Section 371.120

Title XXIV BUSINESS AND FINANCIAL INSTITUTIONS

Chapter 371

Effective - 06 Jul 1994, see footnote   

  371.120.  Members of corporation to be financial institutions — loans by members, limits. — 1.  The members of the corporation shall consist of such financial institutions as make application for membership in the corporation and membership becomes effective upon the acceptance of the application by the board of directors.

  2.  Financial institutions shall include but are not limited to national and state banks, trust companies, federal and state savings and loan associations or corporations, public or private pension or retirement funds, stock or mutual insurance and surety companies or related corporations, partnerships, foundations or any other entity engaged in lending or investing funds.

  3.  Each member shall lend funds to the corporation pursuant to the commitment of the member as and when called upon by the corporation to do so, but the total amount on loan by any members at any one time shall not exceed the following limit to be determined as of the time it became a member and shall be annually readjusted in the event of any change in the base of the loan limit of such member:

  (1)  National and state banks and trust companies, two percent of capital and surplus;

  (2)  Federal and state savings and loan associations or corporations, not in excess of limits fixed and prescribed by regulations established by the division of finance;

  (3)  Stock insurance companies, two percent of capital and surplus;

  (4)  Surety and casualty companies, two percent of capital and surplus;

  (5)  Mutual insurance companies, two percent of guaranty fund or of surplus whichever is applicable;

  (6)  For all other financial institutions such limits as may be approved by the board of directors of the corporation.

  4.  All loan limits shall be established at the thousand dollar nearest to the amount computed on an actual basis.

  5.  All cash for funds which members are committed to lend to the corporation shall be prorated among the members in the same proportion that the commitment of each bears to the aggregate commitment of all members.

  6.  Upon written notice given sixty days in advance, a member of the corporation may withdraw from membership in the corporation at the expiration date of such notice and after the expiration date shall be free of obligations hereunder except those accrued or committed by the corporation prior to the expiration date.

  7.  All loans to the corporation by members shall be evidenced by bonds, debentures, notes or other evidences of indebtedness of the corporation which shall be freely transferable at all times and which bear interest at a rate of not less than one-fourth of one percent in excess of the rate of interest determined by the board of directors to be the prime rate prevailing at the date of issuance thereof in the City of St. Louis on unsecured commercial loans.

  8.  Notwithstanding the provisions of any other law, the capital stock, notes or other evidences of indebtedness of a corporation established by this chapter, issued in accordance with and by virtue of this chapter and the corporation's bylaws, shall be proper investments for the financial institutions which become members.  However, no loan limit established in this section shall limit the extension of credit or investment by a financial institution made on a secured or unsecured basis pursuant to the legal loan limit of the financial institution but the membership limit shall be deducted from the legal loan limit of the financial institution when the limits are prescribed by law to determine the net available legal loan limit of the member financial institution.

  9.  Any financial institution in subsection 2 of this section may lend funds on a temporary basis to a corporation with which it has entered into a credit agreement but the aggregate amount which the corporation is authorized to borrow pursuant to the provisions of this subsection shall at no time exceed the sum of the balance at the time available to be borrowed by the corporation from all member financial institutions and the amount at the time available to be borrowed by the corporation from other sources, and each note evidencing the loan shall mature not more than one year from the date thereof.

  10.  Except on membership borrowings, nothing contained in this section shall preclude the corporation and any member thereof from entering into a separate contract for a rate of interest different than that provided in this section.

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(L. 1961 p. 157 § 10, A.L. 1963 p. 478, A.L. 1978 S.B. 657, A.L. 1994 H.B. 1165)

Effective 7-06-94