§ 36a-457a — Loan policy.

Connecticut § 36a-457a

• Jurisdiction: Connecticut
• Title 36a: The Banking Law of Connecticut
• Ch. 667: Credit Unions

Text

(a) At least once a year, the governing board of each Connecticut credit union shall adopt a written loan policy governing loans made pursuant to sections 36a-457a to 36a-458a, inclusive. The governing board of each Connecticut credit union shall develop and implement internal controls that are reasonably designed to ensure compliance with such loan policy. The loan policy shall require written applications for all extensions of credit and address the categories and types of secured and unsecured extensions of credit offered by the credit union, the manner in which mortgage loans, member business loans and insider loans will be made and approved, underwriting guidelines and collateral requirements, and, in accordance with safety and soundness, acceptable standards for title review, title insurance and appraiser qualifications, procedures for the approval and selection of appraisers, appraisal and evaluation standards, and the credit union's administration of the appraisal and evaluation process. The commissioner may review a Connecticut credit union's loan policy and may order changes to be made to ensure safe and sound lending practices. (b) A Connecticut credit union shall use its best efforts to make such secured and unsecured extensions of credit to its members, including lease financing for personal property if the leases are the functional equivalent of secured loans for personal property, with such maturities as may be determined by the governing board, repayable in consecutive weekly, biweekly, semimonthly, monthly, quarterly or semiannual installments, but which may be repaid in whole or in part prior to maturity, and on such terms as the bylaws and loan policy of such credit union may permit. (c) Except as otherwise provided in this section, the total direct or indirect liabilities of any one obligor, however incurred, to any Connecticut credit union, exclusive of such credit union's investment in the investment securities of such obligor, shall not exceed at the time incurred the greater of two hundred dollars or ten per cent of such credit union's total assets. For purposes of determining the limitations of this subsection, in computing the liabilities of an obligor, a liability is incurred at the time of the closing of the transaction, unless such closing is preceded by a legally binding written commitment to enter into the transaction, in which case such liability is incurred at the time of commitment and is net of any liabilities of the obligor to such Connecticut credit union that will be paid with the proceeds of the commitment at the time of closing. The limitations provided for in this subsection may be exceeded for a period of time not to exceed six hours if at the closing of any transaction at which such obligor incurs such liabilities to a Connecticut credit union in excess of such limitations, such credit union immediately assigns or participates out to one or more other persons an amount that constitutes not less than the excess over the applicable limitation. For purposes of this subsection, in computing the liabilities of a partnership the individual liabilities of the general partners shall be included; and in computing the individual liabilities of a general partner, the liabilities of the partnership shall be included.

Legislative History

(P.A. 02-73, S. 57; P.A. 03-84, S. 59; P.A. 18-117, S. 7.) History: P.A. 03-84 changed “Commissioner of Banking” to “commissioner” in Subsec. (a), effective June 3, 2003; P.A. 18-117 amended Subsec. (a) by replacing provision re Connecticut credit union to adopt and implement written loan policy with provision re governing board of each Connecticut credit union to adopt at least once a year written loan policy governing loans pursuant to Secs. 36a-457a to 36a-458a, adding provision re governing board to develop and implement internal controls reasonably designed to ensure compliance with loan policy, and making technical and conforming changes.