§ 5-6A-26 — Loans or Extension of Credit to Bank Officers and Employees

Alabama § 5-6A-26

• Jurisdiction: Alabama
• Title 5: Banks and Financial Institutions
• Ch. 6A: Directors, Officers, and Employees
• Art. 2: Prohibited Acts

Text

An officer or employee of any bank who shall in any way obtain as a borrower any of the funds of such bank without having first complied with the requirements of this section must on conviction be punished as if he had embezzled the amount borrowed.
Any loan obtained by an officer or employee of a bank must be made in accordance with a written loan policy which has been adopted by the board of directors. Such loans or extensions of credit may be made only if (i) the bank would be authorized to make such loans or extensions of credit to borrowers other than officers and employees and (ii) such loans or extensions of credit to officers and employees do not involve more than the normal risk of repayment or present other unfavorable features. All such loans, extensions of credit, or lines of credit to an officer must be reported to the board of directors at its next meeting.

Legislative History

(Acts 1980, No. 80-658, §5-6-26.)