17-10a02.   Powers of members or borrowers.Building and loan associations, and other institutions eligible underthe federal home loan bank act to become members of a federal home loanbank, or to borrow money therefrom, may, when authorized by the bank, actas agents for such bank in the collection of interest, and amortization orinstallment payments, as the same become due on collateral pledged to saidbank.

      The federal home loan bank may agree with a member or borrower thatafter making current payments of interest or installments on theirindebtedness to such bank, any balance of funds so collected may be used inthe transaction of their regular or customary business. Such an arrangementbetween the federal home loan bank and a member or borrower shall not beconstrued as in any way affecting or invalidating the lien of the bank uponuncollected balances due on securities pledged as collateral.

      Any officer, director, trustee, attorney, or agent of a building andloan association, or other borrower, acting as agent for a federal homeloan bank in the collection of interest, amortization, or installmentpayments on collateral deposited with said bank, who shall apply theproceeds of such collections otherwise than as provided in the agreementwith the bank, shall be deemed guilty of embezzlement, and subject to thepunishment provided by the laws of this state for that offense.

      History:   L. 1933, ch. 143, § 2; Jan. 26.