(1) For the purposes of this section, ‘management team’ means the president or chief executive officer of a credit union or an individual who holds a position in a credit union of vice president or higher who has policymaking authority or authority to approve loans.

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(2) A credit union may make a loan to a director, a member of the credit union’s management team, the chief credit officer or a member of the credit union’s supervisory and credit committees if the credit union makes the loan under the following conditions:

(a) The loan complies with the provisions of this chapter that apply to loans to other borrowers and is not on terms more favorable than terms extended to other borrowers.

(b)(A) Except as provided in subparagraph (B) of this paragraph, if the combined aggregate amount of loans to an individual described in this subsection exceeds five percent of the credit union’s equity or $100,000, whichever is less, the board of directors must approve making the loans in excess of the specified aggregate amount.

(B) The aggregate amount of loans specified in subparagraph (A) of this paragraph does not include a loan that is:

(i) For an amount that is equal to or less than the conforming loan limit that the Federal Housing Finance Agency specifies, or $400,000, whichever is greater; and

(ii) Secured by a first lien on the borrower’s principal residence.

(c) The combined aggregate amount of loans to all individuals described in this subsection may not exceed 10 percent of the credit union’s assets.

(d) If a loan to a director, a member of the credit union’s management team, the chief credit officer or a member of the credit union’s supervisory or credit committee is not subject to approval by the board of directors under paragraph (b) of this subsection, after the loan is approved, the loan must be reported to the board of directors at the next meeting of the board of directors.

(3)(a) Except as provided in paragraph (b) of this subsection, a director, officer or committee member may not become a surety or guarantor for a loan or advance made by the credit union unless the board of directors approves.

(b) A director, officer or committee member may become a surety or guarantor for the spouse or children of the director, officer or committee member without the approval of the board of directors.

(4) The Director of the Department of Consumer and Business Services may waive the requirements of this section by rule or order at a credit union’s request. The Director of the Department of Consumer and Business Services may establish by rule a higher amount than the amount set in subsection (2)(b) of this section and may specify by rule the type of loans to directors, officers or committee members that the board of directors of the credit union must approve.

(5) A director, a member of the credit union’s management team, the chief credit officer or a member of the credit union’s supervisory or credit committee may not participate in approving or disbursing a loan in which the director, member of the credit union’s management team, chief credit officer or member of the credit union’s supervisory or credit committee has a direct or indirect financial interest. [1975 c.652 § 58; 1985 c.206 § 2; 1985 c.762 § 98; 1987 c.286 § 9; 1997 c.832 § 7; 1999 c.185 § 44; 2009 c.234 § 8; 2011 c.327 § 3]