Maryland Financial Institutions Section 5-512

      (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.