Removing Barriers Blog

Indiana Credit Union League Ask Legislature for Bill to Modernize Outdated Lending Restrictions to Officers
Posted February 01, 2016 by CUNA Advocacy


Currently, Indiana law places restrictions on how loans can be made to individual officers of state-chartered credit unions, including an aggregate limit on how much money an officer can borrow from the credit union. The language is based on a similar federal regulation that applies to all national and state banks and thrifts (the Federal Reserve Board’s Regulation O). The aggregate loan limit is essentially $100,000 with a few limited exceptions like first mortgages and loans for the education of the officer’s children. While the limitations under Indiana law apply to officers of state-chartered credit unions and the similar Regulation O limitations apply to all banks and thrifts, officers of federal credit unions do not face the same limitations and are able to borrow significantly more from their credit unions.  The Indiana Credit Union League argues that this limit is outdated and needs to be increased to account for inflation is advancing a bill, S 242 that would change the law to reflect the inflation-adjusted loan limit.