BANKS AND BANKING; LOAN ASSOCIATIONS; CREDIT UNIONS
CREDIT UNION ACT
Powers of Credit Unions
383-E:4-409 Loan of Securities.
In order to increase income from investment securities, any credit union may loan to brokerage firms which are members of an exchange any stocks, bonds or other securities in which the credit union has invested under this chapter provided that:
(a) Each loan shall be executed through a correspondent bank having assets of not less than $500,000,000;
(b) At the inception of the loan at least 100 percent of the market value of the securities lent shall be secured by cash or debt obligations of the United States or debt obligations for which the faith and credit of the United States is pledged for the payment of the principal and interest thereof;
(c) At all times during the term of the loan the collateral securing the same shall be equal in value to not less than 95 percent of the market value of the securities loans by the credit union;
(d) The market value of the securities loaned by the credit union under the authority of this action shall not, at any one time, exceed 10 percent of the aggregate market value of all stocks, bonds or other securities then held by the credit union as investments under this chapter; and
(e) No loan shall be made to any brokerage firm which is then listed for and under special surveillance by an exchange in the belief that such brokerage firm is in or is approaching financial difficulty, and which is, at the time, the subject of any pending notice given by any exchange to the Securities Investor Protection Corporation and the Securities and Exchange Commission under 15 U.S.C. section 78eee(a)(1).
(f) Every brokerage firm receiving the loan under this section shall be registered, and every agent soliciting the loan shall be licensed, with the bureau of securities regulation of the secretary of state.
Source. 2015, 272:16, eff. Oct. 1, 2015.