1090

LAWS OF MARYLAND

Ch. 282

EACH DIRECTOR, OFFICER, AND CONTROLLING PERSON OF A SAVINGS
AND LOAN ASSOCIATION SHALL:

(1)  ACT IN A FIDUCIARY CAPACITY TOWARDS THE
ASSOCIATION, AND THE ASSOCIATION'S MEMBERS, STOCKHOLDERS, AND
DEPOSITORS; AND

(2)  DISCHARGE DUTIES AND THEIR RESPECTIVE POSITIONS
IN GOOD FAITH, AND WITH THE SAME DILIGENCE AND CARE THAT AN
ORDINARILY PRUDENT PERSON WOULD EXERCISE UNDER A SIMILAR
CIRCUMSTANCE IN A LIKE POSITION.

(B)  CONFLICT OF INTEREST.

A DIRECTOR, OFFICER, CONTROLLING PERSON, OR EMPLOYEE OF A
SAVINGS AND LOAN ASSOCIATION MAY NOT PLACE HIMSELF IN A POSITION
THAT CREATES A CONFLICT OF INTEREST.

(C)  LOANS PROHIBITED.

EXCEPT AS OTHERWISE PROVIDED IN SUBSECTION (D) OF THIS
SECTION, A SAVINGS AND LOAN ASSOCIATION OR A RELATED ENTITY MAY
NOT MAKE OR RENEW A LOAN OR EXTENSION OF CREDIT DIRECTLY OR
INDIRECTLY TO:

(1)  ANY CONTROLLING PERSON, DIRECTOR, OFFICER, OR
EMPLOYEE OF THE ASSOCIATION, OR A MEMBER OF ANY OF THEIR
IMMEDIATE FAMILIES; OR

(2)  ANY CORPORATION, ASSOCIATION, PARTNERSHIP, TRUST
OR OTHER ENTITY IN WHICH AN INTEREST OF 10 PERCENT OR MORE IS
OWNED BY A CONTROLLING PERSON, DIRECTOR, OFFICER, OR EMPLOYEE THE
CONTROLLING PERSONS, DIRECTORS, OFFICERS, OR EMPLOYEES OF THE
ASSOCIATION, OR A—MEMBER MEMBERS OF ANY OF THEIR IMMEDIATE
FAMILIES.

(D) LOANS PERMITTED.

A LOAN IS NOT PROHIBITED BY SUBSECTION (A) OF THIS SECTION

IF THE LOAN IS:

(1) SECURED BY THE BORROWER'S PRINCIPAL RESIDENCE, IF
THE APPRAISED VALUE, AS DETERMINED BY A DISINTERESTED APPRAISER,
EXCEEDS BY 20 PERCENT THE TOTAL AMOUNT OF THE LOAN AND ALL PRIOR

LIENS; OR

(2) SECURED BY THE BORROWER'S SAVINGS ACCOUNT IN THE
ASSOCIATION, SUBJECT TO THE REQUIREMENT THAT THE LOAN SECURED BY
A SAVINGS ACCOUNT DOES NOT EXCEED THE WITHDRAWAL VALUE OF THE

ACCOUNT.

(D) LOANS PERMITTED.

(1) SUBJECT TO THE PROVISIONS OF PARAGRAPHS (3) AND
(4) OF THIS SUBSECTION, A LOAN BY A SAVINGS AND LOAN ASSOCIATION