                                 CODE OF VIRGINIA

RESTRICTIONS ON POWERS OF CORPORATION (§ 13.1-987)

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.

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