Conn. Gen. Stat. § 36a-458a Loans. Definitions

• Library: Connecticut Statutes
• Edition: 2023
• Currency: Current with legislation from the 2023 Regular and Special Sessions.
• Year: 2023
• Citation: Conn. Gen. Stat. § 36a-458a

(a) As used in this section:

(1) "Associated member" means any member with a shared ownership, investment or other pecuniary interest in a business or commercial endeavor with the borrower.

(2) "Construction loan" means a loan for developing or acquiring and developing real estate, as defined in subsection (a) of section 36a-457b, where the borrower intends to convert such real estate to income-producing property or use such real estate for income-producing purposes, including residential housing for rental or sale, or commercial, industrial or similar purposes.

(3) "Member business loan" means any loan, line of credit or unfunded commitment thereof, letter of credit or any other extension of credit, where the borrower intends to use or uses the proceeds for any of the following purposes:

(A) Commercial;

(B) corporate;

(C) investment property;

(D) business venture; or

(E) agricultural, but does not include the following loans:

(i) A loan fully secured by a lien on a one-to-four family residence that is the primary residence of the member;

(ii) A loan fully secured by shares in the credit union making the loan or by shares or deposits in other financial institutions;

(iii) One or more loans to a member or an associated member where the proceeds are to be used or are used for the purposes specified in this subdivision to benefit a common endeavor and which, in the aggregate, are equal to less than fifty thousand dollars;

(iv) A loan where any agency of the federal government, a state or any political subdivision of such state, fully insures or guarantees repayment, or provides an advance commitment to purchase the loan in full; or

(v) A loan granted by the corporate Connecticut credit union to a Connecticut credit union, federal credit union or out-of-state credit union.

(4) "Net worth" means retained earnings under generally accepted accounting principles.

(5) "Net outstanding member business loan balance" means the outstanding loan balance, including any unfunded commitment, exclusive of the portion of the member business loan secured by shares in the credit union, or by shares or deposits in other financial institutions, or fully or partially insured or guaranteed by any agency of the federal government, a state or any political subdivision of such state, or subject to an advance commitment to purchase by any agency of the federal government, a state or any political subdivision of such state.

(b) No Connecticut credit union shall make a member business loan unless it has adequate net worth as determined by the commissioner, develops a member business loan program and obtains the prior written approval of the commissioner for such program. The request for approval of such program shall include a member business loan policy that meets the requirements of subsection (c) of this section and shall demonstrate that sufficient resources, knowledge, systems and procedures are in place to monitor and control the risks involved. A Connecticut credit union that makes member business loans shall use the services of or employ an individual for the purpose of processing, making or servicing member business loans with at least two years direct experience with the types or categories of member business loans the credit union intends to make.