Sec. 36a-457a. Loan policy.
Sec. 36a-457a. Loan policy. (a) A Connecticut credit union shall adopt and implement a written loan policy that requires written applications for all extensions of credit,
and addresses the categories and types of secured and unsecured extensions of credit
offered by the credit union, the manner in which mortgage loans, member business loans
and insider loans will be made and approved, underwriting guidelines and collateral
requirements, and which addresses, in accordance with safety and soundness, acceptable
standards for title review, title insurance and appraiser qualifications, procedures for
the approval and selection of appraisers, appraisal and evaluation standards, and the
credit union's administration of the appraisal and evaluation process. The commissioner
may review a Connecticut credit union's loan policy and may order changes to be made
to ensure safe and sound lending practices.
(b) A Connecticut credit union shall use its best efforts to make such secured and
unsecured extensions of credit to its members, including lease financing for personal
property if the leases are the functional equivalent of secured loans for personal property,
with such maturities as may be determined by the governing board, repayable in consecutive weekly, biweekly, semimonthly, monthly, quarterly or semiannual installments,
but which may be repaid in whole or in part prior to maturity, and on such terms as the
bylaws and loan policy of such credit union may permit.
(c) Except as otherwise provided in this section, the total direct or indirect liabilities
of any one obligor, however incurred, to any Connecticut credit union, exclusive of such
credit union's investment in the investment securities of such obligor, shall not exceed
at the time incurred the greater of two hundred dollars or ten per cent of such credit
union's total assets. For purposes of determining the limitations of this subsection, in
computing the liabilities of an obligor, a liability is incurred at the time of the closing
of the transaction, unless such closing is preceded by a legally binding written commitment to enter into the transaction, in which case such liability is incurred at the time of
commitment and is net of any liabilities of the obligor to such Connecticut credit union
that will be paid with the proceeds of the commitment at the time of closing. The limitations provided for in this subsection may be exceeded for a period of time not to exceed
six hours if at the closing of any transaction at which such obligor incurs such liabilities
to a Connecticut credit union in excess of such limitations, such credit union immediately
assigns or participates out to one or more other persons an amount that constitutes not
less than the excess over the applicable limitation. For purposes of this subsection, in
computing the liabilities of a partnership the individual liabilities of the general partners
shall be included; and in computing the individual liabilities of a general partner, the
liabilities of the partnership shall be included.
(P.A. 02-73, S. 57; P.A. 03-84, S. 59.)
History: P.A. 03-84 changed "Commissioner of Banking" to "commissioner" in Subsec. (a), effective June 3, 2003.