A financial institution may apply to join a development corporation, and members must make loans when called on, but only within board-approved terms and loan-limit rules.
A financial institution may request membership in a development corporation by making application to the board of directors thereof on such form and in such manner as such board of directors may require, and membership shall become effective upon acceptance of such application by said board. Each member of any development corporation shall make loans to such development corporation as and when called upon by that corporation to do so on such terms and conditions as shall be approved from time to time by the board of directors subject to the following: 1. All loan limits shall be established at the thousand dollar amount nearest the amount computed in accordance with the provisions of this section. 2. No loan to a development corporation shall be made if immediately thereafter the total amount of the obligations of the development corporation calling for the loan would exceed ten times the amount then paid in on the outstanding capital stock of such corporation. 3. The total amount outstanding at any one time on loans to a development corporation made by a member thereof when added to the amount of the investment in the capital stock of such corporation and held by such member, shall not exceed the lesser of: a. Twenty percent of the total amount then outstanding on loans to such development corporation by all members thereof, including in said total amount outstanding amounts validly called for loan but not yet loaned. b. (1) The limit, to be determined as of the time such member becomes a member, on the basis of the audited balance sheet of such member at the close of its fiscal year immediately preceding its application for membership, as follows: (a) Banks and trust companies — two percent of the paid-in capital, surplus, and undivided profits. (b) Stock life insurance companies — one percent of capital and unassigned surplus. (c) Mutual life insurance companies — one percent of the unassigned surplus. (d) All other insurance companies — one-tenth of one percent of the assets. (e) Other financial institutions — such limits as may be approved by the board of directors of the development corporation. (2) Provided that the lending limit of any one member shall not exceed two hundred fifty thousand dollars. 4. Each call for loan shall be prorated among the members 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 obligations of the corporation to such member and the investment in capital stock of the corporation held by such member at the time of such call. 5. All loans to a development corporation by a member shall be evidenced by registered bonds, debentures, notes, or other evidences of indebtedness of the development corporation, which shall be freely transferable by the registered holder thereof on the books of the corporation. [C66, 71, 73, 75, 77, 79, 81, §496B.9] 2012 Acts, ch 1017, §97; 2012 Acts, ch 1023, §157 Referred to in §496B.2