Officials Can't Get PreferentialLoans

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ALEXANDRIA, Va. - (05/04/06) --Federal credit unions may not providepaid employees who sit on volunteer committees a loan ratereduction offered all employees, according to NCUA. “A creditunion cannot offer preferential loan rates to any of its officials,the agency said in a new legal opinion issued to People's CU, inMiddletown, R.I. Credit union officials, said NCUA, may receivereduced loan rates, but the rates for officials must not be morefavorable than comparable rate to other credit union members. Therule is intended to limit insider dealing and would not beeffective if employee-officials could receive preferential loanrates as part of a their employee compensation, saidNCUA.

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