Arizona Laws 6-564. Loans to officials
A. A credit union may make loans to an officer, director or member of its supervisory and credit committees if both of the following conditions are met:
Terms Used In Arizona Laws 6-564
- 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
- Deputy director: means the deputy director of the financial institutions division of the department. See Arizona Laws 6-101
- Guarantor: A party who agrees to be responsible for the payment of another party's debts should that party default. Source: OCC
1. The loan complies with all requirements of this chapter and is not on terms more favorable than those extended to other borrowers.
2. The aggregate of loans to all such officials, excepting those fully secured by share or deposit accounts, does not exceed twenty percent of the credit union’s capital.
B. A credit union may allow officers, directors and members of its supervisory and credit committees to act as comakers, guarantors or endorsers of loans to other members, subject to the requirements of subsection A of this section.
C. All applications for loans in the aggregate of $20,000 or a greater amount as determined by the deputy director on which an official will be either a direct obligor or an endorser, cosigner or guarantor shall be initially acted on by the board of directors as provided in the bylaws.