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12 C.F.R. § 742.4   RegFlex Relief.

Title 12 - Banks and Banking

Title 12: Banks and Banking
PART 742—REGULATORY FLEXIBILITY PROGRAM

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§ 742.4   RegFlex Relief.

(a) Exemptions. RegFlex credit unions are exempt from the following regulatory restrictions:

(1) Charitable contributions. Section 701.25 of this chapter concerning charitable contributions;

(2) Nonmember deposits. Section 701.32(b) and (c) of this chapter concerning the maximum amount of non-member deposits a credit union can accept; and

(3) Fixed assets. Section 701.36(a), (b) and (c) of this chapter concerning the maximum amount of fixed assets a credit union can acquire;

(4) Member business loans. Section 723.7(b) of this chapter concerning the personal liability and guarantee of principals for member business loans.

(5) Discretionary control of investments. Section 703.5(b)(1)(ii) and (2) of this chapter concerning the maximum amount of investments over which discretionary control can be delegated;

(6) “Stress testing” of investments. Section 703.12(c) of this chapter concerning “stress testing” of securities holdings to assess the impact of an extreme interest rate shift;

(7) Zero-coupon securities. Section 703.16(b) of this chapter concerning the maximum maturity length of zero-coupon securities;

(8) Borrowing repurchase transactions. Section 703.13(d)(3) of this chapter, concerning the maturity of investments a credit union purchases with the proceeds received in a borrowing repurchase transaction, provided the value of the investments that mature later than the borrowing repurchase transaction does not exceed 100 percent of the federal credit union's net worth;

(9) Commercial mortgage related security. Section 703.16(d) of this chapter prohibiting the purchase of a commercial mortgage related security of an issuer other than a government-sponsored enterprise enumerated in 12 U.S.C. 1757(7)(E), provided:

(i) The security is rated in one of the two highest rating categories by at least one nationally-recognized statistical rating organization;

(ii) The security meets the definition of mortgage related security as defined in 15 U.S.C. 78c(a)(41) and the definition of commercial mortgage related security as defined in §703.2 of this chapter;

(iii) The security's underlying pool of loans contains more than 50 loans with no one loan representing more than 10 percent of the pool; and

(iv) The aggregate total of commercial mortgage related securities purchased by the Federal credit union does not exceed 50 percent of its net worth.

(b) Purchase of obligations from a FICU. A RegFlex credit union is authorized to purchase and hold the following obligations, provided that it would be empowered to grant them:

(1) Eligible obligations. Eligible obligations pursuant to §701.23(b)(1)(i) of this chapter without regard to whether they are obligations of its members, provided they are purchased from a federally-insured credit union only;

(2) Student loans. Student loans pursuant to §701.23(b)(1)(iii) of this chapter, provided they are purchased from a federally-insured credit union only;

(3) Mortgage loans. Real-state secured loans pursuant to 701.23(b)(1)(iv) of this chapter, provided they are purchased from a federally-insured credit union only;

(4) Eligible obligations of a liquidating credit union. Eligible obligations of a liquidating credit union pursuant to §701.23(b)(1)(ii) of this chapter without regard to whether they are obligations of the liquidating credit union's members, provided that such purchases do not exceed 5 percent (5%) of the unimpaired capital and surplus of the purchasing credit union.

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