2023 Massachusetts General Laws › Part I - Administration of the Government › Title XXII - Corporations › Chapter 171 - Credit Unions › Section 67 - Investments

Section 67. A credit union may make the following investments:
(a) in the shares of the Central Credit Union Fund, Incorporated, as authorized by section three of chapter two hundred and sixteen of the acts of nineteen hundred and thirty-two;
(b) in the shares of any federally chartered corporate credit union provided, however, that not more than twenty-five percent of the assets of a credit union shall be invested in such shares;
(c) in deposits in savings banks incorporated in the commonwealth;
(d) in paid-up shares and accounts of and in cooperative banks incorporated in the commonwealth;
(e) in deposits in the Reserve Fund of the Massachusetts Credit Union Share Insurance Corporation authorized by section 8A of chapter 294 of the acts of 1961;
(f) in deposits in trust companies incorporated in the commonwealth;
(g) in deposits in banking companies incorporated in the commonwealth which are members of the Federal Deposit Insurance Corporation;
(h) in the shares of federal savings and loan associations having a usual place of business within the commonwealth to an amount not in excess of the insurance provided by the Federal Savings and Loan Insurance Corporation for a depositor in any one of such association;
(i) in deposits in national banks located in the commonwealth;
(j) in bonds or notes of the United States or of any state or subdivision thereof;
(k) obligations of other federal agencies which appear on the list of legal investments prepared pursuant to section fifteen A of chapter one hundred and sixty-seven;
(l) in repurchase agreements secured by government obligations up to one year maturity;
(m) in a common trust unit plan organized for the purchase of obligations of the United States or any subdivision thereof which appear on the list of legal investments prepared pursuant to said section fifteen A of said chapter one hundred and sixty-seven and which plan has as its custodian a banking institution authorized to accept deposits from a credit union or from a savings bank;
(n) participate in federal funds with those banking corporations which are listed as eligible for such an investment, on the list of legal investments prepared pursuant to said section fifteen A of said chapter one hundred and sixty-seven;
(o) in any obligations, bank stocks, bank holding company stocks, insurance stocks or preferred stocks of public utility companies that appear on the list of legal investments prepared pursuant to said section 15A of said chapter 167; provided, however, that: (i) not more than 10 per cent of the assets of a credit union shall be invested in bank stocks, bank holding company stocks, insurance stocks, preferred stocks of public utility companies or in all 4 of such types of stocks appearing on the list and not more than $15,000 or 2 per cent of the assets of a credit union, whichever is greater, shall be invested in the stock of any 1 such bank, bank holding company, insurance company or preferred stock of public utility companies; (ii) not more than 20 per cent of the assets of a credit union shall be invested in railroad obligations appearing on the list and not more than 1.5 per cent of the shares and deposits of any such credit union shall be invested in the obligations of any 1 operating railroad corporation; (iii) not more than 20 per cent of the assets of a credit union shall be invested in the obligations of telephone companies appearing on the list and not more than 4 per cent of the shares and deposits of such credit union shall be invested in the obligations of any 1 such company; (iv) not more than 25 per cent of the assets of a credit union shall be invested in obligations of public utility companies appearing on the list and not more than 4 per cent of the deposits of such credit union shall be invested in the obligations of any 1 such company; and (v) not more than 10 per cent of the assets of a credit union shall be invested in interest bearing obligations authorized for investment under section 15B of said chapter 167 and appearing on the list and not more than 1/2 of 1 per cent of the shares and deposits of such credit union shall be so invested in the obligations of any one obligor, but the foregoing limitations shall not apply to obligations of telephone companies, of companies engaged primarily in the distribution and sale of electricity or gas, or both, or of railroad companies other than terminal companies;
(p) in shares of one or more investment funds approved by the commissioner and appearing on the list prepared pursuant to section fifteen A of said chapter one hundred and sixty-seven; provided, however, that not more than five percent of assets of a credit union shall be invested in a single such investment fund, and not more than twenty percent of the assets of a credit union shall be invested, in the aggregate, in such investment funds;
(q) in certificates of deposit having a maturity not in excess of two years of a banking corporation; provided, however, that (i) either the banking corporation or a bank holding company as, defined by chapter one hundred and sixty-seven A which owns two-thirds of the outstanding shares of each class of such banking corporation's voting stock has paid, in each of the five years immediately preceding the date of investment dividends, in cash of not less than four percent of its common stock without having reduced the aggregate par value thereof; (ii) the banking corporation has surplus at least equal to fifty percent of its capital stock; (iii) the banking corporation has a combined total of capital stock, surplus, undivided profits, capital debentures and reserve for contingencies at least equal to six percent of its aggregate deposit liability at the end of the calendar year immediately preceding the date of investment; and (iv) the banking corporation is, if its principal office is located outside the commonwealth, a member of the federal reserve system; provided, however, that in the case of a banking corporation having a combined total of capital stock, surplus, undivided profits and reserve for contingencies equal to at least five hundred million dollars, the said combined total may be less than six percent, but not less than five percent, of its aggregate deposit liability at the end of the calendar year immediately preceding the date of investment. The limitations imposed by subclause (i) shall not apply to an aggregate investment of not in excess of one hundred thousand dollars in certificates of deposit of a banking corporation, the deposits of which banking corporation are insured by the Federal Deposit Insurance Corporation;
(r) in bankers' acceptances of the kinds and maturities made eligible by law for rediscount with federal reserve banks; provided, however, that the same are accepted by a bank, banking association or trust company incorporated under state or federal law and having its principal place of business within the commonwealth; provided, however, that not more than 10 per cent of the assets of a credit union shall be invested in such bankers' acceptances and not more than 5 per cent of the assets of such credit union shall be invested in the acceptances eligible by law for rediscount in federal reserve banks of any 1 accepting bank or trust company; and provided further, that the aggregate amount of bankers' acceptances of any 1 bank, banking association or trust company held by any such credit union shall not exceed 25 per cent of the paid-up capital and surplus of such bank, banking association or trust company;
(s) in bonds of governments or countries friendly to the United States as defined by the United States Department of State;
(t) a credit union may contribute such sums as its board of directors may determine to be reasonable (i) to any private nonprofit organization organized for the purpose of improving the social and economic conditions in the community where such credit union is established, including any educational institution, and to any educational institution located outside that community for the purpose of providing scholarships for the benefit of the residents of that community; or (ii) to any fund being raised by a committee or agency for the purpose of relieving suffering or distress resulting from disaster or other calamity occurring in any part of the commonwealth;
(u) in the capital stock of the Federal Home Loan Bank of Boston; and
(v) notwithstanding the provisions of clause (k), a credit union may invest in mortgage backed securities originated by said credit union when such securities are guaranteed by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation.
For the purposes of clauses (a) to (i), inclusive, the words ''shares, deposits and accounts'' shall include any such term share, term deposit, certificate of deposit, or term account with a maturity not to exceed three years.