Section 15October 21, 1997, Sec./Art. 15

Limitations on lending authority. – a) An Association shall not commit itself to make any loans for amounts in excess of the total of the following amounts:

1) amount of cash available for loan purposes;

2) amount of cash which can be readily realized upon the sale or redemption of permissible investments made by the Association; and

3) amount of credit available for loan purposes from government or private financing institutions.

b) No Association shall directly or indirectly make any loans to any trustee or officer of such Association, either for himself or as agent or as partner of another, except with the written approval of the majority of the trustees of the Association, excluding the trustee concerned: Provided, That the total loans, direct or indirect, granted at any one time to such trustees and officers shall not exceed twenty percent (20%) of the total capital contributions of the Association; in all cases of the credit accommodations granted to trustees and officers under this subSec., the written approval of the majority of the trustees of the Association, excluding the trustee concerned, shall be entered upon the records of the Association and a copy of such entry shall be transmitted forthwith to the Bangko Sentral.

The transactions of all trustee-officers with the Association shall not be under terms more favorable than those transacted with other members. The office of any trustee or trustee-officer of an Association who violates the provisions of this subSec. shall immediately become vacant and the trustees or officers shall be punished by imprisonment of not less than one (1) year nor more than ten (10) years and by a fine of not less than Five thousand pesos (P5,000) nor more than Fifty thousand pesos (P50,000).