2005 Vermont Code - § 2078. — Loans to members

§ 2078. Loans to members

(a) A credit union may lend to members for such purpose and upon such security and terms as the bylaws may provide, and the credit committee shall approve, at rates of interest not to exceed one percent per month on the unpaid monthly balances, the rate to include the credit union's total income on a loan unless a greater rate is otherwise approved by the commissioner. Every application for a loan shall be made in writing upon a form, which the credit committee prescribes and the board of directors approves, which shall state the purpose for which the loan is desired and the security, if any, offered. Every loan shall be evidenced by a written instrument.

(b) No loan may be made to any member in an aggregate amount in excess of $200.00 or ten percent of the credit union's total assets, whichever is greater. No loan may be made unless it has been approved by a loan officer or has received majority approval of the members of the committee present when the loan was considered, the members being at least a majority of the committee.

(c) In addition to generally accepted types of security, the endorsement of a note by a guarantor or assignment of shares or wages, in a manner consistent with the laws of Vermont, shall be deemed security within the meaning of this chapter and the adequacy of all security shall be within the determination of the credit committee or loan officer subject to the provisions of this chapter and the bylaws. A member may receive a loan in installments, or in one sum, and may pay the whole or any part of his loan on any day on which the office of the credit union is open for business.

(d) Upon written application by any member, the credit committee or a duly appointed loan officer may approve a line of credit, and loan advances may be granted to the member within the limit of such line of credit. The credit union shall document a loan policy which specifies a procedure to monitor the continued credit-worthiness of the borrower. The credit committee or loan officer shall review specific loan advances in accordance with this written policy.

(e) No director or member of the credit or supervisory committee may endorse for borrowers from the credit union, except in cases of immediate members of the family. (Added 1967, No. 312 (Adj. Sess.), § 1, eff. March 22, 1968; amended 1969, No. 18, § 7, eff. March 11, 1969; 1971, No. 38, § 2; 1975, No. 70, § 7; 1979, No. 27, § 1; 1983, No. 28.)