Marvin Mandel, Governor                        1419

420. Loan Limits.

(a) Limits. Each member shall lend funds to such corporation
as and when called upon to do so, but except as hereinafter permitted
the total amount on loan by any member at any one time shall not
exceed the following limit to be determined as of the time it became
a member, and such amount shall thereafter be readjusted annually
as of December 31 each year in the event of any change in the base
of the loan limit of such member: National banking associations,
State-chartered commercial banks and trust companies, two per cent
of capital and surplus; savings banks, two per cent of the guarantee
fund and undivided surplus; provided, however, that except as here-
inafter permitted the total amount on loan by any member at any
time shall not exceed two hundred fifty thousand dollars. All loan
limits shall be established at the thousand dollar nearest to the
amount computed on an actual basis. All calls of funds which mem-
bers are committed to lend to such corporation [may] shall be pro-
rated by such corporation among the members in the same propor-
tion that the maximum loan limit of each bears to the aggregate
loan limits of all members of such corporation. [Such corporation
shall have the right, in its discretion, to rotate loans among its
members.] Notwithstanding any other provisions of this subsection
any member may lend funds to the corporation in excess of the
loan limit for such corporation as above provided.

The corporation shall issue a call for funds on its members on
July 1, 1971, equal to the total principal sum then due the corpora-
tion by all its borrowers, less the principal amount then due on loans
made to the corporation other than by members. This call shall be
prorated among members on the basis of the percentage which the
maximum loan limit of each member bears to the total of the maxi-
mum loan limit of all members as determined on the basis of capital
and surplus of all members as of December 31, 1970. The corporation
shall simultaneously with the making of such call select loans from
its loan portfolio having a total unpaid principal balance then due
the corporation approximating as closely as possible such call. A
participating interest in each loan so selected shall be allocated on
the books of the corporation to each member on the basis of the per-
centage used to arrive at the amount each member shall have been
called upon to loan the corporation. All indebtedness to members in-
curred prior to July 1, 1971, shall be paid in full both principal and
interest, from the proceeds of the call to be issued on July 1, 1971.

Subsequent to July 1, 1971, from time to time, as and when the
corporation has made or is about to make loans totaling not less
than $100,000.00, members shall become liable for a call equal to
said loans, subject to the maximum call limit restriction. Such new
call or calls made pursuant to this liability shall be prorated among
the members, and participating interests shall be allocated among
members, in the loans necessitating such call on the same basis and
manner as from time to time may be applicable pursuant to the pro-
visions of this subparagraph (a).

The evidences of the indebtedness of the corporation to its mem-
bers incurred pursuant to calls made on or after July 1, 1971, shall be
in the form of time notes collateralized by the allocation of partici-
pating interests, which notes shall have a maturity date correspond-
ing to the maturity date of the loan most remotely coming due in