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64 Stat. 879; 80 Stat. 1046, 1054. 12 USC 1818. 74 Stat. 547. 12 USC 1817. Rules and regulations.

Federal Credit Unions, powers. 73 Stat. 630.

Loans to officers, conditions.

PUBLIC LAW 90-44-JULY 3, 1967

[81 STAT.

same category that could lawfully be extended to him by the bank, he shall make a written report to the board of directors of the bank, stating the date and amount of each such extension of credit, the security therefor, and the purposes for which the proceeds have been or are to be used. "(7) This subsection does not prohibit any executive officer of a member bank from endorsing or guaranteeing for the protection of the bank any loan or other asset previously acquired by the bank in good faith or from incurring any indebtedness to the bank for the purpose of protecting the bank against loss or giving financial assistance to it. "(8) Each day that any extension of credit in violation of this subsection exists is a continuation of the violation for the purposes of section 8 of the Federal Deposit Insurance Act. " (9) Each member bank shall include with (but not as part of) each report of condition and copy thereof filed under section 7(a)(3) of the Federal Deposit Insurance Act a report of all loans under authority of this subsection made by the bank since its previous report of condition. "(10) The Board of Governors of the Federal Reserve System may prescribe such rules and regulations, including definitions of terms, as it deems necessary to effectuate the purposes and to prevent evasions of this subsection. SEC. 2. Section 8 of the Federal Credit Union Act (12 U.S.C. 1757) is amended— (1) by changing, in paragraph (5) thereof, "shall exceed the amount of his holdings in the Federal Credit Union as represented by shares thereof plus the total unencumbered and unpledged shareholdings in the Federal Credit Union of any member pledged as security lor the obligation of such director or committee member" to read "may be made except as authorized under paragraph (6) of this section"; (2) by redesignating paragraphs (6) through (13) of that section as paragraphs (7) through (14), respectively; and (3) by inserting, immediately after paragraph (5), the following new paragraph: "(6) to niake loans to its own directors and to members of its own supervisory or credit committee, but all such loans shall be reported to the Director at least annually, and such a loan may be made only if— " (A) the loan complies with all lawful requirements under this Act with respect to loans to other borrowers and is not on terms more favorable than those extended to other borrowers; " (B) upon the making of the loan, the aggregate amount of loans outstanding to the borrower will not exceed the total amount of shareholdings in the credit union, not otherwise encumbered or pledged, which are pledged as security for loans to the borrower, or $5,000, whichever is greater; " (C) upon the making of the loan, the aggregate amount of loans outstanding under authority of this paragraph will not exceed 20 per centum of the unimpaired capital and surplus of the credit union; " (D) the loan is approved by the credit committee and by the board of directors after the submission to them of a detailed current financial statement by the borrower; and " (E) the borrower takes no part in the consideration of

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