SECTION 13.1-987. Restrictions on powers of corporation  

The powers of a corporation shall be subject to the following restrictions:

1. It shall not approve any application for a loan until the applicant shall have shown that he has applied to a financial institution that could lawfully lend the amount of money sought and that the financial institution has refused in writing to make the requested loan.

2. It shall not incur any secondary liability for the debts of others, but may assume primary liability therefor.

3. It shall not give security for any loan made to it unless all loans to it are secured ratably in proportion to unpaid balances due, except that it may give security or priority on loans made to it by any federal agency or instrumentality or by any agency or instrumentality of the Commonwealth of Virginia without securing all loans made to it.

Code 1950, § 13.1-145; 1960, c. 80; 1972, c. 693; 1985, c. 522.