12 C.F.R. § 702.107 Alternative components for standard calculation.
Title 12 - Banks and Banking
A credit union may substitute one or more alternative components below, in place of the corresponding standard components in §702.106 above, when any alternative component amount, expressed as a percentage of the credit union's quarter-end total assets as reflected in its most recent Call Report, rounded to two decimal places, is smaller (Table 5): (a) Long-term real estate loans. The sum of: (1) Non-callable. Non-callable long-term real estate loans as follows: (i) Eight percent (8%) of the amount of such loans with a remaining maturity of greater than 5 years, but less than or equal to 12 years; (ii) Twelve percent (12%) of the amount of such loans with a remaining maturity of greater than 12 years, but less than or equal to 20 years; and (iii) Fourteen percent (14%) of the amount of such loans with a remaining maturity greater than 20 years; (2) Callable. Long-term real estate loans callable in 5 years or less as follows: (i) Six percent (6%) of the amount of such loans with a documented call provision of 5 years or less and with a remaining maturity of greater than 5 years, but less than or equal to 12 years; (ii) Ten percent (10%) of the amount of such loans with a documented call provision of 5 years or less and with a remaining maturity of greater than 12 years, but less than or equal to 20 years; and (iii) Twelve percent (12%) of the amount of such loans with a documented call provision of 5 years or less and with a remaining maturity of greater than 20 years; (b) Member business loans outstanding. The sum of: (1) Fixed rate. Fixed-rate member business loans outstanding as follows: (i) Six percent (6%) of the amount of such loans with a remaining maturity of 3 or fewer years; (ii) Nine percent (9%) of the amount of such loans with a remaining maturity greater than 3 years, but less than or equal to 5 years; (iii) Twelve percent (12%) of the amount of such loans with a remaining maturity greater than 5 years, but less than or equal to 7 years; (iv) Fourteen percent (14%) of the amount of such loans with a remaining maturity greater than 7 years, but less than or equal to 12 years; and (v) Sixteen percent (16%) of the amount of such loans with a remaining maturity greater than 12 years; and (2) Variable-rate. Variable-rate member business loans outstanding as follows: (i) Six percent (6%) of the amount of such loans with a remaining maturity of 3 or fewer years; (ii) Eight percent (8%) of the amount of such loans with a remaining maturity greater than 3 years, but less than or equal to 5 years; (iii) Ten percent (10%) of the amount of such loans with a remaining maturity greater than 5 years, but less than or equal to 7 years; (iv) Twelve percent (12%) of the amount of such loans with a remaining maturity greater than 7 years, but less than or equal to 12 years; and (v) Fourteen percent (14%) of the amount of such loans with a remaining maturity greater than 12 years. (c) Investments. The sum of: (1) Three percent (3%) of the amount of investments with a weighted-average life (as specified in §702.105 above) of one (1) year or less; (2) Six percent (6%) of the amount of investments with a weighted-average life greater than one (1) year, but less than or equal to three (3) years; (3) Eight percent (8%) of the amount of investments with a weighted-average life greater than three (3) years, but less than or equal to five (5) years; (4) Twelve percent (12%) of the amount of investments with a weighted-average life greater than five (5) years, but less than or equal to seven (7) years; (5) Sixteen percent (16%) of the amount of investments with a weighted-average life greater than seven (7) years, but less than or equal to ten (10) years; and (6) Twenty percent (20%) of the amount of investments with a weighted-average life greater than ten (10) years. (d) Loans sold with recourse. The alternative component is the sum of: (1) Six percent (6%) of the amount of loans sold with contractual recourse obligations of six percent (6%) or greater; and (2) The weighted average recourse percent of the amount of loans sold with contractual recourse obligations of less than six percent (6%), as computed by the credit union.
Table 5—§702.107 Alternative Components for Standard Calculation [65 FR 44966, July 20, 2000, as amended at 67 FR 71088, Nov. 29, 2002]
Title 12: Banks and Banking
PART 702—PROMPT CORRECTIVE ACTION
Subpart A—Net Worth Classification
§ 702.107 Alternative components for standard calculation.