Can a lender (in this case a credit union) place special restrictions on borrowers based on the financial condition of their employer?
So long as the condition is not illegal, the lender can require any condition or covenant on the loan. Such requirements may be that a certain debt to income level be maintained or that if they borrow elsewhere this debt can be accelerated and called due in full. An unenforceable covenant would be that you buy your stocks through the credit union. That is a nontraditional product.
Covenants are imposed routinely on commercial borrowers. The problem with imposing them is that there needs to be a process to monitor it and enforce it if it is violated.
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So long as the condition is not illegal, the lender can require any condition or covenant on the loan. Such requirements may be that a certain debt to income level be maintained or that if they borrow elsewhere this debt can be accelerated and called due in full. An unenforceable covenant would be that you buy your stocks through the credit union. That is a nontraditional product.