15050-15051
FINANCIAL CODE
SECTION 15050-15051
15050. (a) For purposes of this section, "official" means a director, officer, or member of the supervisory committee or the credit committee of a credit union. (b) No credit union shall enter into any obligation with any official, directly or indirectly, unless the obligation complies with all lawful requirements of this division with respect to obligations permitted for other members of the credit union and is not on terms more favorable than those extended to other members of the credit union, and the obligation is entered into in accordance with a written policy adopted by the directors establishing that all officials shall have an equal opportunity to enter into obligations with the credit union. (c) No credit union shall enter into any obligation with any official, directly or indirectly, not fully secured by shares or certificates for funds unless all of the following requirements are satisfied: (1) Upon the making of the obligation, the aggregate amount of obligations outstanding, except obligations fully secured by shares, to all officials and alternate members of the credit committee will not exceed 10 percent of the aggregate dollar amount of all savings capital of the credit union, except that in credit unions whose aggregate savings capital is five million dollars ($5,000,000) or more but less than ten million dollars ($10,000,000), the aggregate amount of obligations outstanding, except obligations fully secured by shares, to all officials and alternate members of the credit committee shall not exceed 15 percent of the aggregate dollar amount of all savings capital of the credit union, and in credit unions whose aggregate savings capital is less than five million dollars ($5,000,000), the aggregate amount of obligations outstanding, except obligations fully secured by shares, to all officials and alternate members of the credit committee shall not exceed 20 percent of the aggregate dollar amount of all savings capital of the credit union. (2) The obligation, except any portion of an obligation fully secured by shares, does not exceed 1 percent of the aggregate dollar amount of all savings capital of the credit union, or the maximum obligation to the credit union prescribed by subdivisions (b) and (c) of Section 15100, whichever is less, except that in credit unions whose aggregate savings capital is five million dollars ($5,000,000) or more but less than ten million dollars ($10,000,000), the obligation, except any portion of an obligation fully secured by shares, shall not exceed 3 percent of the aggregate dollar amount of all savings capital of the credit union, or the maximum obligation to the credit union prescribed by subdivisions (b) and (c) of Section 15100, whichever is less, and in credit unions whose aggregate savings capital is less than five million dollars ($5,000,000), the obligation, except any portion of an obligation fully secured by shares, shall not exceed 5 percent of the aggregate dollar amount of all savings capital of the credit union, or the maximum obligation to the credit union prescribed by subdivisions (b) and (c) of Section 15100, whichever is less. (3) (A) The obligation is approved by the credit committee, or in the alternative the credit manager, and by the board of directors, except that the credit manager shall not take part in any credit decision directly or indirectly for his or her benefit. The board of directors may select a loan officer to prepare a report and recommendation as to any extension of credit or other obligation requested by the credit manager. (B) Subparagraph (A) does not apply to the creation of an obligation on which an official is a direct obligor or an endorser, cosigner, or guarantor, if the aggregate of all of the following does not exceed fifty thousand dollars ($50,000) plus the amount of shares, if any, that are pledged or will be pledged as collateral by the official: (i) The amount of the proposed obligation. (ii) The outstanding balances of obligations, including the used portion of any approved line of credit, extended to, or endorsed, cosigned, or guaranteed by, the official. (iii) The total unused portion of approved lines of credit extended to, or endorsed, cosigned, or guaranteed by, the official. (4) The credit union member entering into the obligation takes no part in the consideration of his or her application and does not attend any committee or board meeting while his or her application is under consideration. (5) The names of members of the credit committee, or in the alternative, the credit manager, and board of directors who voted to authorize or ratify the obligation shall be entered in their respective minutes. (d) No credit union shall permit an official or the credit manager to become surety for any obligation created by the credit union for anyone other than a member of their immediate family. (e) No credit union shall enter into any obligation with any credit manager or any officer employed by the credit union, directly or indirectly, unless the obligation is in compliance with all requirements of this division with respect to obligations permitted for other members, and not on terms more favorable than those extended to other employees, and approved by the board of directors. 15051. The board of directors shall declare the office of any director, officer, committee member, or the credit manager vacant if the person fails to reduce any obligation to the credit union for which he or she is liable in a timely manner according to the terms of the obligation.