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Created by the U.S. Congress in 1970, the National Credit Union Administration is an independent federal agency that insures deposits at federally insured credit unions, protects the members who own credit unions, and charters and regulates federal credit unions.
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Lending to Churches

95-0227 / March 1995

Lending to Churches

Subject

Consumer Lending

Historic Status

Historic

March 6, 1995

Bohdan Wenglowskyj
Gough, Skipworth, Summers, Eves & Trevett, P.C.
700 Reynolds Arcade
16 East Main Street
Rochester, New York 14614-1803

Re: Lending to Churches (Your February 15, 1995, Letter)

Dear Mr. Wenglowskyj:

You have asked whether it is permissible for a federal credit union (FCU) to grant a loan to a not-for-profit organization such as a church. This type of loan is permissible if the church is a member of the FCU. A loan to a church is considered a business loan and must meet the requirements set forth in Section 701.21(h) of NCUA's Regulations. Furthermore, the Standard FCU Bylaws limits loans to a nonnatural person such as a church to its shareholdings in the FCU. We recommend that the FCU consider adopting the standard bylaw amendment to Article XII, Section 1 which permits loans to other than natural persons in excess of their shareholdings.

Please let me know if you need additional assistance.

Sincerely,

Richard S. Schulman
Associate General Counsel

GC/MJMcK:bhs
SSIC 3501
95-0227

Last modified on

11/14/24