{"data":{"id":"us-md/md.-code-financial-institutions-5-512","jurisdiction":"us-md","citation":"Md. Code, Financial Institutions § 5–512","heading":"","body":"(a) (1) In this section the following words have the meanings indicated.\n(2) “Commercial loan” means a loan that is made:\n(i) Solely to acquire or carry on a business or commercial enterprise; or\n(ii) To any business or commercial organization.\n(3) “Consumer loan” means a loan that is made primarily for personal, family, or household purposes.\n(4) “Executive officer” has the meaning stated in Title 12 of the Code of Federal Regulations, § 215.2.\n(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:\n(1) Any director, officer, or employee of the banking institution;\n(2) Any partnership of which the director, officer, or employee is a member; or\n(3) Any corporation in which the director, officer, or employee is an officer or owns the majority interest.\n(c) This section does not require approval of:\n(1) A commercial loan that is made to:\n(i) A director of the banking institution, unless the director also is an officer or employee of the banking institution;\n(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\n(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\n(2) A loan that is:\n(i) A consumer loan; and\n(ii) Is made to an employee of a banking institution who is not an executive officer or director of the banking institution.\n(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:\n(i) The board of directors of the banking institution; or\n(ii) The executive committee of the banking institution, if that committee is authorized to make loans.\n(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.\n(e) (1) A loan made under this section shall be reviewed every 6 months by the board of directors.\n(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.\n(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.","path":["Article - Financial Institutions"],"source_url":"https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=gfi\u0026section=5-512","current_through":"2026-01-01","vintage":"","retrieved_at":"2026-09-14T19:58:27Z","sha256":"fd103f60e9b5530b495ea548dfc9ca2691bc330f0e3aadfa172a8859648d47a9","source_id":"us-md","stale":false,"prev":"us-md/md.-code-financial-institutions-5-511","next":"us-md/md.-code-financial-institutions-5-513"},"notice":"GroundRules: Original legal text. Not legal advice."}