Any lending institution may become a member of a credit corporation by entering into a lending agreement with the credit corporation on such form and in such manner as the board of directors of the credit corporation may require. Membership in a credit corporation becomes effective upon execution of such an agreement. Each member shall lend funds to the credit corporation according to the terms of the lending agreement. The board of directors of the credit corporation shall determine and approve the terms for lending agreements, subject to the following conditions:

1. (1) The total amount outstanding on loans to the credit corporation made by any member under its lending agreement or otherwise at any time, when added to the amount of the investment in the capital stock of the credit corporation then held by that member, may not exceed the lesser of:

   1. (A) any limit established by applicable state or federal law; or
   2. (B) the loan limit for that member.
2. (2) All loans made to the credit corporation by members must be evidenced by bonds, debentures, notes, or other evidences of indebtedness of the credit corporation.
3. (3) The board of directors of the credit corporation shall determine the interest rate for the debt instruments referred to in subdivision (2).

As added by P.L.236-1985, SEC.1.