State Codes and Statutes
Statutes > Utah > Title-07 > Chapter-07 > 7-7-157-7-15. Fiduciary relationship of directors and officers to association -- Disclosurerequirements -- Prohibitions -- Violations as misdemeanors.
(1) (a) Directors and officers occupy fiduciary relationships to the association of whichthey are directors or officers. No director or officer may engage or participate, directly orindirectly, in any business or transaction conducted on behalf of or involving the association,which would result in a conflict of his own personal interests with those of the association whichhe serves, unless:
(i) the business or transactions are conducted in good faith and are honest, fair, andreasonable to the association;
(ii) a full disclosure of the business or transactions and the nature of the director's orofficer's interest is made to the board of directors;
(iii) the business or transactions are approved in good faith by the board of directors, anyinterested director abstaining; and
(iv) the business or transactions do not represent a breach of the officer's or director'sfiduciary duty and are not fraudulent, illegal, or ultra vires.
(b) Without limitation by any of the specific provisions of this section, the supervisormay require the disclosure by directors, officers and employees of their personal interest, director indirect, in any business or transaction on behalf of or involving the association and of theircontrol of or active participation in enterprises having activities related to the business of theassociation.
(2) The following express restrictions governing the conduct of directors and officers ofassociations shall apply, but may not be construed in any manner as excusing those persons fromthe observance of any other aspect of the general fiduciary duty owed by them to the associationwhich they serve:
(a) No officer or director of an association may, without the prior written approval of thecommissioner, serve as a director or officer of another savings institution, the principal office ofwhich is located in the same community as an office of the association, unless he served asdirector or officer of both institutions before the effective date of this act.
(b) A director may not receive remuneration as a director, except reasonable fees forservice as a director or for service as a member of a committee of directors. This Subsection(2)(b) does not prohibit or in any way limit any right of a director who is also an officer,employee, or attorney for the association to receive compensation for service as an officer,employee, or attorney.
(c) No director or officer may have any interest, directly or indirectly, in the proceeds ofa loan or investment or of a purchase or sale made by the association, unless the loan,investment, purchase, or sale is authorized expressly by resolution of the board of directors, andunless the resolution is approved by vote of at least two-thirds of the directors authorized of theassociation, any interested director taking no part in the vote.
(d) No director or officer may have any interest, direct or indirect, in the purchase at lessthan its face value of any evidence of a savings account, deposit or other indebtedness issued bythe association.
(e) An association or a director, officer, or employee of an association may not require,as a condition to the granting of any loan or the extension of any other service by the association,that the borrower or any other person undertake a contract of insurance or any other agreement orunderstanding with respect to the furnishing of any other goods or services, with any specific
company, agency, or individual.
(f) No officer or director acting as proxy for a member or stockholder of an associationmay exercise, transfer, or delegate the proxy vote or votes in consideration of a private benefit oradvantage, direct or indirect, accruing to himself, nor may he surrender control or pass his officeto any other for any consideration of a private benefit or advantage, direct or indirect. The votingrights of members and directors may not be the subject of sale, barter, exchange, or similartransaction, either directly or indirectly. Any officer or director who violates this Subsection(2)(f) shall be held accountable to the association for any increment.
(g) No director or officer may solicit, accept, or agree to accept, directly or indirectly,from any person other than the association any gratuity, compensation or other personal benefitfor any action taken by the association or for endeavoring to procure any such action.
(h) Any person violating any of the specific prohibitions set forth in Subsections (2)(a)through (g) is guilty of a class C misdemeanor.
Amended by Chapter 324, 2010 General Session
Amended by Chapter 378, 2010 General Session
