12 C.F.R. § 712.2 How much can an FCU invest in or loan to CUSOs, and what parties may participate?
Title 12 - Banks and Banking
(a) Investments. An FCU's total investments in CUSOs must not exceed, in the aggregate, 1% of its paid-in and unimpaired capital and surplus as of its last calendar year-end financial report. (b) Loans. An FCU's total loans to CUSOs must not exceed, in the aggregate, 1% of its paid-in and unimpaired capital and surplus as of its last calendar year-end financial report. Loan authority is independent and separate from the 1% investment authority of subsection (a) of this section. (c) Parties. An FCU may invest in or loan to a CUSO by itself, with other credit unions, or with non-credit union parties. (d) Measurement for calculating regulatory limitation. For purposes of paragraphs (a) and (b) of this section: (1) Paid-in and unimpaired capital and surplus means shares plus post-closing, undivided earnings (this does not include regular reserves or special reserves required by law, regulation or special agreement between the credit union and its regulator or share insurer); and (2) Total investments in and total loans to CUSOs will be measured consistent with GAAP. (e) Divestiture. If the limitations in paragraph (a) of this section are reached or exceeded because of the profitability of the CUSO and the related GAAP valuation of the investment under the equity method, without an additional cash outlay by the FCU, divestiture is not required. An FCU may continue to invest up to 1% without regard to the increase in the GAAP valuation resulting from a CUSO's profitability. [63 FR 10756, Mar. 5, 1998, as amended at 64 FR 33187, June 22, 1999; 66 FR 65624, Dec. 20, 2001]
Title 12: Banks and Banking
PART 712—CREDIT UNION SERVICE ORGANIZATIONS (CUSOs)
§ 712.2 How much can an FCU invest in or loan to CUSOs, and what parties may participate?
