May 29, 1998
Ed Templeton, President
SRP Federal Credit Union
P.O. Box 6730
North Augusta, South Carolina 29861
You have asked whether it is permissible for the board of directors
to approve all loans to officials, senior management and loan
officers if a federal credit union has a credit committee. As
explained below, the answer is no.
You advise that your credit union has a credit committee. The
Federal Credit Union Act (Act) states that, if the bylaws provide
for a credit committee, it will approve loan applications unless
a loan application is one that the Act requires be approved by
the board or unless the credit committee has delegated its authority
to loan officers. 12 U.S.C. §1761c. The Act requires the
board to approve loans to directors and committee members or loans
guaranteed by directors or committee members that are over $20,000.
12 U.S.C. §1757(5)(A)(iv) and (v). These are the only loans
the board should be approving. The credit committee or loan officers
should be approving all other loans.
Sincerely,
Sheila A. Albin
Associate General Counsel
GC/MFR:bhs
SSIC 3500
98-0308