1. (1) A credit union must require collateral commensurate with the level of risk associated with the size and type of any commercial loan. Collateral must be sufficient to ensure adequate loan balance protection along with appropriate risk sharing with the borrower and principal(s). A credit union making an unsecured loan must document in the loan file the mitigating factors that sufficiently offset the relevant risk.
2. (2) A credit union that does not require the full and unconditional personal guarantee from the principal or principals of the borrower, who have a controlling interest in the borrower, must document in the loan file the mitigating factors that sufficiently offset the relevant risk.
3. (3) Collateral is not required when the loan is guaranteed or insured by a private insurer that the credit union has determined has the financial capacity and willingness to perform under the terms of the guaranty or insurance agreement.

Statutory/Other Authority

ORS 723.102

Statutes/Other Implemented

ORS 723.152, 723.156 & 723.512

History

FSR 1-2022, amend filed 05/18/2022, effective 06/01/2022
FCS 2-2002, f. & cert. ef. 8-27-02