(1) Except as provided by subsection (3) of this section, a cooperative may not lend money to or guarantee the obligation of a director of the cooperative unless:
- (a) The particular loan or guarantee is approved by a majority of the votes of all the members excluding the votes of any member who is a benefited director; or
- (b) The cooperative’s board of directors determines that the loan or guarantee benefits the cooperative and either approves the specific loan or guarantee or a general plan authorizing the loans and guarantees.
- (2) The fact that a loan or guarantee is made in violation of this section does not affect the borrower’s liability on the loan.
- (3) This section does not apply to loans and guarantees authorized by statute regulating any special class of cooperatives.
[1995 c.195 §10]