(a) Each member of the corporation shall make loans to the corporation when called upon by it to do so on the terms and other conditions approved from time to time by the board of directors, subject to the following conditions:

1. (1) all loans limits shall be established at the thousand dollar amount nearest to the amount computed under this subsection;
2. (2) a loan to the corporation may not be made if immediately thereafter the total amount of the obligations of the corporation would exceed 10 times the amount then paid in on the outstanding capital stock of the corporation;

3. (3) the total amount outstanding on the loans to the corporation made by any member at any one time, when added to the amount of the investment in the capital stock of the corporation then held by the member, may not exceed

   1. (A) 20 percent of the total amount then outstanding on loans to the corporation by all members, including in the total amount outstanding amounts validly called for loan but not yet loaned;
   2. (B) the following limit, to be determined as of the time the member becomes a member on the basis of the audited balance sheet of the member at the close of its fiscal year immediately preceding its application for membership, or in the case of an insurance company, its last annual statement to the state insurance commissioner: two and one-half percent of the capital and surplus of a commercial bank or trust company; one-half of one percent of the total outstanding loans made by a savings and loan association or building and loan association; two and one-half percent of the capital and unassigned surplus of a stock insurance company, except a fire insurance company; two and one-half percent of the unassigned surplus of a mutual insurance company, except a fire insurance company; two and one-half percent of the unassigned surplus of a mutual insurance company, except a fire insurance company; one-tenth of one percent of the assets of a fire insurance company; and such limits as may be approved by the board of directors of the corporation for other financial institutions;
4. (4) subject to (3)(A) of this subsection, 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 the member's loan limit, reduced by the balance of outstanding loans made by the member to the corporation and the investment in capital stock of the corporation held by the member at the time of the call;
5. (5) all loans to the corporation by members shall be evidenced by bonds, debentures, notes, or other evidences of indebtedness of the corporation, which shall be freely transferable at all times, and which shall bear interest at a rate of not less than one-quarter of one percent in excess of the rate of interest determined by the board of directors to be the prime rate prevailing at the date of issuance thereof on unsecured commercial loans; the prime rate of interest is defined in this chapter as the rate of interest normally paid by banks or lending institutions.