(a)

1. (1) Every loan application shall reflect:

   1. (A) All current obligations owed by the applicant, both secured and unsecured; and
   2. (B) Loans for which the applicant is comaker or guarantor.
2. (2) Each loan application shall also reflect any extensions of credit to the applicant notwithstanding whether the extension has been drawn down by the member.

(b) Within the limits of the act and such further limits as may be imposed by the board of directors pursuant to the act and the bylaws, the credit committee or loan officer, in arriving at the terms of payment or amortization of an approved loan to a member, shall consider:

1. (1) The source of funds and the regularity and frequency of receipt of funds which the borrower proposes to utilize for the purpose;
2. (2) The borrower's other commitments and anticipated needs over the loan period; and
3. (3) The best interests of the credit union.

(c)

1. (1) All loans shall provide for the payment of interest with each payment of principal.
2. (2) No loan shall provide for payment less frequently than at intervals of twelve (12) months.

(d)

1. (1) No secured loan shall be made to any member if, upon making the loan, the member's aggregate indebtedness to the credit union will exceed ten percent (10%) of the credit union's assets.
2. (2) No unsecured loan shall be made to any member if, upon making that loan, the member's aggregate indebtedness to the credit union, in the case of a credit union whose unimpaired capital and surplus is less than five thousand dollars ($5,000), would exceed one hundred fifty dollars ($150) or which, in the case of any other credit union, would exceed three thousand dollars ($3,000) or three percent (3%) of the credit union's unimpaired capital and surplus, whichever is less.

3. (3) For purposes of this section, a member's aggregate indebtedness to the credit union shall include:

   1. (A) The unpaid principal balance of all loans made to the member;
   2. (B) The unpaid principal balance of all loans with the credit union for which the member is comaker; and
   3. (C) Any credit amount extended to the member pursuant to an open end credit agreement, revolving credit plan, or the extension of a line of credit notwithstanding whether the member has actually received funds pursuant to any of the enumerated credit agreements.

(e)

1. (1) A secured loan is one secured by collateral or the signature or signatures of comaker or comakers or guarantor or guarantors in the form of an endorsement of person or persons on behalf of the borrower which will serve as a source of recovery in the event of default by the borrower.
2. (2) The files of each credit union shall contain evidence of the value of the security pledged, if collateral, or evidence of the financial responsibility of the guarantor or comaker for each secured loan.

3. (3)

   1. (A) The files of the credit union shall also contain copies of financing statements and security agreements properly filed with the requisite governmental office to protect the credit union's security interest in the collateral or evidence of nonfiling chattel lien insurance.
   2. (B) Loans not reflecting such filings shall be deemed unsecured.

(f)

1. (1) Real estate loans made under authority of paragraph four of Section 16 of the credit union act shall not exceed sixty-six and two-thirds percent (66 2/3%) of the appraised value of the real estate as determined by an independent qualified real estate appraiser whose opinion is directed to the credit union, and the terms of such loans shall not exceed ten (10) years if the assets of the credit union are seven hundred fifty thousand dollars ($750,000) or less, nor twenty (20) years if the assets of the credit union are seven hundred fifty thousand one dollars ($750,001) or more.
2. (2) Real estate mortgage loans shall be secured by a first lien only.
3. (3) A title opinion or title insurance reflecting good and merchantable title in the mortgagor and indicating that a mortgage recorded in the name of the credit union would be a first mortgage plus proof of casualty insurance covering improvements with the credit union named as loss payee, must be procured prior to a disbursement of funds.
4. (4) The credit union must also maintain a filed copy of the mortgage instrument.

(g)

1. (1) An escrow account, clearly designated as such, must be maintained as a segregated bank account for the payment of real estate taxes and casualty insurance premiums, unless satisfactory proof of such payments is furnished to the board of directors.
2. (2) Complete detailed ledger accounts must be maintained for each escrow account.

(k)

1. (1) The board of directors of a credit union may authorize an interest refund to all members who:

   1. (A) Paid interest to the credit union during the dividend period; and
   2. (B) Are members of record at the close of business on the last day of the dividend period.

2. (2)

   1. (A) Interest rebates or refunds are to be paid from the earnings of a credit union in excess of the expenses incurred.
   2. (B) Such rebates shall be shown as a reduction of interest income.
3. (3) The amount of the interest refunded shall not exceed the amount of net income as of the date of the refund.

4. (4)

   1. (A) An interest refund may be authorized for all members who:

(i) Paid interest to the credit union during the period; and

1. (ii) Are members of record at the close of business of the period.

   1. (B) The amount of the refund to each member shall be in proportion to the amount of interest paid by the member as determined by the application of a uniform percentage.

      1. (l) The assignment of unearned wages, i.e., wages to be earned in the future, may be used as security only in an amount equal to an employee's last paycheck and then only if:
2. (1) The individual assignment is acknowledged in writing by the employer; and

3. (2) The assignment is executed by both the borrower and the borrower's spouse.

   1. (m) Extensions of credit or credit extended pursuant to open end credit, a revolving credit plan, or a line of credit must be:
4. (1) Segregated;
5. (2) Clearly marked as such; and
6. (3) Readily distinguishable from other loans.