OAR 441-720-0315
Member Business Loan Policies and Procedures

Prior to engaging in member business lending, a credit union must adopt member business loan policies and procedures. At a minimum, the policies and procedures must address the following:

(1)

Types of business loans to be made;

(2)

Identification of trade area to be served;

(3)

The maximum amount of credit union assets, relative to net worth, that will be invested in member business loans;

(4)

The maximum amount of credit union assets, relative to net worth, that will be invested in a given category or type of member business loan;

(5)

The maximum amount of credit union assets, relative to net worth, that will be loaned to any one member or group of associated members, subject to 441-720-0330 (Aggregate Loans to a Member or Associated Members);

(6)

The qualifications and experience (minimum of 2 years experience) of personnel involved in making and administering business loans;

(7)

Initial and ongoing analysis and documentation of the ability of the borrower to repay the loan;

(8)

Receipt and periodic updating of financial statements and other documents, including tax returns;

(9)

Documentation sufficient to support each request for an extension of credit, or an increase in an existing loan or line of credit, except where the board of directors finds that the required documentation is not generally available for a particular type of loan and states the reasons for those findings in the credit union’s written policies. The documentation must include the following:

(a)

Balance sheet, income statement and tax returns;

(b)

Cash flow analysis, history of borrower and business, and analysis of leveraging;

(c)

Comparison with industry average or similar analysis;

(10)

Collateral requirements must include all of the following:

(a)

Loan-to-value ratios;

(b)

Determination of value;

(c)

Determination of ownership;

(d)

Steps to be taken to secure various types of collateral;

(e)

Frequency of reevaluation of the value and marketability of the collateral; and

(f)

Insurance, if applicable.

(11)

Interest rates and maturities of business loans;

(12)

General loan procedures which include:

(a)

Loan monitoring; including loan review and grading system;

(b)

Servicing and follow-up;

(c)

Collections;

(d)

Loan officer limits; and

(e)

Borrower Documentation; such as loan agreement, note, security agreement, borrowing authority, and commitment letter.

(13)

Identification of individuals prohibited from receiving member business loans.

(14)

Procedures for adequate safeguards to minimize potential environmental liability.

Source: Rule 441-720-0315 — Member Business Loan Policies and Procedures, https://secure.­sos.­state.­or.­us/oard/view.­action?ruleNumber=441-720-0315.

441–720–0100
Scope and Application 441–720–0110
Definitions 441–720–0120
Risk Weights and Risk Categories 441–720–0130
Minimum Capital Ratio 441–720–0140
Procedures, Risk-Weight Ratios and Computations 441–720–0150
Required Reserve Transfers 441–720–0160
Fidelity Bond Coverage for Corporate Credit Union 441–720–0200
Purpose, Authority for Federal Tie-In Rules 441–720–0210
Adoption of Federal Regulations Concerning Purchase, Sale and Pledge of Eligible Obligations 441–720–0215
Procedures Required Prior to Exercise of Certain Investment Powers 441–720–0220
Investments in Investment and Borrowing Repurchase Agreements, Bankers Acceptances, Participation in Federal Funds Authorized 441–720–0225
Adoption of Federal Statutes, Rulings, Policy Regarding Mortgage Assumptions 441–720–0230
Adoption of Federal Statutes and Regulations Concerning Loan Participations 441–720–0300
Definitions 441–720–0305
Member Business Loan 441–720–0310
Implementation of Member Business Loan Program 441–720–0315
Member Business Loan Policies and Procedures 441–720–0320
Collateral and Security Requirements 441–720–0325
Recordkeeping Requirements 441–720–0330
Aggregate Loans to a Member or Associated Members 441–720–0335
Calculation of the Aggregate 15% Limit 441–720–0340
Aggregate Member Business Loan Limit for a Credit Union 441–720–0345
Exceptions to the Aggregate Member Business Loan Limit for a Credit Union 441–720–0350
Exception Procedure 441–720–0355
Construction and Development Lending 441–720–0360
Classification of Member Business Loans to Reserve for Potential Losses 441–720–0365
Minimum Reserves for Potential Loan Losses 441–720–0370
Prohibited Member Business Loans 441–720–0375
Available Waivers for Specific Loan Types 441–720–0380
Waiver Procedure
Last Updated

Jun. 8, 2021

Rule 441-720-0315’s source at or​.us