§412:10-403  Interest rates.  (a)  Theinterest rates on loans shall be determined by the board of directors, subjectto the following:

(1)  The interest rate on any credit union loanhereafter made shall not exceed eighteen per cent per year on the unpaidbalance, may be fixed or variable, and may provide for a balloon payment.  Avariable rate may be based upon an index, the prime rate, or some otherobjective factor, so that the interest rate will increase or decrease accordingto such factor.

(2)  The commissioner, without regard to chapter 91,may establish an interest rate ceiling exceeding the eighteen per cent per yearfor periods not to exceed eighteen months, if the commissioner determines thatprevailing interest rate levels threaten the safety and soundness of creditunions.

(b)  The board may also authorize any refund ofinterest on such classes of loans and under such conditions as it prescribes.

(c)  If a greater rate of interest than thatpermitted under this article is contracted for in any loan under this article,the loan shall not, by reason thereof, be void.  But, if in any action on theloan, proof is made that a greater rate of interest than that permitted by lawhas been directly or indirectly contracted for, the credit union shall onlyrecover the amount actually received by the borrower in cash, credit or theequivalent thereof plus the charges, if any, which were properly charged to theborrower and which have not been deducted from the principal amount of thecontract or otherwise paid by the borrower.  The borrower shall only recovercosts.  If interest has been paid, judgment shall be for the recoverable amountless the amount of interest paid.  Sections 478-5 and 478-6 shall not apply toloans made under this article by credit unions. [L 1993, c 350, pt of §1]