§18-906. Members - Acceptance of loans.
642 words·~3 min read·
/ok/title-18-corporations/18-906·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(1)All financial institutions as defined herein are hereby authorized to become members of the corporation and to make loans to the corporation as provided herein.
(2)Any financial institution may request membership in the coporation by making application to the board of directors on such form and in such manner as said board of directors may require, and membership shall become effective upon acceptance of such application by the board.
(3)Each member of the corporation shall make loans to the corporation as and when called upon by it to do so on such terms and other conditions as shall be approved from time to time by the board of directors, subject to the following conditions:
(a)All loan limits shall be established at the thousand-
dollar amount nearest to the amount computed in accordance
with the provisions of this section.
(b)No loan to the corporation shall be made if immediately
thereafter the total amount of the obligations of the
corporation would exceed ten times the amount then paid in
an outstanding capital stock, reserves or earned surplus of
the corporation.
(c)The total amount outstanding at any one time on loans
to a development corporation made by any member shall not
exceed:
(i)twenty percent (20%) of the total amount then
outstanding on loans to such development corporation by all
members thereof,
(ii)the following limit, to be determined
as of the time such member becomes a member, on the basis
of figures contained in the most recent year-end statement
prior to its application for membership; three percent (3%)
of the capital and permanent surplus of banks, trust
companies; three percent (3%) of the total reserve and
surplus accounts of a savings and loan association; one
percent (1%) of the capital and unassigned surplus of stock
insurance companies, except fire insurance companies; one
percent (1%) of the unassigned surplus of mutual insurance
companies, except fire insurance companies; one-tenth of
one percent (1/10 of 1%) of the assets of fire insurance
companies; comparable limits for other financial
institutions as established by the board of directors of
the development corporation. All loan limits shall be
recomputed as of the first day of January of each even-
numbered year, but no member's loan limit shall be
increased as the result of such recomputation without the
consent of such member.
(d)Each call made by the corporation shall be prorated
among the members of the corporation in substantially the
same proportion that the adjusted loan limit of each member
bears to the aggregate of the adjusted loan limits of all
members. The adjusted loan limit of a member shall be the
amount of such member's loan limit, reduced by the balance
of outstanding loans made by such member to the corporation
and the investment in capital stock of the corporation held
by such member at the time of such call.
(e)All loans to the corporation by members shall be
evidenced by bonds, debentures, notes, or other evidence of
indebtedness of the corporation, which shall be freely
negotiable at all times, and which shall bear interest at a
rate of not less than one-half of one percent (1/2 of 1%)
in excess of the rate of interest determined by the board
of directors at the date of issuance to be the prime rate
prevailing on unsecured commercial loans.
(f)Membership in the corporation shall be for the duration
of the corporation provided that:
(i)upon written notice
given to the corporation one
(1)year in advance, a member
may withdraw from membership in the corporation at the
expiration date of such notice,
(ii)a member shall not be
obligated to make any loans to the corporation pursuant to
calls made subsequent to the receipt of notice of the
withdrawal of said member. Laws 1970, c. 187, § 6, emerg. eff. April 13, 1970.