Public Law 95–22

Paragraph (5) of section 107 of the Federal Credit Union Act (12 U.S.C. 1757) is amended to read as follows:

“(5)“(5)

to make loans, the maturities of which shall not exceed

Federal credit unions, powers.

twelve year’s except as otherwise provided herein, and extend lines of credit to its members, to other credit unions, and to credit union organizations and to participate with other credit unions, credit union organizations, or financial organizations in making loans to credit union members in accordance with the following:

“(A)“(A)

Loans to members shall be made in conformity with

Loans to members.

criteria established by the board of directors: Provided,That—

“(i)“(i)

a residential real estate loan which is made to

Residential loans.

finance the acquisition of a one-to-four-family dwelling for the principal residence of a credit union member, the sales price of which is not more than 150 per centum of the median sales price of residential real property situated in the geographical area (as determined by the board of directors) in which the property is located, and which is secured by a first lien upon such dwelling, may have a maturity not exceeding thirty years, subject to the rules and regulations of the Administrator;

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“(ii)“(ii)

a loan to finance the purchase of a mobile home,

Mobile home loans.

which shall be secured by a first lien on such mobile home, to be used by the credit union member as his residence, or for the repair, alteration, or improvement of a residential dwelling which is the residence of a credit union member shall have a maturity not to exceed fifteen years unless such loan is insured or guaranteed as provided in subparagraph (iii);

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“(iii)“(iii)

a loan secured by the insurance or guarantee of the Federal Government, of a State government, or any agency of either may be made for the maturity and under the terms and conditions specified in the law under which such insurance or guarantee is provided;

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“(iv)“(iv)

a loan or aggregate of loans to a director or member of the supervisory or credit committee of the credit union making the loan which exceeds $5,000 plus pledged shares, be approved by the board of directors;

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“(v)“(v)

loans to other members for which directors or members of the supervisory or credit committee act as guarantor or endorser be approved by the board of directors when such loans standing alone or when added to any outstanding loan or loans of the guarantor or endorser exceeds $5,000;

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“(vi)“(vi)

the rate of interest not exceed 1 per centum per month on the unpaid balance inclusive of all service charges;

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“(vii)“(vii)

the taking, receiving, reserving, or charging of a rate of interest greater than is allowed by this paragraph, when knowingly done, shall be deemed a forfeiture of the entire interest which the note, bill, or other evidence of debt carries with it, or which has been agreed to be paid thereon. If such greater rate of interest has been paid, the person by whom it has been paid, or his legal representatives, may recover back from the credit union taking or receiving the same, in an action in the nature of an action of debt, the entire amount of interest paid; but such action must be commenced within two years from the time the usurious collection was made;

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“(viii)“(viii)

a borrower may repay his loan, prior to maturity in whole or in part on any business day without penalty;

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“(ix)“(ix)

loans shall be paid or amortized in accordance with rules and regulations prescribed by the Administrator after taking into account the needs or conditions of the borrowers, the amounts and duration of the loans, the interests of the members and the credit unions, and such other factors as the Administrator deems relevant.

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“(B)“(B)

A self-replenishing line of credit to a borrower may be established to a stated maximum amount on certain terms and conditions which may be different from the terms and conditions established for another borrower.

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“(C)“(C)

Loans to other credit unions shall be approved by the board of directors.

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“(D)“(D)

Loans to credit union organizations shall be approved by the board of directors and shall not exceed 1 per centum of the paid-in and unimpaired capital and surplus of the credit union. A credit union organization means any organization as determined by the Administrator, which is established primarily to serve the needs of its member credit unions, and whose business relates to the daily operations of the credit unions they serve.

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“(E)“(E)

Participation loans with other credit unions, credit union organizations, or financial organizations shall be in accordance with written policies of the board of directors: Provided, That a credit union which originates a Ioan for which participation arrangements are made in accordance with this subsection shall retain an interest of at least 10 per centum of the face amount of the loan.”.

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Paragraph (6) of such section is repealed.

Paragraph (7) of section 107 of the Federal Credit Union Act (12 U.S.C. 1757) is redesignated as paragraph (6) and is amended to read as follows:

“(6)“(6)

to receive from its members, from other credit unions,

Payments on shares and share certificates.

12 USC 1787.

from an officer, employee, or agent of those nonmember units of Federal, State, or local governments and political subdivisions thereof enumerated in section 207 of this Act and in the manner so prescribed, and from nonmembers in the case of credit unions serving

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predominately low-income members (as defined by the Administrator) payments on shares which may be issued at varying dividend rates, and payments on share certificates which may be issued at varying dividend rates and maturities, subject to such terms, rates, and conditions as may be established by the board of directors, within limitations prescribed by the Administrator.”.

Repeal.

Paragraph (8) of such section is redesignated as paragraph (7) and amended by adding the following paragraph:

“(I)“(I)

in the shares, stocks, or obligations of any other organization, providing services which are associated with the routine operations of credit unions, up to 1 per centum of the total paid in and unimpaired capital and surplus of the credit union with the approval of the Administrator: Provided, however, That such authority does not include the power to acquire control directly or indirectly, of another financial institution, nor invest in shares, stocks or obligations of an insurance company, trade association, liquidity facility or any other similar organization, corporation, or association, except as otherwise expressly provided by this Act

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Paragraphs (9) through (14) of section 107 are redesignated paragraphs (8) through (13).

Paragraph (13), as redesignated, of section 107 is amended by inserting after the first comma the following: “to purchase, sell, pledge, or discount or otherwise receive or dispose of, in whole or in part, any eligible obligations (as defined by the Administrator) of its members and”.

Section 107 is further amended by adding the following new paragraph after paragraph (13):

“(14)“(14)

to sell all or a part of its assets to another credit union, to purchase all or part of the assets of another credit union and to assume the liabilities of the selling credit union and those of its members subject to regulations of the Administrator;”.

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by adding “and lines of credit” after “loans” in the first sentence;

by striking “No loan shall be made unless it is approved” in the third sentence and inserting in lieu thereof “Except for those loans or lines of credit required to be approved by the board of directors in section 107(5) of this Act, approval of an application shall be” and by adding “and lines of credit” after “the power to approve loans”;

by striking “loan” as it appears after “each” and before “approved” in the fourth sentence, and inserting in lieu thereof “application”;

by striking “loans” in the fifth sentence and inserting in lieu thereof “applications”;

by striking “for any loan which” in the sixth sentence and inserting in lieu thereof “with respect to any loan or line of credit for which the application”;

by adding “and lines of credit” after “loans” in the eighth sentence and by striking “the purpose for which the loan is desired”;

by striking the ninth sentence; and

by striking “$200 or” and “whichever is greater”, in the tenth sentence.

Subsection (g) (1) of section 206 of the Federal Credit Union Act (12 U.S.C. 1786) is amended by striking out “and that such violation or practice or breach of fiduciary duty is one involving personal dishonesty on the part of such director, officer, or committee member”.

Subsection (g) (2) of such section is amended by changing “dishonesty and unfitness” to read “dishonesty or unfitness” each place it appears therein.