§412:10-403  Interest rates.  (a)  The interest rates on loans shall be determined by the board of directors, subject to the following:

     (1)  The interest rate on any credit union loan hereafter made shall not exceed eighteen per cent per year on the unpaid balance, may be fixed or variable, and may provide for a balloon payment.  A variable rate may be based upon an index, the prime rate, or some other objective factor, so that the interest rate will increase or decrease according to such factor.

     (2)  The commissioner, without regard to chapter 91, may establish an interest rate ceiling exceeding the eighteen per cent per year for periods not to exceed eighteen months, if the commissioner determines that prevailing interest rate levels threaten the safety and soundness of credit unions.

     (b)  The board may also authorize any refund of interest on such classes of loans and under such conditions as it prescribes.

     (c)  If a greater rate of interest than that permitted under this article is contracted for in any loan under this article, the loan shall not, by reason thereof, be void.  But, if in any action on the loan, proof is made that a greater rate of interest than that permitted by law has been directly or indirectly contracted for, the credit union shall only recover the amount actually received by the borrower in cash, credit or the equivalent thereof plus the charges, if any, which were properly charged to the borrower and which have not been deducted from the principal amount of the contract or otherwise paid by the borrower.  The borrower shall only recover costs.  If interest has been paid, judgment shall be for the recoverable amount less the amount of interest paid.  Sections 478-5 and 478-6 shall not apply to loans made under this article by credit unions. [L 1993, c 350, pt of §1]