Mississippi Code 1972 (2023) › Title 81 - BANKS AND FINANCIAL INSTITUTIONS (§§ 81-1-1 — 81-29-3) › Chapter 27 - MULTISTATE, STATE AND LIMITED LIABILITY TRUST INSTITUTIONS (§§ 81-27-1.001 — 81-27-8.131) › Article 6 - ADDITIONAL DEFINITIONS; OWNERSHIP; GOVERNANCE; MERGERS (§§ 81-27-6.001 — 81-27-6.408) › Subarticle C - BOARD AND OFFICERS (§§ 81-27-6.201 — 81-27-6.211) › Section 81-27-6.207 - Transactions with management and affiliates

(a)
Without the prior approval of a disinterested majority of the board recorded in the minutes, or if a disinterested majority cannot be obtained the prior written approval of the commissioner, a state trust company may not directly or indirectly:
(1)
Sell or lease an asset of the state trust company to an officer, director, manager, managing participant, or principal shareholder or participant of the state trust company or an affiliate of the state trust company; or
(2)
Purchase or lease an asset in which an officer, director, manager, managing participant, or principal shareholder or participant of the state trust company or an affiliate of the state trust company has an interest; or
(3)
Subject to Section
81-27-5.201
, extend credit to an officer, director, manager, managing participant, or principal shareholder or participant of the state trust company or an affiliate of the state trust company.
(b)
Notwithstanding subsection (a) of this section, a lease transaction described in subsection (a)(2) of this section involving real property may not be consummated, renewed, or extended without the prior written approval of the commissioner. For purposes of this subsection only, an affiliate of the state trust company does not include a subsidiary of the state trust company.
(c)
Subject to Section
81-27-5.201
, a state trust company may not directly or indirectly extend credit to an employee, officer, director, manager, managing participant, or principal shareholder or participant of the state trust company or an affiliate of the state trust company, unless the extension of credit:
(1)
Is made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions by the state trust company with persons who are not employees, officers, directors, managers, managing participants, or principal shareholders, participants or affiliates of the state trust company; and
(2)
Does not involve more than the normal risk of repayment or present other unfavorable features; and
(3)
The state trust company follows credit underwriting procedures that are not less stringent than those applicable to comparable transactions by the state trust company with persons who are not employees, officers, directors, managers, managing participants, or principal shareholders, participants or affiliates of the state trust company.
(d)
An officer, director, manager, or managing participant of the state trust company who knowingly participates in or permits a violation of this section is guilty of a felony and, upon conviction thereof, shall be fined not more than Ten Thousand Dollars ($10,000.00), or imprisoned in the State Penitentiary for not more than one (1) year, or both.
(e)
The commissioner may adopt rules or regulations to administer and carry out this section, including rules or regulations to establish limits, requirements, or exemptions other than those specified by this section for particular categories of transactions.
Laws, 1998, ch. 437, § 1, eff. 7/1/1998.