### Question
How is the "covered transaction" defined?


### Answer
The term **covered transaction** is defined in *12 U.S.C. § 371c* as follows -

> 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**

