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—
the bank would be authorized to make it to borrowers other than its officers;
it is on terms not more favorable than those afforded other borrowers;
the officer has submitted a detailed current financial statement; and
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.
A member bank may make a loan to any executive officer of the bank if, at the time the loan is made—
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
no other loan by the bank to the officer under authority of this paragraph is outstanding.
[Dec. 23, 1913, ch. 6, § 22(g)], as added [June 16, 1933, ch. 89, § 12], [48 Stat. 182]; amended [June 14, 1935, ch. 245], [49 Stat. 375]; [Aug. 23, 1935, ch. 614], title III, § 326(c), [49 Stat. 716]; [Apr. 25, 1938, ch. 173], [52 Stat. 223]; [June 20, 1939, ch. 214, § 1], [53 Stat. 842]; [Pub. L. 90–44, § 1], July 3, 1967, [81 Stat. 109]; [Pub. L. 95–630, title I, § 110], Nov. 10, 1978, [92 Stat. 3665]; [Pub. L. 97–320, title IV, § 421], Oct. 15, 1982, [96 Stat. 1522]; [Pub. L. 103–325, title III, § 334(a)], Sept. 23, 1994, [108 Stat. 2233]; [Pub. L. 109–351, title VI, § 601(a)], Oct. 13, 2006, [120 Stat. 1978].)