SUBCHAPTER X-POWERS AND DUTIES OF MEMBER BANKS**

