(a) No credit union shall permit a person to become indebted or liable to it, either directly or indirectly, on loans or extensions of credit in a total amount outstanding at any one time in excess of ten per cent of the credit union’s capital.
lawyer at desk

Ask a legal question, get an answer ASAP!
Click here to chat with a lawyer about your rights.

Terms Used In Hawaii Revised Statutes 412:10-407

  • Capital: means :

    (1) The aggregate par value or other amount received and allocated to the issued and outstanding capital stock of a financial institution; or

    (2) The total amount of a credit union's outstanding and unimpaired membership shares or share accounts. See Hawaii Revised Statutes 412:1-109

  • Contract: A legal written agreement that becomes binding when signed.
  • county: includes the city and county of Honolulu. See Hawaii Revised Statutes 1-22
  • Depository institution: means a financial institution that is authorized to accept deposits under its chartering or licensing authority and includes a bank, savings bank, savings and loan association, depository financial services loan company, credit union, or intra-Pacific bank. See Hawaii Revised Statutes 412:1-109
  • deposits: means money or its equivalent received or held by a person in the usual course of business and for which it has given or is obligated to give credit, either conditionally or unconditionally, to a demand, checking, savings, time, passbook, negotiable order of withdrawal, thrift, or share account, or which is evidenced by its passbook, certificate of deposit, thrift certificate, investment certificate, certificate of indebtedness, or other similar instrument, or a check, draft, or share draft drawn against a deposit account and certified by a person, on which the person is primarily liable. See Hawaii Revised Statutes 412:1-109
  • Federal: means belonging to, part of, or related to the government of the United States of America. See Hawaii Revised Statutes 412:1-109
  • Loans and extensions of credit: includes a contractual commitment to advance funds. See Hawaii Revised Statutes 412:1-109
  • Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
  • Person: means a natural person, entity or organization, including without limitation an individual, corporation, joint venture, partnership, sole proprietorship, association, cooperative, estate, trust, or governmental unit. See Hawaii Revised Statutes 412:1-109
  • this State: means the State of Hawaii, its political subdivisions, agencies, and departments. See Hawaii Revised Statutes 412:1-109
(b) The aggregate obligations of a borrower to a credit union shall include any obligations owed to the same credit union by a partnership or association of which the borrower is a partner or member if such partnership or membership imposes liability on the borrower for said obligations by agreement or operation of law.
(c) The limitations set forth in this section shall not apply to:

(1) A credit union’s deposits with another depository institution made in compliance with this chapter;
(2) A credit union’s sale of federal funds to another depository institution with a maturity of one business day or under a continuing contract;
(3) Loans and extensions of credit secured by the interest-bearing obligations of the United States or those for which the faith and credit of the United States are distinctly pledged to provide for the payment of the principal and interest thereof or of the State or any county or municipal or political subdivision of this State, issued in compliance with the laws of this State, where the market value of the security shall be at any time not less than one hundred five per cent of the face amount of the loans and extensions of credit; and
(4) Loans and extensions of credit to the extent secured by a pledge or security interest in a share or deposit account in the lending credit union.
  Previous
Next  
 Part IV Contents