US Code

Public Law 119-88 (05/04/2026)

12 U.S.C. § 375a

Loans to executive officers of banks

(1)

General prohibition; authorization for extension of credit; conditions for credit

Except as authorized under this section, no member bank may extend credit in any manner to any of its own executive officers. No executive officer of any member bank may become indebted to that member bank except by means of an extension of credit which the bank is authorized to make under this section. Any extension of credit under this section shall be promptly reported to the board of directors of the bank, and may be made only if—
(A)
the bank would be authorized to make it to borrowers other than its officers;
(B)
it is on terms not more favorable than those afforded other borrowers;
(C)
the officer has submitted a detailed current financial statement; and
(D)
it is on condition that it shall become due and payable on demand of the bank at any time when the officer is indebted to any other bank or banks on account of extensions of credit of any one of the three categories respectively referred to in paragraphs (2), (3), and (4) in an aggregate amount greater than the amount of credit of the same category that could be extended to him by the bank of which he is an officer.
(2)

Mortgage loans

A member bank may make a loan to any executive officer of the bank if, at the time the loan is made—
(A)
it is secured by a first lien on a dwelling which is expected, after the making of the loan, to be owned by the officer and used by him as his residence, and
(B)
no other loan by the bank to the officer under authority of this paragraph is outstanding.
(3)

Educational loans

A member bank may make extensions of credit to any executive officer of the bank to finance the education of the children of the officer.

(4)

General limitation on amount of credit

A member bank may make extensions of credit not otherwise specifically authorized under this section to any executive officer of the bank, in an amount prescribed in a regulation of the member bank’s appropriate Federal banking agency.

(5)

Partnership loans

Except to the extent permitted under paragraph (4), a member bank may not extend credit to a partnership in which one or more of its executive officers are partners having either individually or together a majority interest. For the purposes of paragraph (4), the full amount of any credit so extended shall be considered to have been extended to each officer of the bank who is a member of the partnership.

(6)

Endorsement or guarantee of loans or assets; protective indebtedness

This section does not prohibit any executive officer of a member bank from endorsing or guaranteeing for the protection of the bank any loan or other asset previously acquired by the bank in good faith or from incurring any indebtedness to the bank for the purpose of protecting the bank against loss or giving financial assistance to it.

(7)

Continuation of violation

section 1818 of this titleEach day that any extension of credit in violation of this section exists is a continuation of the violation for the purposes of .

(8)

Rules and regulations; definitions

The Board of Governors of the Federal Reserve System may prescribe such rules and regulations, including definitions of terms, as it deems necessary to effectuate the purposes and to prevent evasions of this section.

Dec. 23, 1913, ch. 6, § 22(g) June 16, 1933, ch. 89, § 12 48 Stat. 182 June 14, 1935, ch. 245 49 Stat. 375 Aug. 23, 1935, ch. 614 49 Stat. 716 Apr. 25, 1938, ch. 173 52 Stat. 223 June 20, 1939, ch. 214, § 1 53 Stat. 842 Pub. L. 90–44, § 181 Stat. 109 Pub. L. 95–630, title I, § 11092 Stat. 3665 Pub. L. 97–320, title IV, § 42196 Stat. 1522 Pub. L. 103–325, title III, § 334(a)108 Stat. 2233 Pub. L. 109–351, title VI, § 601(a)120 Stat. 1978 (, as added , ; amended , ; , title III, § 326(c), ; , ; , ; , , ; , , ; , , ; , , ; , , .)

Editorial Notes

Codification

Proviso which permitted renewal or extension of loans made to executive officers prior to , for periods expiring not more than five years from , was omitted as obsolete.

Amendments

Pub. L. 109–3512006—Pars. (6) to (10). redesignated pars. (7), (8), and (10) as (6), (7), and (8), respectively, and struck out former pars. (6) and (9) which related to report of date and amount of credit extensions, security, and uses of proceeds upon excessive extension of credit and report of loan activity since previous report of condition, respectively.

Pub. L. 103–3251994—Par. (2). in introductory provisions substituted “A member” for “With the specific prior approval of its board of directors, a member”.

Pub. L. 97–320, § 421(a)1982—Par. (2). , struck out “not exceeding $60,000” after “may make a loan”.

Pub. L. 97–320, § 421(a)Par. (3). , struck out “, not exceeding the aggregate amount of $20,000 outstanding at any one time,” after “officer of the bank”.

Pub. L. 97–320, § 421(b)Par. (4). , substituted “in an amount prescribed in a regulation of the member bank’s appropriate Federal banking agency” for “not exceeding the aggregate amount of $10,000 outstanding at any one time”.

Pub. L. 95–6301978—Par. (2). substituted “$60,000” for “$30,000”.

Pub. L. 95–630Par. (3). substituted “$20,000” for “$10,000”.

Pub. L. 95–630Par. (4). substituted “$10,000” for “$5,000”.

Pub. L. 90–441967—Par. (1). rewrote in first sentence of provisions designated as par. (1) the prohibition of former first sentence against any executive officer borrowing or otherwise becoming indebted to a member bank of which he is an officer and against any member bank making any loan or extending credit in any other manner to any of its own executive officers, authorized member banks to extend credit to such executive officers and to report such extensions to the board of directors, and provided in subpars. (A) to (D) conditions for such extension of credit.

Pub. L. 90–44Pars. (2), (3). inserted provisions, designated as pars. (2) and (3), for mortgage loans and educational loans, respectively.

Pub. L. 90–44Par. (4). incorporated proviso of first sentence in provisions designated as par. (4), increased amount of available credit from $2,500 to $5,000, and struck out requirement of prior approval of credit by majority of entire board of directors.

Pub. L. 90–44Par. (5). substituted provisions, designated as par. (5), for extension of credit to partnerships for former provisions of third sentence that “Borrowing by, or loaning to, a partnership in which one or more executive officers of a member bank are partners having either individually or together a majority interest in said partnership, shall be considered within the prohibition of this section”.

Pub. L. 90–44Par. (6). incorporated reporting requirement of second sentence in provisions designated as par. (6) but limited it to extensions of credit from other banks to the executive officers as exceeded amounts available to such officers from their member banks under pars. (2) to (4) of this section.

Pub. L. 90–44Par. (7). designated provisions of fourth sentence as par. (7).

Pub. L. 90–44section 1818 of this titlePar. (8). designated proviso of sixth sentence as par. (8) and identified the violation as one for purposes of .

Pub. L. 90–44Par. (9). added requirement, designated as par. (9), that member banks report all loans made under authority of this section since previous report of condition.

Pub. L. 90–44Par. (10). designated provisions of fifth sentence as par. (10) and substituted general authorization for definition of terms for former specific authorization for definition of “executive officer” and for determination what shall be deemed to be a borrowing, indebtedness, loan, or extension of credit.

Pub. L. 90–44section 77 of this title struck out former sixth sentence, less proviso, which provided for removal from office in manner prescribed in former of any executive officer of member bank accepting a loan or extension of credit in violation of this section.

1939—Act , substituted “,” for “from such date”, in first sentence.

1938—Par. (1). Act , substituted “six” for “five” in first sentence.

1935—Act , added last two provisos.

Act , struck out a proviso and inserted in lieu thereof first proviso.

Statutory Notes and Related Subsidiaries

Effective Date of 1978 Amendment

Pub. L. 95–630section 375b of this titleAmendment effective upon expiration of 120 days after , see sec. 2101 of set out as an Effective Date note under .