|
U.S. Code as of:
01/19/04
Section 375a. Loans to executive officers of banks
(1) General prohibition; authorization for extension of credit;
conditions for credit
Except as authorized under this section, no member bank may
extend credit in any manner to any of its own executive officers.
No executive officer of any member bank may become indebted to that
member bank except by means of an extension of credit which the
bank is authorized to make under this section. Any extension of
credit under this section shall be promptly reported to the board
of directors of the bank, and may be made only if -
(A) the bank would be authorized to make it to borrowers other
than its officers;
(B) it is on terms not more favorable than those afforded other
borrowers;
(C) the officer has submitted a detailed current financial
statement; and
(D) it is on condition that it shall become due and payable on
demand of the bank at any time when the officer is indebted to
any other bank or banks on account of extensions of credit of any
one of the three categories respectively referred to in
paragraphs (2), (3), and (4) in an aggregate amount greater than
the amount of credit of the same category that could be extended
to him by the bank of which he is an officer.
(2) Mortgage loans
A member bank may make a loan to any executive officer of the
bank if, at the time the loan is made -
(A) it is secured by a first lien on a dwelling which is
expected, after the making of the loan, to be owned by the
officer and used by him as his residence, and
(B) no other loan by the bank to the officer under authority of
this paragraph is outstanding.
(3) Educational loans
A member bank may make extensions of credit to any executive
officer of the bank to finance the education of the children of the
officer.
(4) General limitation on amount of credit
A member bank may make extensions of credit not otherwise
specifically authorized under this section to any executive officer
of the bank, in an amount prescribed in a regulation of the member
bank's appropriate Federal banking agency.
(5) Partnership loans
Except to the extent permitted under paragraph (4), a member bank
may not extend credit to a partnership in which one or more of its
executive officers are partners having either individually or
together a majority interest. For the purposes of paragraph (4),
the full amount of any credit so extended shall be considered to
have been extended to each officer of the bank who is a member of
the partnership.
(6) Report of date and amount of credit extensions, security, and
uses of proceeds upon excessive extension of credit
Whenever an executive officer of a member bank becomes indebted
to any bank or banks (other than the one to which he is an officer)
on account of extensions of credit of any one of the three
categories respectively referred to in paragraphs (2), (3), and (4)
in an aggregate amount greater than the aggregate amount of credit
of the same category that could lawfully be extended to him by the
bank, he shall make a written report to the board of directors of
the bank, stating the date and amount of each such extension of
credit, the security therefor, and the purposes for which the
proceeds have been or are to be used.
(7) Endorsement or guarantee of loans or assets; protective
indebtedness
This section does not prohibit any executive officer of a member
bank from endorsing or guaranteeing for the protection of the bank
any loan or other asset previously acquired by the bank in good
faith or from incurring any indebtedness to the bank for the
purpose of protecting the bank against loss or giving financial
assistance to it.
(8) Continuation of violation
Each day that any extension of credit in violation of this
section exists is a continuation of the violation for the purposes
of section 1818 of this title.
(9) Report of loan activity since previous report of condition
Each member bank shall include with (but not as part of) each
report of condition and copy thereof filed under section 1817(a)(3)
of this title a report of all loans under authority of this section
made by the bank since its previous report of condition.
(10) Rules and regulations; definitions
The Board of Governors of the Federal Reserve System may
prescribe such rules and regulations, including definitions of
terms, as it deems necessary to effectuate the purposes and to
prevent evasions of this section.
|
|