Nevada Revised Statutes 677.650 – Making loan to or purchasing contract or chose in action from officer, director or other specified person prohibited; exception; personal liability
1. Except as otherwise provided in subsection 2, a licensee shall not directly or indirectly make any loan to, or purchase a contract or chose in action from:
Terms Used In Nevada Revised Statutes 677.650
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Contract: A legal written agreement that becomes binding when signed.
- person: means a natural person, any form of business or social organization and any other nongovernmental legal entity including, but not limited to, a corporation, partnership, association, trust or unincorporated organization. See Nevada Revised Statutes 0.039
(a) A person who is an officer, director or holder of record or beneficiary of 10 percent or more of the shares of the licensee;
(b) A person in which an officer, director or holder of record or beneficiary of 10 percent or more of the shares of the licensee directly or indirectly is financially interested; or
(c) A person who acquired the contract directly or indirectly or through intervening assignments from a person described in paragraph (a) or (b), unless the licensee has been authorized by the Commissioner to make that loan or purchase that contract or chose in action from that person.
2. Loans may be made to an officer, director or stockholder of the licensee, upon collateral of his or her deposits with the licensee, of not more than 90 percent of the amount of his or her deposits, at the same rates of interest and under the same terms as loans secured by deposits are offered to members of the general public.
3. Any officer, director or stockholder of a licensee who:
(a) Knowingly and intentionally makes or procures or participates in making or procuring, directly or indirectly, a loan or contract in violation of this section; or
(b) Knowingly approves a loan or contract in violation of this section, is personally liable for any loss resulting to the licensee from the loan or contract, in addition to any other penalties provided by law.