412:10-407 Limitations on obligations of one borrower. (a) No credit union shall permit a person to become indebted or liable to it, either directly or indirectly, on loans or extensions of credit in a total amount outstanding at any one time in excess of ten per cent of the credit union's capital.

(b) The aggregate obligations of a borrower to a credit union shall include any obligations owed to the same credit union by a partnership or association of which the borrower is a partner or member if such partnership or membership imposes liability on the borrower for said obligations by agreement or operation of law.

(c) The limitations set forth in this section shall not apply to:

(1) A credit union's deposits with another depository institution made in compliance with this chapter;

(2) A credit union's sale of federal funds to another depository institution with a maturity of one business day or under a continuing contract;

(3) Loans and extensions of credit secured by the interest-bearing obligations of the United States or those for which the faith and credit of the United States are distinctly pledged to provide for the payment of the principal and interest thereof or of the State or any county or municipal or political subdivision of this State, issued in compliance with the laws of this State, where the market value of the security shall be at any time not less than one hundred five per cent of the face amount of the loans and extensions of credit; and

(4) Loans and extensions of credit to the extent secured by a pledge or security interest in a share or deposit account in the lending credit union. [L 1993, c 350, pt of 1]


Previous Vol08_Ch0401-0429 Next