Member loans

(1) For the purpose of financing or modernising items belonging to its fixed assets, a cooperative may, even where it does not hold a licence to conduct deposit business under the Banking Act, accept loans from its members where 1. it is agreed in the loan agreement that the loan may be used, subject to its earmarking, only for the benefit of a specific investment project of the cooperative in its fixed assets, 2. the loan sum does not, in the case of a member who is not an entrepreneur, exceed EUR 25,000, 3. the total amount of all loans granted by cooperative members for the purpose named in number 1 does not exceed EUR 2.5 million, and 4. the agreed annual nominal rate of interest does not exceed the higher of the following two values: a) 1.5 per cent, b) the market-standard issue yield for investments in the capital market in mortgage Pfandbriefe of the same maturity.
(2) The management board of the cooperative must ensure that the members of the cooperative are provided, before conclusion of the contract, with the essential information on the investment project and possible risks arising from the granting of the loan.
(3) The management board must ensure compliance with the earmarking throughout the entire term of the loan. A change of the earmarking for the benefit of another permissible investment project of the cooperative is permitted only where the member concerned consents to the change in text form after having received the essential information on the other investment project.
(4) The member is no longer bound by his or her declaration of intent directed at the conclusion of the loan agreement where he or she has revoked it towards the cooperative in text form within the time limit. The revocation need contain no statement of reasons. The revocation period is 14 days. It begins with the conclusion of the contract, where the contract contains a clear reference to the right of revocation, and otherwise at the point in time at which the member receives such a reference in text form. Where the beginning of the revocation period is disputed, the burden of proof rests on the cooperative. The right of revocation lapses at the latest twelve months after conclusion of the contract. Timely dispatch of the revocation suffices to preserve the time limit. In the event of revocation, the loan amount received is to be returned without delay. For the period between the payment of the member's loan amount to the cooperative and its repayment to the member, the cooperative must pay the agreed nominal rate of interest.