Or. Admin. Code § 441-720-0370 - Prohibited Commercial Loans
(1) A
credit union may not grant a commercial loan to the credit union's senior
management, which shall include all chief officers, vice presidents and staff
directors, as well as any credit union staff directly involved in commercial
lending management, underwriting, servicing, or collecting; or any associated
borrower or the immediate family member of anyone listed in this
section.
(2) Equity agreement/joint
ventures. The credit union may not grant a commercial loan if any additional
income received by the credit union or senior management employees is tied to
the profit or sale of the business or commercial endeavor for which the loan is
made.
(3) Loans to members of the
board of directors. A credit union may not grant a commercial loan to a
director who is a member of the credit union board of directors unless the
board of directors approves in advance granting the loan and the director is
recused from the decision making process.
(4) Conflicts of interest. Any third-party
used by a credit union to meet the requirements of this part must be
independent from the commercial loan transaction and may not have a
participation interest in a loan or an interest in any collateral securing a
loan that the third-party is responsible for reviewing, or an expectation of
receiving compensation of any sort that is contingent on the closing of the
loan, with the following exceptions:
(a) A
third-party may provide a service to the credit union that is related to the
transaction, such as loan servicing.
(b) The third-party may provide the requisite
experience to a credit union and purchase a loan or a participation interest in
a loan originated by the federally insured credit union that the third-party
reviewed.
(c) A credit union may
use the services of a credit union service organization that otherwise meets
the requirements of OAR
441-720-0310(2)(c)
of this part even if the credit union service organization is not independent
from the transaction, provided the credit union has a controlling financial
interest in the credit union service organization as determined under
GAAP.
Notes
Statutory/Other Authority: ORS 723.102
Statutes/Other Implemented: ORS 723.152, 723.156 & 723.512
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