# 12 CFR § 701.20: Suretyship and guaranty

> Federal · Regulations · In force

URL: https://www.frixlaw.com/law-library/statutes/ecfr-12-701.20

## Section

- **Citation:** 12 CFR § 701.20
- **Heading:** Suretyship and guaranty
- **Jurisdiction:** Federal
- **Kind:** Regulations
- **Status:** In force
- **Text as of:** September 22, 2026
- **Source:** Publisher's official text
- **Location:** Title 12—Banks and Banking > CHAPTER VII—NATIONAL CREDIT UNION ADMINISTRATION > SUBCHAPTER A—REGULATIONS AFFECTING CREDIT UNIONS > PART 701—ORGANIZATION AND OPERATION OF FEDERAL CREDIT UNIONS

## Text

(a) Scope. This section authorizes a federal credit union to enter into a suretyship or guaranty agreement as an incidental powers activity. This section does not apply to the guaranty of public deposits or the assumption of liability for member accounts.
(b) Definitions. A suretyship binds a federal credit union with its principal to pay or perform an obligation to a third person. Under a guaranty agreement, a federal credit union agrees to satisfy the obligation of the principal only if the principal fails to pay or perform. The principal is the person primarily liable, for whose performance of his obligation the surety or guarantor has become bound.
(c) Requirements. The suretyship or guaranty agreement must be for the benefit of a principal that is a member and is subject to the following conditions:
(1) The federal credit union limits its obligations under the agreement to a fixed dollar amount and a specified duration and
(2) The federal credit union's performance under the agreement creates an authorized loan that complies with the applicable lending regulations, including the limitations on loans to one member or associated members or officials for purposes of §§ 701.21(c)(5), (d); 723.4(c).
[69 FR 8547, Feb. 25, 2004, as amended at 84 FR 10975, Mar. 25, 2019; 91 FR 50664, Aug. 6, 2026]

## Nearby sections

- [12 CFR § 700.1 § 700.1 Scope.](https://www.frixlaw.com/law-library/statutes/ecfr-12-700.1.md)
- [12 CFR § 700.2 § 700.2 Definitions.](https://www.frixlaw.com/law-library/statutes/ecfr-12-700.2.md)
- [12 CFR § 701.1 § 701.1 Federal credit union chartering, field of membership modifications, and conversions.](https://www.frixlaw.com/law-library/statutes/ecfr-12-701.1.md)
- [12 CFR § 701.2 § 701.2 Federal credit union bylaws.](https://www.frixlaw.com/law-library/statutes/ecfr-12-701.2.md)
- [12 CFR § 701.3 § 701.3 Member inspection of credit union books, records, and minutes.](https://www.frixlaw.com/law-library/statutes/ecfr-12-701.3.md)
- [12 CFR § 701.19 § 701.19 Benefits for employees of Federal credit unions.](https://www.frixlaw.com/law-library/statutes/ecfr-12-701.19.md)
- [12 CFR § 701.20 § 701.20 Suretyship and guaranty.](https://www.frixlaw.com/law-library/statutes/ecfr-12-701.20.md)
- [12 CFR § 701.21 § 701.21 Loans to members and lines of credit to members.](https://www.frixlaw.com/law-library/statutes/ecfr-12-701.21.md)
- [12 CFR § 701.22 § 701.22 Loan participations.](https://www.frixlaw.com/law-library/statutes/ecfr-12-701.22.md)
- [12 CFR § 701.23 § 701.23 Purchase, sale, and pledge of eligible obligations.](https://www.frixlaw.com/law-library/statutes/ecfr-12-701.23.md)
- [12 CFR § 701.25 § 701.25 Loans to credit unions.](https://www.frixlaw.com/law-library/statutes/ecfr-12-701.25.md)
- [12 CFR § 701.26 § 701.26 Credit union service contracts.](https://www.frixlaw.com/law-library/statutes/ecfr-12-701.26.md)
- [12 CFR § 701.30 § 701.30 Services for nonmembers within the field of membership.](https://www.frixlaw.com/law-library/statutes/ecfr-12-701.30.md)
- [12 CFR § 701.32 § 701.32 Payment on shares by public units and nonmembers.](https://www.frixlaw.com/law-library/statutes/ecfr-12-701.32.md)

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Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/ecfr-12-701.20. Check the current official text before relying on it. Not legal advice.