Insiders Eligible For PreferentialLoans
OLYMPIA, Wash. - (04/07/05) -- A credit union may grant loans toits employees at more favorable terms than those provided to itsmembers, according to a new legal opinion letter issued by stateregulators here. The legal opinion, issued by the Department ofFinancial Institutions, notes that neither the state's credit unioncode or NCUA's rules forbids credit unions from offering loandiscounts to their employees. The lone exception is if thoseemployees are also serving as directors or members of the credit orsupervisory committees, the state regulator said. The state lawspecifically prohibits credit unions from offering loans todirectors or supervisory and credit committee members under morefavorable terms and conditions than loans offered to members,generally.