- (a) The rates, terms, conditions, and availability of any loan or extension of credit made to, or endorsed or guaranteed by, a director, employee, loan officer, credit manager, members of the credit committee or an immediate family member of any such individual shall not be more favorable than the rates, terms, conditions, and availability of comparable loans or credit to other credit union members.
- (b) Before making a loan, extending credit, or becoming contractually liable to make a loan or extend credit to a director, employee, loan officer, credit manager, members of the credit committee or members of their immediate families, the board of directors must approve the transaction if the loan or the extension of credit or aggregate of outstanding loans or extensions of credit to any one person, the person's business interests, and members of the person's immediate family is greater than $25,000 if unsecured credit or $75,000 if secured credit, plus pledged shares and deposits. A loan secured by a lien on improved residential real estate which is the homestead and is actually occupied by the borrower shall not be subject to, or included in the aggregate amounts included in this section.
- (c) For purposes of this section, the term immediate family member includes a spouse or other family member living in the same household.
- (d) The aggregate of all outstanding loans or extensions of credit made to, or endorsed or guaranteed by all directors, committee members, senior executive staff, and immediate family members of all such individuals shall not exceed 20% of the credit union's total assets. The requirements described in this subsection shall apply unless waived in writing by the commissioner for good cause shown.
- (e) The president shall make a report to the board of directors on all loans approved since the previous board meeting for any director, committee member, senior executive staff or immediate family members of such individual. The report shall consist of at least the official's loan number, the amount of the loan, the type of collateral securing the loan, if applicable, the aggregate amount of indebtedness to the credit union, and a statement regarding compliance with loan policies. The board of directors must review this loan approval report at each regular monthly board meeting.
Source Note:The provisions of this §91.705 adopted to be effective July 8, 1994, 19 TexReg 4937; amended to be effective February 17, 1998, 23 TexReg 1302.