KRS 272A.6-040: Security interest and set-off.

(1) A member or transferee may create an enforceable security interest in its financial

rights in a limited cooperative association.

(2) Unless the organic rules otherwise provide, a member may not create an enforceable

security interest in the member's govern ance rights in a limited cooperative

association.

(3) The organic rules may provide that a limited cooperative association has a security

interest in the financial rights of a member to secure payment of any indebtedness or

other obligation of the member to the association. A security interest provided for in

the organic rules is enforceable under, and governed by, Article 9 of KRS Chapter

355.

(4) Unless the organic rules otherwise provide, a member may not compel the limited

cooperative association to off set financial rights against any indebtedness or

obligation owed to the association.