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


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

> with respect to an affiliate of a member bank—


(A) a loan or extension of credit to the affiliate

#### Citation:
  - *12 U.S.C. § 371c*
  - Heading: **CHAPTER 2-NATIONAL BANKS > SUBCHAPTER X-POWERS AND DUTIES OF MEMBER BANKS**

