HARRY HUGHES, Governor

443

In this section, the present specification that
the financial statement is prepared by "{t}he
president of every association, or if so provided
by the bylaws, some other officer thereof" is
deleted as unnecessary.

As to "member", see § 9-301 of this subtitle.

"Division Director" and "savings and loan
association" are defined in § 9—101 of this
title.

9-306. CONFLICT OF INTEREST.

(A)   LOANS PROHIBITED TO DIRECTOR, OFFICER, OR
EMPLOYEE.

EXCEPT AS PROVIDED IN SUBSECTION (B) OF THIS SECTION, A
SAVINGS AND LOAN ASSOCIATION MAY NOT MAKE A LOAN TO:

(1)   ANY DIRECTOR, OFFICER, OR EMPLOYEE OF THE
ASSOCIATION; OR

(2)   ANY CORPORATION OR BUSINESS IN WHICH AN
INTEREST OF 10 PERCENT OR MORE IS OWNED BY A DIRECTOR,
OFFICER, OR EMPLOYEE OF THE ASSOCIATION OR A MEMBER OF THE
FAMILY OF A DIRECTOR, OFFICER, OR EMPLOYEE.

(B)   EXCEPTIONS TO PROHIBITION.

A LOAN IS NOT PROHIBITED BY SUBSECTION (1) OF THIS
SECTION IF THE LOAN IS:

(1)       SECURED BY THE BORROWER'S:

(I)       PRINCIPAL RESIDENCE; OR

(II)       FREE SHARE ACCOUNTS IN THE
ASSOCIATION, PROVIDED THAT THE AMOUNT OF A LOAN SECURED    BY A
FREE SHARE ACCOUNT MAY NOT BE MORE THAN 90 PERCENT OF     THE
WITHDRAWAL VALUE OF THE ACCOUNT; OR

(2)     (I) APPROVED BY A TWO THIRDS VOTE OF THE
BOARD OF DIRECTORS, PROVIDED THAT ANY INTERESTED DIRECTOR
DOES NOT TAKE PART IN THE VOTE;

(II)       APPROVED BY THE DIVISION DIRECTOR;
AND

(III)       SECURED BY COLLATERAL APPRAISED BY A
DISINTERESTED APPRAISER APPOINTED BY THE DIVISION DIRECTOR.

(C)       FREE SHARE ACCOUNTS.

A DIRECTOR, OFFICER, OR EMPLOYEE OF A SAVINGS AND LOAN.
ASSOCIATION MAY NOT BUY AT LESS THAN FACE VALUE ANY INTEREST
IN A FREE SHARE ACCOUNT ISSUED BY THE ASSOCIATION.