Arizona Laws 6-561. Purpose and conditions of loans; prepayment penalties
A. A credit union may make loans, including lines of credit, to members for the purposes and on the conditions as the bylaws provide. The board of directors shall establish written policies with respect to the granting of loans including the terms, conditions and acceptable forms of security.
Terms Used In Arizona Laws 6-561
- Capital: means share accounts, reserves and undivided earnings. See Arizona Laws 6-501
- Credit union: means a cooperative nonprofit association that is incorporated under this chapter for the purposes of encouraging thrift among its members and creating a source of credit and other financial services at fair and reasonable cost. See Arizona Laws 6-501
- including: means not limited to and is not a term of exclusion. See Arizona Laws 1-215
- Person: includes a corporation, company, partnership, firm, association or society, as well as a natural person. See Arizona Laws 1-215
B. No person, except another credit union, may become indebted, directly or indirectly, to the credit union for more than ten per cent of the credit union’s capital or two hundred dollars, whichever is greater. This limit does not apply to loans which are fully secured by assignment of share or deposit accounts in the credit union.
C. An application for a loan shall state the security and other information required by the credit committee or credit manager. Each loan shall be evidenced by a written document.
D. A member may repay a loan or outstanding balance on a line of credit prior to maturity in whole or in part on any business day without penalty. Except as provided in this subsection, prepayment penalties may be charged on member business loans as defined by the national credit union administration in 12 C.F.R. § 723.1.