Risk weighted assets of a credit union
 18. (1) The amount of a credit union’s risk weighted assets is the amount calculated using the formula, A + B + C in which, “A” is the sum of all amounts each of which is calculated by multiplying the value of an asset of the credit union by the percentage described in subsection (2), (3), (4), (5), (6), (7) or (8), as the case may be, that applies to that asset, “B” is the amount of the credit union’s applicable operational risk as determined under subsection (9), and “C” is the amount of the credit union’s applicable interest rate risk as determined under subsection (11). O. Reg. 237/09, s. 18 (1). (2) The percentage is zero per cent for the following types of assets: 1. Cash. 2. Claims against, or guaranteed by, the Government of Canada or an agency of the Government. 3. Claims against, or guaranteed by, the government of a province or territory of Canada. 4. Claims fully secured by collateral consisting of cash or securities issued by the Government of Canada or the government of a province or territory of Canada. 5. Residential mortgage loans described in paragraph 2 of section 55. 6. The portion of a residential mortgage loan described in paragraph 3 of section 55, to the extent that the benefits payable under the policy insuring the loan have a backstop guarantee provided by the Government of Canada. 7. Mortgage-backed securities that are guaranteed by the Canada Mortgage and Housing Corporation and secured against residential mortgages. 8. Investments in bodies corporate that are accounted for in the credit union’s financial statements using the equity method. 9. Any deductions from regulatory capital, including goodwill. 10. Deposits in a league, Central 1 Credit Union or Fédération des caisses Desjardins du Québec. 11. Interest rate contracts with a league, Central 1 Credit Union, Fédération des caisses Desjardins du Québec, a financial institution or another equivalent entity approved in writing by the Chief Executive Officer.  O. Reg. 237/09, s. 18 (2); O. Reg. 68/17, s. 6; O. Reg. 181/19, s. 7 (1). (3) The percentage is 20 per cent for the following types of assets: 1. Cheques and other items in transit. 2. Claims against or guaranteed by a municipality in Canada. 3. Claims against or guaranteed by a school board, college, university, hospital or social service provider in Canada that receives, as its primary source of funding, regular government financial support. 4. Deposits in a bank or authorized foreign bank within the meaning of section 2 of the Bank Act (Canada), a corporation registered under the Loan and Trust Corporations Act or a corporation to which the Trust and Loan Companies Act (Canada) or similar legislation of another province or territory of Canada applies. 5. Commercial paper, bankers’ acceptances, bankers’ demand notes and similar instruments guaranteed by a bank or authorized foreign bank within the meaning of section 2 of the Bank Act (Canada), a corporation registered under the Loan and Trust Corporations Act or a corporation to which the Trust and Loan Companies Act (Canada) or similar legislation of another province or territory of Canada applies. 6. The value attributed to any off balance sheet exposure relating to assets of the credit union listed in paragraphs 1 to 5, as calculated in accordance with the Capital Adequacy Guideline for Ontario’s Credit Unions and Caisses Populaires.  O. Reg. 237/09, s. 18 (3). (4) The percentage is 35 per cent for the following types of assets: 1. Residential mortgage loans described in paragraph 1 of section 55 that are not 90 days or more past due. 2. Mortgage-backed securities that are fully and specifically secured by residential mortgage loans, other than mortgage-backed securities described in paragraph 7 of subsection (2). 3. The value attributed to any off balance sheet exposure relating to assets of the credit union listed in paragraphs 1 and 2, as calculated in accordance with the Capital Adequacy Guideline for Ontario’s Credit Unions and Caisses Populaires.  O. Reg. 237/09, s. 18 (4). (5) The percentage is 75 per cent for the following types of assets: 1. Personal loans. 2. Agricultural loans. 3. Commercial loans made to a person where the sum of all commercial loans made to that person and to any connected persons does not exceed the lesser of 0.035 per cent of the credit union’s total assets and $1.25 million. 4. The value attributed to any off balance sheet exposure relating to assets of the credit union listed in paragraphs 1 to 3, as calculated in accordance with the Capital Adequacy Guideline for Ontario’s Credit Unions and Caisses Populaires.  O. Reg. 237/09, s. 18 (5). (6) The percentage is 100 per cent for the following types of assets: 1. Commercial loans, other than commercial loans described in paragraph 3 of subsection (5). 2. All assets not described in subsection (2), (3), (4) or (5). 3. Residential mortgage loans described in paragraph 1 of section 55 that are 90 days or more past due. 4. The portion of a residential mortgage loan described in paragraph 3 of section 55 that does not have a backstop guarantee provided by the Government of Canada, if the insurer does not have a credit rating described in the Capital Adequacy Guideline for Ontario’s Credit Unions and Caisses Populaires. 5. The value attributed to any off balance sheet exposure relating to assets of the credit union listed in paragraphs 1, 2, 3 and 4, as calculated in accordance with the Capital Adequacy Guideline for Ontario’s Credit Unions and Caisses Populaires.  O. Reg. 237/09, s. 18 (6). (7) If a person to whom a commercial loan described in paragraph 1 of subsection (6) is made has a credit rating described in the Capital Adequacy Guideline for Ontario’s Credit Unions and Caisses Populaires, the percentage determined in accordance with that Guideline applies, instead of the percentage specified in subsection (6), in respect of the commercial loan.  O. Reg. 237/09, s. 18 (7). (8) If an insurer who insures a residential mortgage loan described in paragraph 3 of section 55 has a credit rating described in the Capital Adequacy Guideline for Ontario’s Credit Unions and Caisses Populaires, the percentage determined in accordance with that Guideline applies, instead of the percentage specified in subsection (6), in respect of the portion of the loan that does not have a backstop guarantee by the Government of Canada.  O. Reg. 237/09, s. 18 (8). (9) Unless another amount is approved by the Chief Executive Officer, a credit union’s applicable operational risk is the amount calculated using the formula, D/0.08 in which, “D” is the amount of the credit union’s capital charge for operational risk as determined under subsection (10). O. Reg. 237/09, s. 18 (9); O. Reg. 181/19, s. 7 (2). (10) A credit union’s capital charge for operational risk is the amount calculated using the formula, 0.15 × (E + F + G) / H in which, “E” is the greater of, (a) the amount of the credit union’s interest income less its interest expenses for its most recently ended financial year plus all of its other non-interest income for its most recently ended financial year, and (b) zero, “F” is the amount that would be determined under the definition of “E” if that definition applied to the credit union’s second most recently ended financial year, “G” is the amount that would be determined under the definition of “E” if that definition applied to the credit union’s third most recently ended financial year, and “H” is the greater of, (a) the number of years in which the amounts determined under the definitions of “E”, “F” and “G” exceed zero, and (b) one. O. Reg. 237/09, s. 18 (10). (11) Unless another amount is approved by the Chief Executive Officer, a credit union’s applicable interest rate risk is the amount calculated using the formula, J/0.08 in which, “J” is the amount of the credit union’s capital charge for interest rate risk as determined under subsection (12). O. Reg. 237/09, s. 18 (11); O. Reg. 181/19, s. 7 (3). (12) A credit union’s capital charge for interest rate risk is the amount calculated using the formula, K × 0.15 in which, “K” is the amount of the credit union’s exposure, determined in accordance with the techniques referred to in paragraph 2 of subsection 71 (1), to interest rate risk. O. Reg. 237/09, s. 18 (12).