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Can you summarize 45 NEAC Chapter 16?
Banking Rules > DIRECTOR, OFFICER OR EMPLOYEE BORROWING
Short Summary
This section of the Nebraska Administrative Code, under the Banking and Finance Department, provides interpretation and guidelines regarding the borrowing activities of directors, officers, and employees in relation to banks. According to the Department of Banking and Finance, directors, officers, or employees who directly or indirectly receive funds in exchange for consideration returning to the bank may act as guarantors without falling within the purview of section 8-140. However, there are two instances in which a director, officer, or employee may fall within the purview of section 8-140 even if they are only acting as a guarantor. These instances are when the loan is in default or when the maker clearly does not have the ability or financial capacity to repay the loan, and reliance is being placed upon the guarantor. To avoid a violation of Section 8-140 in these instances, the approval of the board of directors must be obtained for such guarantees prior to giving the guarantee.
Whom does it apply to?
This section applies to directors, officers, and employees of banks.
What does it govern?
This section governs the borrowing activities of directors, officers, and employees in relation to banks.
What are exemptions?
Directors, officers, or employees who act as guarantors may not fall within the purview of section 8-140, except in two instances: when the loan is in default or when the maker clearly does not have the ability or financial capacity to repay the loan and reliance is being placed upon the guarantor. In these instances, the approval of the board of directors must be obtained for such guarantees prior to giving the guarantee.
What are the Penalties?
No specific penalties are mentioned in this section.
Jurisdiction
Nebraska