N.D. Cent. Code § 6-06-14.1

6-06-14.1. Loans - How made - Security - Meetings and duties of loan administration -

Preferential loans.

1. The duty of loan administration falls to the credit committee if the bylaws establish a

credit committee, or to the credit manager appointed by the board of directors if the

bylaws do not provide for a credit committee. At a minimum, loan administration must

include:

a. Oversight over all loans.

b. Performance of loan-related duties as often as necessary, and in the case of a

credit committee, a meeting at least once each month. Each member of the credit

committee must receive prior notice of the time and location of a meeting.

c. Loan applications, notes, security instruments, and all other loan documentation

necessary to execute the transaction on forms approved by the committee or

credit manager which set forth the purpose for which the loan is desired, the

security, if any, which is offered, and such other data as the committee or credit

manager may require.

d. Documentation that the loan complies with board of directors-approved loan

policies, including policy limits on the maximum unsecured loans to one borrower

and the limit on maximum total loans to a borrower.

e. Documented approval or denial of the loan by the majority of the entire credit

committee or by the credit manager, except that the credit committee or credit

manager may appoint and delegate to one or more loan officers the power to

approve loans up to the limit established by the board of directors.

f. Sufficient segregation of duties to limit risk or error if possible. At a minimum, an

individual may not disburse funds of the credit union for any loan that has been

approved by that individual in that individual's capacity as a loan officer.

2. Not more than one member of the credit committee may be appointed as a loan officer,

unless credit union bylaws provide for a board of directors-appointed credit manager

and the credit committee is made up of credit union employees appointed by the credit

manager.

3. Every loan by a credit union to, or guaranteed by, its directors, officers, managers, and

committee members must:

a. Be current as outlined on the terms of the loan agreement.

b. Be made on substantially the same terms, including interest rates, fee structure,

and collateral, as those prevailing at the time for comparable transactions with

other persons.

c. Be written in strict conformity with the credit union's policies, rules, and

regulations.

4. An exception may be made for a loan otherwise prohibited by this section if the loan is

directly related to a retirement investment benefit plan for credit union employees.