(a) A public benefit or religious corporation may not directly or indirectly lend money to or guarantee the obligation of a director or officer of the corporation.
(b) A mutual benefit corporation may not directly or indirectly lend money to or guarantee the obligation of a director of the corporation unless:
(1) the loan or guarantee is approved by a majority of all classes of members, except the votes of the affected director, if a member, and any votes controlled directly or indirectly by the affected director shall not be counted; or
(2) the corporation's board of directors determines that the loan or guarantee benefits the corporation and either approves the specific loan or guarantee or a general plan authorizing loans and guarantees or either of them; and
(3) the approving action taken pursuant to (1) or (2) is authorized by the corporation's articles or bylaws.
(c) The fact that a loan or guarantee is made in violation of this section does not affect the borrower's liability on the loan.
HISTORY: 1994 Act No. 384, Section 1.
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