§ 1335 Director Loan Conflict Penalty

Financial Code·California

AI SummaryVerified

This law says a bank director can't vote to give a loan to another director if it's more than what the law allows. If they do, they can get in trouble.

Key Takeaways

•Bank directors can't vote to give big loans to other directors if it breaks the rules.
•If they do, they can be punished for it.
•This is to stop directors from helping each other with money in a bad way.

Example

A bank director tries to vote for a big loan to their friend who is also a director.

If the loan is bigger than what the law allows, the director who voted for it can be charged with a crime.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source

View on CA.gov

§ 1335 Director Loan Conflict Penalty

A director of a bank, organized under the laws of this state, who concurs in any vote or act of the directors of such corporation, or any of them, by which it is intended to make a loan or discount to any director of such corporation, or upon paper upon which any such director is liable or responsible to an amount exceeding the amount allowed by the statutes is guilty of a misdemeanor. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)

Last verified: January 11, 2026

Key Terms

director loan or discount misdemeanor statutory limit

References

Official text at leginfo.legislature.ca.gov
California Legislature. Financial Code. Section 1335.

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Key Takeaways

Example

Key Terms

Related Statutes

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