WILLIAM DONALD SCHAEFER, Governor

Ch. 369

CHAPTER 369

(Senate Bill 563)

AN ACT concerning

Credit Unions - Required Security

FOR the purpose of repealing a credit union's authority to make
an unsecured loan of certain amount or less without the
approval of the Bank Commissioner; increasing the maximum
unsecured loan limit a credit union may offer with the
approval of the Bank Commissioner; providing that a credit
union may accept any a recorded second lien on real or
leasehold property as security; and making stylistic
changes.

BY repealing and reenacting, with amendments,

Article - Financial Institutions
Section 6-505

Annotated Code of Maryland
(1986 Replacement Volume)

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That the Laws of Maryland read as follows:

Article - Financial Institutions

6-505.

(a)  A loan by a credit union to a member shall be secured
as required by [the bylaws of] the credit union, subject to the
provisions of this section.

(b) [(1) A credit union may make a loan of $400 or less
to a member without security.

(2)] With the approval of the Bank Commissioner, a
credit union may [make loans] ESTABLISH A MAXIMUM UNSECURED
LOAN LIMIT of [$5,000] $10,000 $7,500 or less to members
[without security].

(c)  A credit union may accept as security for a loan:

(1)  An endorsed note;

(2)  A note secured by a recorded [first] OR SECOND
lien on real OR LEASEHOLD property;

(3)  An assignment of shares or deposits in the credit
union; or

- 1977 -