(a) (1) In this section the following words have the meanings indicated.
(2) “Commercial loan” means a loan that is made:
(i) Solely to acquire or carry on a business or commercial enterprise; or
(ii) To any business or commercial organization.
(3) “Consumer loan” means a loan that is made primarily for personal, family, or household purposes.
(4) “Executive officer” has the meaning stated in Title 12 of the Code of Federal Regulations, § 215.2.
(b) Unless the loan is approved or exempted from approval as provided in this section, the following persons may not borrow, directly or indirectly, any money from a banking institution:
(1) Any director, officer, or employee of the banking institution;
(2) Any partnership of which the director, officer, or employee is a member; or
(3) Any corporation in which the director, officer, or employee is an officer or owns the majority interest.
(c) This section does not require approval of:
(1) A commercial loan that is made to:
(i) A director of the banking institution, unless the director also is an officer or employee of the banking institution;
(ii) A partnership of which the director is a member, unless an officer or employee of the banking institution also is a member of that partnership; or
(iii) A corporation in which the director holds any interest, unless an officer or employee of the banking institution is an officer or owns the majority interest in that corporation; or
(2) A loan that is:
(i) A consumer loan; and
(ii) Is made to an employee of a banking institution who is not an executive officer or director of the banking institution.
(d) (1) A loan to a director, officer, or employee of a banking institution may be made only if the loan has been approved by a resolution adopted at and recorded in the minutes of a meeting of:
(i) The board of directors of the banking institution; or
(ii) The executive committee of the banking institution, if that committee is authorized to make loans.
(2) If a loan is approved by an executive committee, the loan approval shall be reported to the board of directors at its next meeting.
(e) (1) A loan made under this section shall be reviewed every 6 months by the board of directors.
(2) The loan may not be renewed or extended unless the renewal or extension has been approved by a resolution adopted at a meeting of the board of directors and recorded in the minutes of the meeting.
(f) All loans to a director, officer, or employee of a banking institution are subject to the limitations imposed by § 3-601 of this article.