§ 7-1-658 - Loans - Georgia Statutes

O.C.G.A. 7-1-658 (2010)
7-1-658. Loans

(a) Credit unions may lend money to their members at reasonable rates of interest, which shall not exceed 1 1/4 percent each month on the unpaid balance, or such greater rates as shall be authorized for other financial institutions for such purposes as may be approved by the credit committee.

(b) Loans shall be supervised as follows:

(1) The credit committee shall have the general supervision of all loans to members. The credit committee shall hold such meetings as the business of the credit union may require and not less frequently than once each quarter to consider applications for loans. Reasonable notice of such meetings shall be given to all members of the committee. Actions of the credit committee shall be reported to the board in such form as the board shall prescribe at each regular meeting of the board. No loan shall be made unless it is approved by a majority of the entire committee, except as provided in this Code section;

(2) The credit committee may appoint one or more employees to be loan officers and delegate to such persons the power to approve or disapprove loans subject to such limitations or conditions as the credit committee prescribes. Records of loans approved shall be maintained in such form as the credit committee shall prescribe and shall be made available to the credit committee upon request. All loans in excess of 50 percent of a credit union's maximum loan limitation or such lower limit as the credit committee shall establish shall be acted upon by the credit committee. The credit committee may not appoint more than one of its members to be a loan officer. No person shall have the authority to disburse funds of the credit union for any loan which has been approved by such person;

(3) In lieu of a credit committee, the board of directors may appoint one or more loan officers and delegate to such persons the power to approve or disapprove loans subject to such limitations or conditions as the board prescribes. All other duties of the credit committee as described in this article shall become the duties of the board of directors. Records of loans approved shall be maintained by the loan officers in such form as the board shall prescribe and a listing of all loans made, including the name of the borrower and the amount of the loan, shall be submitted to the board at each meeting; and

(4) Members may appeal a credit decision made by a loan officer to the credit committee or to the board if denied by the credit committee. Where there is no credit committee, appeal shall be made to the board.

(c) Loans may be made to officers, directors, and committee members of the credit union under the same general terms and conditions as to other members of the credit union; provided, however, that no officer, director, committee member, or employee shall participate in approving any loan in which he or she has a direct or indirect financial interest. The approval of all loans to officers, directors, committee members, and employees of the credit union shall be reported to the board of directors at its next meeting.

(d) No credit union shall be authorized to lend to any individual borrower on an unsecured loan more than 1 percent of the first $100,000.00 of its deposits and shares plus one-fourth of 1 percent of its deposits and shares over $100,000.00. No credit union shall be authorized to lend to any individual borrower on a secured loan more than 10 percent of the first $100,000.00 of its deposits and shares plus 4 percent of the next $1 million of its deposits and shares plus 2 percent of its deposits and shares over $1.1 million. Deposits and shares reflected in the statement of condition on the last calendar day of the preceding quarter, to the nearest $100,000.00, shall be used to establish loan limits for the subsequent calendar quarter, provided that where a credit union has less than $1 million in total shares and deposits, the nearest $1,000.00 shall be used to establish these limits. Any credit union may make loans up to $200.00 regardless of the amount of its shares and deposits. The amount loaned to any one borrower on an unsecured basis when added to the amount loaned to any one borrower on a secured basis shall not exceed the limitation set forth in this subsection for secured loans, such limitation being the maximum loan limit of the credit union.

(e) For purposes of subsection (d) of this Code section:

(1) "Borrower" means the member who actually received the proceeds from a loan and shall not include any obligation which he may incur by being an endorser, guarantor, comaker, or similar obligor for another borrower;

(2) "Secured loan" means a loan for which adequate collateral is given. A secured loan may include a loan for which there is an endorser, guarantor, comaker, or similar obligor.

(f) Approval of loans by the credit committee shall be evidenced, prior to disbursement of the loan proceeds, by a writing signed by a committee member stating that the committee has approved the loan. If the board appoints loan officers in lieu of a credit committee, it shall establish policies for approval of loans by those loan officers.