TITLE IV - ENHANCED FINANCIAL DISCLOSURES
SEC. 402. ENHANCED CONFLICT OF INTEREST PROVISIONS.
(a) PROHIBITION ON PERSONAL LOANS TO EXECUTIVES. - Section 13 of the Securities
Exchange Act of 1934 (15 U.S.C. 78m), as amended by this Act, is amended by
adding at the end the following:
"(k) PROHIBITION ON PERSONAL LOANS TO EXECUTIVES. -
"(1) IN GENERAL. - It shall be unlawful for any issuer
(as defined in section 2 of the Sarbanes-Oxley Act of 2002), directly or indirectly,
including through any subsidiary, to extend or maintain credit, to arrange for
the extension of credit, or to renew an extension of credit, in the form of
a personal loan to or for any director or executive officer (or equivalent thereof)
of that issuer. An extension of credit maintained by the issuer on the date
of enactment of this subsection shall not be subject to the provisions of this
subsection, provided that there is no material modification to any term of any
such extension of credit or any renewal of any such extension of credit on or
after that date of enactment.
"(2) LIMITATION. - Paragraph (1) does not preclude any
home improvement and manufactured home loans (as that term is defined in section
5 of the Home Owners’ Loan Act (12 U.S.C. 1464)), consumer credit (as
defined in section 103 of the Truth in Lending Act (15 U.S.C. 1602)), or any
extension of credit under an open end credit plan (as defined in section 103
of the Truth in Lending Act (15 U.S.C. 1602)), or a charge card (as defined
in section 127(c)(4)(e) of the Truth in Lending Act (15 U.S.C. 1637(c)(4)(e)),
or any extension of credit by a broker or dealer registered under section 15
of this title to an employee of that broker or dealer to buy, trade, or carry
securities, that is permitted under rules or regulations of the Board of Governors
of the Federal Reserve System pursuant to section 7 of this title (other than
an extension of credit that would be used to purchase the stock of that issuer),
that is -
"(A) made or provided in the ordinary course of the consumer
credit business of such issuer;
"(B) of a type that is generally made available by such
issuer to the public; and
"(C) made by such issuer on market terms, or terms that
are no more favorable than those offered by the issuer to the general public
for such extensions of credit.
"(3) RULE OF CONSTRUCTION FOR CERTAIN LOANS. - Paragraph
(1) does not apply to any loan made or maintained by an insured depository institution
(as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)),
if the loan is subject to the insider lending restrictions of section 22(h)
of the Federal Reserve Act (12 U.S.C. 375b).".
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