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Can you summarize GACO 7-1-491?
Management > Financing involving directors or officers.
Short Summary
According to the Georgia Code, banks and trust companies are prohibited from providing loans or financing to their directors or policy-making officers on preferential terms. The terms, rates, and conditions of such loans should be comparable to those offered to other borrowers with similar loan requests, credit histories, and collateral. The loans should also be subject to prudent loan underwriting criteria. The approval procedures for these loans should be designed to minimize potential abuse by bank insiders. The history of this provision dates back to 1919, and it has been amended several times since then. Administrative rules and regulations related to loans and discounts can be found in the Official Compilation of the Rules and Regulations of the State of Georgia, Department of Banking and Finance, Banks, Chapter 80-1-5. Various legal references provide additional information on the construction and application of statutes relating to loans to bank officers or directors.
Whom does it apply to?
Banks and trust companies
What does it govern?
Loans or financing extended by a bank or trust company to its directors or policy-making officers
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No specific penalties are mentioned.
Jurisdiction
Georgia