(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.