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Personal loans from the candidate

Personal funds

When candidates use their personal funds for campaign purposes, they are making contributions to their campaigns. Unlike other contributions, these candidate contributions are not subject to any limits. They must, however, be reported.

The personal funds of a candidate include each of the following:

  • Assets which the candidate has a legal right of access to or control over, and which he or she has legal title to or an equitable interest in, at the time of candidacy
  • Income from employment
  • Dividends and interest from, and proceeds from sale or liquidation of, stocks and other investments
  • Income from trusts, if established before the election cycle
  • Income from trusts established by bequests (even after candidacy)
  • Bequests to the candidate
  • Personal gifts that had been customarily received by the candidate prior to the beginning of the election cycle
  • Proceeds from lotteries and similar games of chance

Assets jointly held with spouse

A candidate may also use, as personal funds, his other portion of assets owned jointly with a spouse (for example, a checking account or jointly owned stock). If the candidate’s financial interest in an asset is not specified, then the candidate’s share is deemed to be half the value.

Some banks may require a spouse to cosign a loan obtained by the candidate using jointly held assets as collateral. While an endorsement or guarantee of a loan normally constitutes a contribution, in this instance the spouse is not considered a contributor as long as the candidate’s share in the collateral equals or exceeds the amount of the loan.

Not considered the candidate's personal funds

Personal gifts and loans

If any person, including a relative or friend of the candidate, gives or loans the candidate money “for the purpose of influencing any election for federal office,” the funds are not considered personal funds of the candidate even if they are given to the candidate directly. Instead, the gift or loan is considered a contribution from the donor to the campaign, subject to the per-election limit and reportable by the campaign. This is true even if the candidate uses the funds for personal living expenses while campaigning.

Bank loans used in connection with campaign

Bank loans are not considered contributions from the bank if they comply with FEC regulations on bank loans.

When a candidate obtains a bank loan for use in connection with his or her campaign, the loan is considered to be from the bank and not from the candidate’s personal funds. The candidate is acting as the agent of the campaign.

Forgiving personal loans

The candidate may choose to forgive all or a part of a loan from his or her personal funds to the campaign. The candidate must file a signed statement indicating that he or she forgives the loan.

Repaying personal loans

For personal loans (including advances of personal funds or endorsements of bank loans to the committee) from the candidate to his or her authorized committee made on or after November 6, 2002, that aggregate more than $250,000, the following rules apply separately to the primary and general elections:

  • The committee may use contributions to repay the candidate for the entire amount of the loan or loans only if those contributions were made on or before the day of the election; and
  • The committee may use contributions to repay the candidate only up to $250,000 of the personal loans from contributions made after the date of the election.

Furthermore, if the committee uses the amount of cash-on-hand as of the date of the election to repay the candidate for loans in excess of $250,000, it must do so within 20 days of the election. During that time, the committee must treat the portion of candidate loans that exceed $250,000, minus the amount of cash-on-hand as of the day after the election, as a contribution by the candidate.

Note that a runoff election has a separate limit for purposes of FEC regulations. For example, if a candidate loaned the committee $345,000 for the primary election, the committee could repay the candidate up to $250,000 from contributions made after the date of the primary election. Similarly, if the candidate loaned $300,000 for a primary runoff election, the committee could repay the candidate up to $250,000 from contributions made after the date of the runoff election.