§ 18-906. Members - Acceptance of loans.

(1) All financial institutions as defined herein are hereby authorized to become members of the corporation and to make loans to the corporation as provided herein.

(2) Any financial institution may request membership in the coporation by making application to the board of directors on such form and in such manner as said board of directors may require, and membership shall become effective upon acceptance of such application by the board.

(3) Each member of the corporation shall make loans to the corporation as and when called upon by it to do so on such terms and other conditions as shall be approved from time to time by the board of directors, subject to the following conditions:

(a) All loan limits shall be established at the thousand-dollar amount nearest to the amount computed in accordance with the provisions of this section.

(b) No loan to the corporation shall be made if immediately thereafter the total amount of the obligations of the corporation would exceed ten times the amount then paid in an outstanding capital stock, reserves or earned surplus of the corporation.

(c) The total amount outstanding at any one time on loans to a development corporation made by any member shall not exceed: (i) twenty percent (20%) of the total amount then outstanding on loans to such development corporation by all members thereof, (ii) the following limit, to be determined as of the time such member becomes a member, on the basis of figures contained in the most recent year-end statement prior to its application for membership; three percent (3%) of the capital and permanent surplus of banks, trust companies; three percent (3%) of the total reserve and surplus accounts of a savings and loan association; one percent (1%) of the capital and unassigned surplus of stock insurance companies, except fire insurance companies; one percent (1%) of the unassigned surplus of mutual insurance companies, except fire insurance companies; one-tenth of one percent (1/10 of 1%) of the assets of fire insurance companies; comparable limits for other financial institutions as established by the board of directors of the development corporation.  All loan limits shall be recomputed as of the first day of January of each even-numbered year, but no member's loan limit shall be increased as the result of such recomputation without the consent of such member.

(d) Each call made by the corporation shall be prorated among the members of the corporation in substantially the same proportion that the adjusted loan limit of each member bears to the aggregate of the adjusted loan limits of all members.  The adjusted loan limit of a member shall be the amount of such member's loan limit, reduced by the balance of outstanding loans made by such member to the corporation and the investment in capital stock of the corporation held by such member at the time of such call.

(e) All loans to the corporation by members shall be evidenced by bonds, debentures, notes, or other evidence of indebtedness of the corporation, which shall be freely negotiable at all times, and which shall bear interest at a rate of not less than one-half of one percent (1/2 of 1%) in excess of the rate of interest determined by the board of directors at the date of issuance to be the prime rate prevailing on unsecured commercial loans.

(f) Membership in the corporation shall be for the duration of the corporation provided that: (i) upon written notice given to the corporation one (1) year in advance, a member may withdraw from membership in the corporation at the expiration date of such notice, (ii) a member shall not be obligated to make any loans to the corporation pursuant to calls made subsequent to the receipt of notice of the withdrawal of said member.

Laws 1970, c. 187, § 6, emerg. eff. April 13, 1970.