371.120. Members of corporation to be financial institutions--loans by members, limits.

MISSOURI STATUTES AND CODES

371.120. Members of corporation to be financial institutions--loans by members, limits.

Members of corporation to be financial institutions--loans bymembers, limits.

371.120. 1. The members of the corporation shall consistof such financial institutions as make application for membershipin the corporation and membership becomes effective upon theacceptance of the application by the board of directors.

2. Financial institutions shall include but are not limitedto national and state banks, trust companies, federal and statesavings and loan associations or corporations, public or privatepension or retirement funds, stock or mutual insurance and suretycompanies or related corporations, partnerships, foundations orany other entity engaged in lending or investing funds.

3. Each member shall lend funds to the corporation pursuantto the commitment of the member as and when called upon by thecorporation to do so, but the total amount on loan by any membersat any one time shall not exceed the following limit to bedetermined as of the time it became a member and shall beannually readjusted in the event of any change in the base of theloan limit of such member:

(1) National and state banks and trust companies, twopercent of capital and surplus;

(2) Federal and state savings and loan associations orcorporations, not in excess of limits fixed and prescribed byregulations established by the division of finance;

(3) Stock insurance companies, two percent of capital andsurplus;

(4) Surety and casualty companies, two percent of capitaland surplus;

(5) Mutual insurance companies, two percent of guarantyfund or of surplus whichever is applicable;

(6) For all other financial institutions such limits as maybe approved by the board of directors of the corporation.

4. All loan limits shall be established at the thousanddollar nearest to the amount computed on an actual basis.

5. All cash for funds which members are committed to lendto the corporation shall be prorated among the members in thesame proportion that the commitment of each bears to theaggregate commitment of all members.

6. Upon written notice given sixty days in advance, amember of the corporation may withdraw from membership in thecorporation at the expiration date of such notice and after theexpiration date shall be free of obligations hereunder exceptthose accrued or committed by the corporation prior to theexpiration date.

7. All loans to the corporation by members shall beevidenced by bonds, debentures, notes or other evidences ofindebtedness of the corporation which shall be freelytransferable at all times and which bear interest at a rate ofnot less than one-fourth of one percent in excess of the rate ofinterest determined by the board of directors to be the primerate prevailing at the date of issuance thereof in the city ofSt. Louis on unsecured commercial loans.

8. Notwithstanding the provisions of any other law, thecapital stock, notes or other evidences of indebtedness of acorporation established by this chapter, issued in accordancewith and by virtue of this chapter and the corporation's bylaws,shall be proper investments for the financial institutions whichbecome members. However, no loan limit established in thissection shall limit the extension of credit or investment by afinancial institution made on a secured or unsecured basispursuant to the legal loan limit of the financial institution butthe membership limit shall be deducted from the legal loan limitof the financial institution when the limits are prescribed bylaw to determine the net available legal loan limit of the memberfinancial institution.

9. Any financial institution in subsection 2 of thissection may lend funds on a temporary basis to a corporation withwhich it has entered into a credit agreement but the aggregateamount which the corporation is authorized to borrow pursuant tothe provisions of this subsection shall at no time exceed the sumof the balance at the time available to be borrowed by thecorporation from all member financial institutions and the amountat the time available to be borrowed by the corporation fromother sources, and each note evidencing the loan shall mature notmore than one year from the date thereof.

10. Except on membership borrowings, nothing contained inthis section shall preclude the corporation and any memberthereof from entering into a separate contract for a rate ofinterest different than that provided in this section.