Utah Code 7-9-58. Limitations on credit extended by nonexempt credit unions
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Terms Used In Utah Code 7-9-58
- Commissioner: means the Commissioner of Financial Institutions. See Utah Code 7-1-103
- Credit union: means a cooperative, nonprofit association incorporated under:(6)(a) Chapter 9, Utah Credit Union Act; or(6)(b) Utah Code 7-1-103
- Credit union service organization: means an entity:
(4)(a) that provides any of the services listed in Subsection 7-9-59(2); and(4)(b) in which a credit union organized under this chapter holds an ownership interest. See Utah Code 7-9-3- Equal: means , with respect to biological sex, of the same value. See Utah Code 68-3-12.5
- Member-business loan: means any loan, line of credit, or letter of credit, the proceeds of which will be used for:
(8)(a)(i) a commercial purpose;(8)(a)(ii) other business investment property or venture purpose; or(8)(a)(iii) an agricultural purpose. See Utah Code 7-9-3- Nonexempt credit union: means a credit union that is a nonexempt credit union under Section 7-9-55. See Utah Code 7-9-3
- service organization: means a corporation or other business entity owned or controlled by one or more financial institutions that is engaged or proposes to engage in business activities related to the business of financial institutions. See Utah Code 7-1-103
(1)(a) Notwithstanding the other provisions of this chapter, beginning on May 5, 2003, a nonexempt credit union may not:(1)(a)(i)(1)(a)(i)(A) extend a member-business loan;(1)(a)(i)(B) renew a member-business loan that is extended before May 5, 2003; or(1)(a)(i)(C) extend the maturity date or increase the amount of a member-business loan that is extended before May 5, 2003;(1)(a)(ii) originate, participate in, or obtain any interest in a co-lending arrangement, including a loan participation arrangement; or(1)(a)(iii) subject to Subsection (2), extend credit that is not a member-business loan if as a result of the extension of credit the total credit that is not a member-business loan that the nonexempt credit union has issued to that member exceeds at any one time $250,000 adjusted as provided in Subsection (1)(b).(1)(b) The adjustment described in Subsection (1)(a)(iii) shall be calculated by the commissioner as follows:(1)(b)(i) beginning July 1, 2008 and for a calendar year beginning on or after January 1, 2009, the commissioner shall increase or decrease the dollar amount in Subsection (1)(a)(iii) by a percentage equal to the percentage difference between the consumer price index for the preceding calendar year and the consumer price index for calendar year 2007;(1)(b)(ii) after the commissioner increases the dollar amount listed in Subsection (1)(a)(iii), the commissioner shall round the dollar amount to the nearest whole dollar;(1)(b)(iii) if the percentage difference under Subsection (1)(b)(i) is zero or a negative percentage, the consumer price index increase for the year is zero; and(1)(b)(iv) for purposes of this Subsection (1)(b), the commissioner shall calculate the consumer price index as provided in Sections 1(f)(4) and 1(f)(5), Internal Revenue Code.(2) Notwithstanding Subsection (1)(a)(iii), a nonexempt credit union may extend credit in an amount that exceeds the limits provided in Subsection (1)(a)(iii) to a member if:(2)(a) the excess portion of the credit described in Subsection (1)(a)(iii) is fully secured by the member’s share or deposit savings in the nonexempt credit union; or(2)(b) the credit is extended to a member of the nonexempt credit union:(2)(b)(i) for the purpose of:(2)(b)(i)(A) paying amounts owed by the member to purchase a one- to four-family dwelling that is the primary residence of that member; or(2)(b)(i)(B) refinancing the balance of amounts owed by the member for the purchase of a one- to four-family dwelling that is the primary residence of that member; and(2)(b)(ii) the credit extended under this Subsection (2)(b) is less than or equals $1,000,000.(3) In accordance with Subsection 7-9-20(7)(d), a credit union service organization may not extend credit to a member of a nonexempt credit union holding an ownership interest in the credit union service organization if it would be a violation of this section for the nonexempt credit union to extend the credit to the member.(4) This section may not prevent a nonexempt credit union from servicing a loan extended before May 5, 2003. - Credit union service organization: means an entity: