California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 30 - Credit Unions › Article 1 - General Provisions › Section 30.102 - Definitions

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The terms
				  defined in the California Credit Union Law when used in this Subchapter shall
				  have the meanings set forth in that law. In addition, the following definitions
				  shall apply in this Subchapter:
(1)
				  "Management personnel" includes the Chief Executive Officer, the Assistant
				  Chief Executive Officer, the Chief Financial Officer, the Operations Manager,
				  and the Credit Manager, and any individual occupying a similar status or
				  performing similar functions.
(2)
				  "Gross income" does not include non-operating gains or losses, recoveries or
				  donated funds.
(3) "Unimpaired
				  capital and surplus" means the total of shares, undivided earnings, and
				  appropriated undivided earnings, net of any income or loss for the accounting
				  period, and does not include the regular reserve or unrealized gains or losses
				  for changes in market values of available-for-sale investments.
(4) "Risk assets" means all assets except the
				  following:
(A) Cash on hand.
(B) Deposits and/or shares in federally or
				  state-insured banks or savings and loan associations, or federally or privately
				  insured credit unions that have a remaining maturity of 5 years or
				  less.
(C) Assets that have a
				  remaining maturity of 5 years or less and are insured by, fully guaranteed as
				  to principal and interest by, or due from the U.S. Government, its agencies,
				  the Federal National Mortgage Association, Federal Home Loan Mortgage
				  Corporation, or the Government National Mortgage Association. Collateralized
				  mortgage obligations that are comprised of government guaranteed mortgage loans
				  shall be included in this asset category.
(D) Loans to other credit unions that have a
				  remaining maturity of 5 years or less.
(E) Student loans insured under the
				  provisions of title IV, Part B of the Higher Education Act of 1965
				  (20 U.S.C.
				  1071, et seq.) or similar state insurance
				  programs that have a remaining maturity of 5 years or less.
(F) Loans that have a remaining maturity of 5
				  years or less and are fully or partially insured or guaranteed by the Federal
				  or a state government or any agency of either. A loan which is partially
				  insured or guaranteed by the Federal or a state government, or agency of
				  either, shall be excepted pursuant to this Subdivision only to the extent that
				  the loan is so insured or guaranteed.
(G) Shares or deposits in a corporate credit
				  union that have a remaining maturity of 5 years or less, other than shares or
				  deposits representing contributions to the membership capital as defined in 12
				  C.F.R. Part 704 . A corporate credit union is a credit union that:
1. Is operated primarily for the purpose of
				  serving other credit unions;
2. Is
				  designated by the National Credit Union Administration as a corporate credit
				  union; and,
3. Limits natural
				  person members to the minimum required by state or federal law to charter and
				  operate the credit union.
(H) Mutual funds or trusts which are
				  authorized by Section
				  30.300(b) and are
				  either carried at the lower of cost or market, or are marked to market value
				  monthly.
(I) Prepaid
				  expenses.
(J) Accrued interest on
				  non-risk investments.
(K) Loans
				  fully secured by a pledge of shares in the lending credit union, equal to and
				  maintained to at least the amount of the loan outstanding.
(L) Loans which are purchased from
				  liquidating credit unions and guaranteed by the National Credit Union
				  Administration.
(M) National Credit
				  Union Share Insurance Fund Guaranty Accounts established with the authorization
				  of the National Credit Union Administration under the authority of Section
				  208(a)(1) of the
				  Federal Credit Union Act (12
				  U.S.C. §
													1788(a)(1)).
(N) Investments in shares of the National
				  Credit Union Administration Central Liquidity Facility.
(O) Assets included in Subparagraphs (B),
				  (C), (D), (E), (F), and (G) with maturities greater than 5 years are exempt
				  from risk assets if the asset is being carried on the credit union's records at
				  the lower of cost or market, or are being marked to market value
				  monthly.
(P) Assets included in
				  Subparagraphs (B), (C), (D), (E), (F), and (G), with remaining maturities
				  greater than 5 years are exempt from risk assets provided they meet the
				  following criteria, irrespective of whether or not the asset is being carried
				  on the credit union's records at the lower of cost or market, or are being
				  marked to market value monthly:
1. The
				  interest rate is reset at least annually.
2. The interest rate of the instrument is
				  less than the maximum allowable interest rate for the instrument on the date of
				  the required reserve transfer.
3.
				  The interest rate of the instrument varies directly (not inversely) with the
				  index upon which it is based and is not reset as a multiple of the change in
				  the related index.
(Q)
				  Fixed assets as authorized by Financial Code Sections
				  14402 and
				  14403.
(R) Deposit in the National Credit Union
				  Share Insurance Fund representing a federally insured credit union's
				  capitalization account balance of one percent of insured shares.
(S) Accounts deposited by a credit union with
				  the insurer or guarantor that insures or guarantees the credit union's share
				  accounts in accordance with Section
				  14858 of
				  the Financial Code.