6.2-1128 - (Effective October 1, 2010) Loans to executive officers or directors. - Virginia Statutes

§ 6.2-1128. (Effective October 1, 2010) Loans to executive officers ordirectors.

A. As used in this section, "executive officer" means an officer of asavings institution who participates or has authority to participate in themajor policy-making functions of the savings institution.

B. No executive officer or director of any savings institution shall borrowany amount more than $25,000 from the institution until such loan has beenapproved by (i) a majority of the directors of the institution or (ii) acommittee of officers and directors that includes at least one directorappointed by the board of directors with authority to approve loans.

C. The following loans or lines of credit shall not be made by an institutionunless specifically approved by (i) a majority of the directors of theinstitution or (ii) a committee of officers and directors that includes atleast one director appointed by the board of directors with authority toapprove loans:

1. Any loan in an amount of $25,000 or more made to any executive officer ordirector of an institution or any entity that the Commission determines iscontrolled by one or more executive officers or directors;

2. Any loan made to the persons or entities described in subdivision 1, theamount of which together with all other obligations, direct or indirect, ofsuch executive officer, director, or controlled entity is $100,000 or more;

3. Any line of credit for $25,000 or more made to the persons or entitiesdescribed in subdivision 1; or

4. Any line of credit made to the persons or entities described insubdivision 1, the amount of which together with all other obligations,direct or indirect, of such executive officer, director, or controlled entityis $100,000 or more.

If approved by the committee described in clause (ii), the approval shall bespecifically reported to the board of directors at its next regular meeting.

D. No extension, renewal, or renegotiation of any loan or line of credit inexcess of the amounts described in subsection C shall be made to any of thoseindividuals or entities or their interests unless it is approved by amajority of the board of directors or by the committee of officers anddirectors appointed by the board. If approved by the committee, such approvalshall be specifically reported to the board of directors at its next regularmeeting.

E. The prohibitions set forth in subsections C and D shall not be construedto require approval by the board of directors for advances under previouslyauthorized lines of credit.

F. The aggregate amount of a savings institution's loans to its executiveofficers or directors or their interests shall not be excessive. TheCommission may adopt such regulations as may be required to prevent excessiveaggregate amounts of lending by savings institutions to those individuals orentities.

(1972, c. 796, § 6.1-195.40:1; 1982, c. 103; 1985, c. 425, § 6.1-194.21;1995, c. 83; 1996, c. 13; 2010, c. 794.)