Texas Business Organizations Code 23.068 – Loan Limits
(a) A loan limit shall be established at the $1,000 amount nearest to the amount computed in accordance with this section.
(b) The total amount outstanding on loans made to a corporation by a member at any one time, when added to the amount of the investment in the shares of the corporation then held by the member, may not exceed:
(1) 20 percent of the total amount then outstanding on loans to the corporation by all members, including outstanding amounts validly called for a loan but not yet loaned; or
(2) the following limit, to be determined as of the time the member becomes a member of the corporation, or at any time requested by a member on the basis of the audited balance sheet of the member at the close of its fiscal year immediately preceding its application for membership or, in the case of an insurance company, its last annual statement to the Texas Department of Insurance:
(A) an amount equal to the lesser of $750,000 or two percent of the capital and surplus of a commercial bank or trust company;
(B) an amount equal to one percent of the total outstanding loans made by a savings and loan association;
(C) an amount equal to one percent of the capital and unassigned surplus of a stock insurance company other than a fire insurance company;
(D) an amount equal to one percent of the unassigned surplus of a mutual insurance company other than a fire insurance company;
(E) an amount equal to one-tenth of one percent of the assets of a fire insurance company; or
(F) the limits approved by the board of directors of the corporation for a government pension fund or other financial institution.
Terms Used In Texas Business Organizations Code 23.068
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Association: means an entity governed as an association under Title 6 or 7. See Texas Business Organizations Code 1.002
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Corporation: means an entity governed as a corporation under Title 2 or 7. See Texas Business Organizations Code 1.002
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Member: means :
(A) in the case of a limited liability company, a person who has become, and has not ceased to be, a member in the limited liability company as provided by its governing documents or this code;
(B) in the case of a nonprofit corporation, a person who has membership rights in the nonprofit corporation under its governing documents;
(C) in the case of a cooperative association, a member of a nonshare or share association;
(D) in the case of a nonprofit association, a person who has membership rights in the nonprofit association under its governing documents; or
(E) in the case of a professional association, a person who has membership rights in the professional association under its governing documents. See Texas Business Organizations Code 1.002
(c) Subject to Subsection (b), each call made by the corporation shall be prorated among the members of the corporation in substantially the same proportion that the adjusted loan limit of each member bears to the aggregate of the adjusted loan limits of all members.
(d) For purposes of Subsection (c), the adjusted loan limit of a member is the amount of the member’s loan limit, reduced by the balance of outstanding loans made by the member to the corporation and the investment in shares of the corporation held by the member at the time of the call.