Body credit
In banking, an organ loan is a loan in which the borrower has a particularly close personal and / or legal relationship with the credit institution granting the loan and which could therefore come into a conflict of interest when making a credit decision .
General
The sense and purpose is to counteract dangers due to personal influence or irrelevant considerations that could arise when lending to persons and companies closely associated with the credit institution. The risk of a conflict of interests on the part of the credit institution and its organs should also be countered by effective control mechanisms. The banking supervisory authority saw the danger that personal motives would come to the fore when a loan was granted to these groups or that the necessary care would otherwise be neglected. For this reason, the legislature has decided to regulate such cases of conflict of interests through Section 15 KWG . Article 15 of the KWG was intended to prevent misuse for personal reasons solely by the fact that such loans could only be granted with the unanimous resolution of all the bank's directors and with the express consent of the supervisory body. The legislature has also resolved this conflict of interest between the parties involved by stipulating that body loans are granted at market conditions. Customary market conditions apply if the arm's length principle is met.
content
Individuals and legal entities that are closely related to the bank could exert personal influence on the decisions of a bank . This close relationship can exist in particular through membership in a statutory body of the bank ( management board , supervisory board , general meeting ), from which the body loan derives its name. So, if loans are granted to managers , shareholders , members of the supervisory bodies, authorized signatories and authorized agents and their relatives who are authorized to conduct the entire business , there is a risk that they can influence the loan decision personally and that this decision can no longer be made independently and objectively by the decision-maker can be. According to the legal definition of Section 15 (1) No. 3 KWG, only those bodies that are intended to monitor the management of the institute are to be regarded as supervisory bodies, provided that the supervisory powers are regulated by law. It does not matter whether the supervisory body is required by law or is only permitted optionally, so that the legal form of a GmbH can also fall under the provision if the articles of association provide for the appointment of a supervisory board whose statutory tasks are regulated in Section 52 GmbH Act are. However, since the KWG does not stipulate that a bank must appoint a supervisory body, Section 15 KWG cannot be applied if the appointment of a supervisory body is not mandatory under the respective company law - as under Section 52 GmbHG.
First of all, Section 15 (1) KWG finally lists who is covered as a borrower by the body loan regulation. A total of 12 cases are named in which a close relationship with the bank is irrefutably suspected . Loans to this group of borrowers are not prohibited, but may only be granted on the basis of a unanimous resolution of all managers on market terms (except for other bank employees) and only with the express consent of the supervisory body. The close relationships also include the participation of the lending bank in its borrower if this exceeds 10% of the bank's own funds . The personal interdependence can consist in the fact that a member of the management board of the lending bank sits on the borrower's supervisory board or even performs a management / management task there. In order to ensure independent and objective credit decisions in this area as well, the provisions of Section 15 KWG stipulate the conditions under which a loan to the governing body can be approved.
As is common with loans in the millions and large loans , Section 15 of the KWG uses its own term, which is defined in Section 21 of the KWG. Accordingly, loans to the federal government , a federal state and all other municipal loans as well as all loans that are secured by these do not belong to the body loans . Section 15 (3) of the KWG lists minor cases for which reasons of amount prevent the application of the governing body loan provisions. Section 15 (4) of the KWG stipulates that, as a rule, the body loan decision must precede the loan approval .
Borrowers of loans to organs are also those customers belonging to a group of affiliated customers in accordance with Section 19 (3) KWG within the meaning of Article 4 (1) No. 39 CRR.
Legal consequences
If a loan is granted contrary to the provisions of Section 15 of the KWG, according to Section 17 (1) of the KWG, the managers who culpably breach their duties and the members of the supervisory body who, despite being aware of the intended loan, do not act contrary to their obligations , are liable to the institute as Joint and several debtors for the resulting damage . One in § 16 KWG a. F. The prescribed reporting obligation of the credit institutions for loans to organs ceased to exist in October 1997. Loans to governing bodies that are not granted at market conditions must be backed by hard core capital in accordance with Section 15 (2) KWG in accordance with Article 26 Capital Adequacy Ordinance (CRR). Otherwise, as a risk position , they are subject to the normal capital requirements of the CRR.
Organ credit in stock corporation law
Section 3.9 of the German Corporate Governance Code also regulates how companies that have submitted to the Code should deal with body loans:
- The granting of loans by the company to members of the management board and the supervisory board as well as their relatives requires the approval of the supervisory board.
This has also been incorporated into the provision of Section 89 of the German Stock Corporation Act, which also includes executive employees, their wives and minor children. Such loans to organs require the approval of the Supervisory Board.
International
Austria
According to § 28 Banking Act (BWG) there is a similar legal definition in Austria as in Germany; According to Section 28 (2) BWG - unlike in Germany - customary market practice does not apply as a loan to the governing body. Section 28 (5) BWG provides for personal liability of the managers and the supervisory board of the credit-granting bank as joint and several debtors for the repayment of loans to governing bodies if the provisions of Section 28 (1), (3) and (4) BWG have not been complied with.
Switzerland
The Swiss Banking Act regulates loans to organs in Article 4:
Loans to members of the bank's organs and to significant shareholders as well as to persons and companies closely related to them may only be granted in accordance with the generally recognized principles of the banking industry.
Italy
Institutional loans in Italy are regulated in Article 136 Obbligazioni degli esponenti bancari (Obligations of the Bank) of the Testo unico bancario (Italian Banking Act). This affects loans to people who perform administrative, management and control functions. In these cases, the prerequisite for a loan to the governing body is the approval of the administrative body and the unanimous approval of the bank's supervisory body.
literature
- Nikolaus Demmelmair: The large loan, million dollar and body loan regulations, Deutscher Sparkassenverlag, 8th edition 2018, ISBN 978-3-09-304790-9 .
- Beck, Samm, Kokemoor: Law on the Credit System . KWG commentary with materials and additional regulations. CF Müller Verlag, Heidelberg, loose-leaf collection, 173rd update August 2014,
Individual evidence
- ^ Written report of the Economic Committee of March 13, 1961 on BT-Drucksache 2563
- ↑ BaFin of June 9, 2004, interpretation according to the 4th Financial Market Promotion Act
- ↑ BGH, judgment of July 11, 2006, Az .: VI ZR 339/04 no. 14th
- ↑ Government Commission on the German Corporate Governance Code
- ↑ Swiss Banking Act SR 952.0 (PDF; 212 kB)
- ↑ Consulenti Privacy, TITOLO VII - TESTO UNICO BANCARIO - SANZIONI
- ^ Law on the Banking System (KWG). H: J: R
