§ 1757a. Limitation on member business loans
(a)
In general
On and after August 7, 1998, no insured credit union may make any member business loan that would result in a total amount of such loans outstanding at that credit union at any one time equal to more than the lesser of—
(b)
Exceptions
Subsection (a) of this section does not apply in the case of—
(1)
an insured credit union chartered for the purpose of making, or that has a history of primarily making, member business loans to its members, as determined by the Board; or
(c)
Definitions
As used in this section—
(1)
the term “member business loan”—
(A)
means any loan, line of credit, or letter of credit, the proceeds of which will be used for a commercial, corporate or other business investment property or venture, or agricultural purpose; and
(B)
does not include an extension of credit—
(i)
that is fully secured by a lien on a 1- to 4-family dwelling that is the primary residence of a member;
(ii)
that is fully secured by shares in the credit union making the extension of credit or deposits in other financial institutions;
(iii)
that is described in subparagraph (A), if it was made to a borrower or an associated member that has a total of all such extensions of credit in an amount equal to less than $50,000;
(2)
the term “net worth”—
(A)
with respect to any insured credit union, means the credit union’s retained earnings balance, as determined under generally accepted accounting principles; and
(d)
Effect on existing loans
An insured credit union that has, on August 7, 1998, a total amount of outstanding member business loans that exceeds the amount permitted under subsection (a) of this section shall, not later than 3 years after August 7, 1998, reduce the total amount of outstanding member business loans to an amount that is not greater than the amount permitted under subsection (a) of this section.
(e)
Consultation and cooperation with State credit union supervisors
In implementing this section, the Board shall consult and seek to work cooperatively with State officials having jurisdiction over State-chartered insured credit unions.