Ohio § 1726.06

§ 1726.06.

Any financial institution may request membership in a corporation incorporated under

Chapter 1726. of the Revised Code by making application to the board of directors

of the corporation on a form and in such manner as said board of directors may require,

and membership shall become effective upon acceptance of such application by said

board.  Upon written notice given to the corporation, one year in advance, a member may

withdraw from membership in the corporation at the expiration date of said notice. Each member of the corporation shall make loans to the corporation as and when called

upon by it to do so on such terms and other conditions as shall be approved from time

to time by the board of directors of the corporation subject to the following conditions: (A) The loan limit for any member shall be established initially by agreement between

such member and the corporation at the time such member's membership becomes effective

and may thereafter be increased by agreement between such member and the corporation,

or decreased by agreement after written notice of such decrease given to the corporation

one year in advance. (B) No loans to the corporation shall be made if immediately thereafter, the total amount

of the obligations of the corporation would exceed ten times the amount then paid

in on the outstanding shares of the corporation. (C) The total amount outstanding on loans to the corporation made by any member at any

one time, when added to the amount of the investment in the shares of the corporation

then held by such member, shall not exceed the following limits, to be determined

as of the time such member becomes a member on the basis of the audited balance sheet

of such member at the close of its fiscal year immediately preceding its application

for membership:  two per cent of the capital and surplus of commercial banks and trust

companies;  and such limits as may be approved by the board of directors of the corporation

for other financial institutions. (D) Each call made by the corporation shall be prorated among the members of the corporation

in substantially the same proportion that the adjusted loan limit of each member bears

to the aggregate of the adjusted loan limit of all members.  The adjusted loan limit of a member shall be the amount of such member's loan limit,

reduced by the balance of outstanding loans by such member to the corporation and

the investment in shares of the corporation held by such member at the time of such

call. (E) 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 negotiable

and which shall bear interest at a rate of not less than one quarter of one per cent

in excess of the rate of interest determined by the board of directors of the corporation

to be the prime rate prevailing at the date of issuance thereof on unsecured commercial

loans.