(a)Any financial institution may request membership in the company by making application to the board of directors or the management committee on such form and in such manner as the board of directors or the management committee may require, and membership shall become effective upon the acceptance of the application by the board of directors or the management committee.
(b)Each member of the company may make loans to the company as and when called upon by it to do so on such terms and other conditions as shall be approved from time to time by the board of directors or the management committee, subject to the following conditions:
(1)All loan limits shall be established at the thousand-dollar amount nearest to the amount computed in accordance with the provisions of this section;
Free access — add to your briefcase to read the full text and ask questions with AI
(a) Any financial institution may request membership in the company by making application to the board of directors or the management committee on such form and in such manner as the board of directors or the management committee may require, and membership shall become effective upon the acceptance of the application by the board of directors or the management committee. (b) Each member of the company may make loans to the company as and when called upon by it to do so on such terms and other conditions as shall be approved from time to time by the board of directors or the management committee, subject to the following conditions: (1) All loan limits shall be established at the thousand-dollar amount nearest to the amount computed in accordance with the provisions of this section; (2) No loan to a company organized under this subchapter shall be made by members pursuant to a call made by the company if immediately thereafter the total amount of the loans will exceed ten (10) times the amount then paid in on the outstanding stock or the units of interest of the company plus ten (10) times the earned surplus of a corporation less reserves or ten (10) times the undistributed earnings of a limited liability company less reserves; (3) The total amount outstanding on loans to a company made by any member at any one (1) time, when added to the amount of the investment in the capital stock or the units of interest of the company then held by that member, shall not exceed the limitation on loans established by law, rule, or regulation applicable to the member or, in the absence of any limitation, the amount approved by the board of directors or the management committee for that member; (4) (A) Each call made by the company may be prorated among members of a company in substantially the same proportion that the adjusted loan limit of each member bears to the aggregate of the adjusted loan limits of all members. (B) The adjusted loan limit of a member shall be the amount of the member's loan limit, reduced by the balance of outstanding loans made by the member to the company and the investment in capital stock of a corporation or units of interest in a limited liability company held by the member at the time of the call, and further reduced, in the case of a member who has assumed the obligation of a financial institution withdrawn from membership pursuant to § 15-4-1219(a)(2) , by the balance of outstanding loans made to the company by the financial institution; and (5) All loans to a company by members shall be evidenced by bonds, debentures, notes, or other evidence of indebtedness of the company which shall be freely transferable at all times and which shall bear interest at a rate which may be adjusted from time to time in a manner determined by the board of directors or the management committee. The rate shall not be less than one-quarter of one percent (0.25%) in excess of the prime or base rate of interest prevailing at the time of the adjustment for commercial banks in the City of Little Rock on unsecured commercial loans.