Insider Lending Law and Legal Definition

Insider lending means advancing of loans by a bank to its own officers and directors. Banking laws require that banks must make loans to insiders at the same rate and credit terms as loans to other borrowers. The 1991 federal law recapitalizing the Federal Deposit Insurance Corporation (FDIC) imposes new limits on loans to insiders. In the U.S. loans to insiders must be made at the same interest rate, repayment terms and credit evaluation criteria applicable to outsiders.