6-564. Loans to officials
237 words·~1 min read·
/az/title-6/6-564A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
A. A credit union may make loans to an officer, director or member of its supervisory and credit committees if both of the following conditions are met:
1. The loan complies with all requirements of this chapter and is not on terms more favorable than those extended to other borrowers.
2. The aggregate of loans to all such officials, except those fully secured by share or deposit accounts, is not more than twenty percent of the credit union's capital.
B. A credit union may allow officers, directors and members of its supervisory and credit committees to act as comakers, guarantors or endorsers of loans to other members, subject to the requirements of subsection A of this section.
C. Any loan that would result in an official becoming obligated as a direct obligor, endorser, cosigner or guarantor in an aggregate amount of more than one percent of the credit union's net worth must be approved by the board of directors. At the same time a credit union submits each report of condition, the credit union shall provide to the deputy director a list of the credit obligations of each official if the aggregate obligations of an official to the credit union are more than the lesser of $50,000 or one percent of the credit union's net worth. For the purposes of this subsection, "net worth" has the same meaning prescribed in 12 Code of Federal Regulations part 702.