Texas Administrative Code › Title 7 - BANKING AND SECURITIES › Part 6 - CREDIT UNION DEPARTMENT › Chapter 91 - CHARTERING, OPERATIONS, MERGERS, LIQUIDATIONS › Subchapter G - LENDING POWERS › Section 91.719 - Loans to Officials and Senior Management Employees

Current through Reg. 49, No. 28; July 12, 2024
(a) Prohibition on Preferential Rates, Terms,
				  and Conditions. The rates, terms, conditions, and availability of any loan or
				  other extension of credit made to, or endorsed or guaranteed by, a director,
				  senior management employee, member of the credit committee, or an immediate
				  family member of any such individual shall not be more favorable than the
				  rates, terms, conditions, and availability of comparable loans or credit to
				  other credit union members.
(b)
				  Approval of Governing Board. Before making a loan, extending credit, or
				  becoming contractually liable to make a loan or extend credit to a director,
				  senior management employee, member of the credit committee, or an immediate
				  family member of such individual, the board of directors must approve the
				  transaction if the loan or the extension of credit or aggregate of outstanding
				  loans and extensions of credit to any one person, the person's business
				  interests, and the members of the person's immediate family is greater than 15%
				  of the credit union's net worth. A loan fully secured by shares in the credit
				  union or deposits in other financial institutions shall not be subject to, or
				  included in, the aggregate amounts included in this section.
(c) Definition. For purposes of this section,
				  senior management employees shall include the chief executive officer, any
				  assistant chief executive officers (e.g. vice presidents and above), and the
				  chief financial officer; and immediate family members shall include a person's
				  spouse or any other person living in the same household.
(d) Aggregate Limit on Insider Loans. The
				  aggregate of all outstanding loans or extensions of credit made to, or endorsed
				  or guaranteed by, all directors, credit committee members, senior management
				  employees, and immediate family members of all such individuals, shall not
				  exceed 20% of the credit union's total assets. The requirements described in
				  this subsection shall apply unless waived in writing by the commissioner for
				  good cause shown.
(e) Reports to
				  Governing Board. At least annually, the president shall make a report to the
				  board of directors on the outstanding indebtedness of all directors, credit
				  committee members, senior management employees, and immediate family members of
				  such individuals. The Board's review shall be included as part of the minutes
				  of the meeting at which the report was presented. The report required by this
				  section shall include the following information:
(1) The amount of each indebtedness;
				  and
(2) A description of the terms
				  and conditions (including the interest rate, the original amount and date,
				  maturity date, payment terms, security, if any, and any other unusual term or
				  condition) of each extension of credit.