Idaho State Statutes - Idaho Attorney Directory

(1) For purposes of this
section:
(a) "Associate" means that term as defined in section 26-2702, Idaho
Code.
(b) "Relative" means parent, child, sibling, spouse, father-in-law,
mother-in-law, son-in-law, brother-in-law, daughter-in-law, sister-in-law,
grandparent, grandchild, nephew, niece, uncle, or aunt.
(2) If a licensee provides financing assistance to a business firm or
engages in another business transaction, and if that financing assistance or
transaction involves a potential conflict of interest, the terms and
conditions under which the licensee provides the financing assistance or
engages in the transaction shall not be less favorable to the licensee than
the terms and conditions that would be required by the licensee in the
ordinary course of business if the transaction did not involve a potential
conflict of interest. Each person who participates in the decision of the
licensee relating to a transaction described in this section and has knowledge
of a potential conflict of interest involving that transaction shall disclose
the potential conflict of interest in the financing documents of the
transaction or, for a business transaction not involving financing assistance,
in another appropriate document.
(3) For the purposes of subsection (2) of this section, transactions
engaged in by a licensee which involve a potential conflict of interest
include, but are not limited to, the following:
(a) Providing financing assistance to a principal shareholder of the
licensee, to a person controlled by a principal shareholder of the
licensee, or to a director, officer, partner, relative, controlling
person, or affiliate of a principal shareholder of the licensee.
(b) Providing financing assistance to a business firm to which a
principal shareholder of the licensee: a director, officer, partner,
relative, controlling person, or affiliate of a principal shareholder of a
licensee, or a person controlled by a principal shareholder of the
licensee provides or plans to provide contemporaneous financing
assistance.
(c) Providing financing assistance to a business firm which has or is
expected to have a substantial business relationship with another business
firm which has a director, officer, or controlling person who is also a
director, officer, or controlling person of the licensee or who is the
spouse of a director, officer, or controlling person of the licensee.
(d) Providing financing assistance to a business firm if that business
firm, or a director, officer, or controlling person of that business firm,
contemporaneously has lent or will lend money to an associate of the
licensee.
(e) Providing financing assistance for the purchase of property of an
associate or principal shareholder of the licensee.
(f) Selling or otherwise transferring any of its assets to an associate
or principal shareholder of the licensee.
(4) Nothing in this section or in any other section of this chapter
limits the authority of the director to determine that an act involves a
conflict of interest and therefore is an unsafe or unsound act.
(5) Except with the approval of the director, a licensee shall not
provide a lien on or security interest in any of its property for the purpose
of securing an obligation of, or an obligation incurred for the benefit of,
another person.

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