(a) A bank may not make a loan to an executive officer or director unless the loan:

1. (1) is made on terms, including interest rate and collateral, that are not more favorable to the executive officer or director than those customarily offered by the bank to persons who are not executive officers or directors and who are not employed by the bank; and

2. (2) does not involve more than the normal risk of repayment or present other unfavorable features.

   (b) Exception.

   Nothing in subdivision (a) of this section shall prohibit any extension of credit made pursuant to a benefit or compensation program:

3. (1) that is widely available to employees of the bank; and

4. (2) does not give preference to any executive officer of director of the bank over other employees of the bank.

   (c) Prior approval.

   A bank may not make a loan to any of its executive officers or directors in an amount that, when aggregated with the unpaid principal amount of all other loans to that person, exceeds the higher of $25,000 or five percent of the bank's capital stock, surplus fund and undivided profits, unless:

5. (1) the loan has been approved in advance by a majority of the entire board of directors of that bank; and

6. (2) the interested party has abstained from participating directly or indirectly in the voting.

   In no event may a bank make a loan to any one of its executive officers or directors in an amount that, when aggregated with all other loans to that person, exceeds $500,000, except by complying with the requirements of this subdivision.