Credit Union Investments: Other

PURPOSE: This rule lists those additional securities that are acceptable investments for credit unions (see section 370.075(1), RSMo for statutory requirements). (1) The following securities are approved for investment of Missouri credit unions: bankers’ acceptances and federal funds of insured domestic banks. No investment in any such single institution or corporation shall exceed five percent (5%) of the credit union’s shares, surplus and reserve fund, nor shall the previously mentioned investments exceed in the aggregate twenty-five percent (25%) of the credit union’s shares, surplus and reserve fund. (2) Other securities, with the approval of the director of the Division of Credit Unions, as may be permissible for investment by federally chartered credit unions. (3) Recognizing the increasing complexity and importance of safe and sound investment decisions by credit unions, investment policy is singled out for special attention. Each credit union will maintain written investment policies. The investment policies will be as detailed as is applicable to adequately address the degree of the individual credit union’s investment strategy and practice and to be in conformity with overall funds management policy. (4) Missouri credit unions may invest in Collateralized Mortgage Obligations (CMOs) rated at least AA or better by a nationally recognized rating firm. Should the rating of the instrument fall below the AA rating, the credit union will mark the investment to market and should divest itself of the security as soon as possible. The board of directors is responsible for determining the permissibility of an investment which should be supported by legal opinion from an independent source. In the aggregate, investments in CMOs shall not exceed twice the amount of unimpaired equity of a credit union (regular reserves, undivided earnings and unencumbered reserves). A credit union may request in writing an exemption from the director for the aggregate limit. (5) In addition, any state-chartered credit union may invest in any instrument that is acceptable for a federal credit union to invest in under federal rules and regulations. AUTHORITY: section 370.075(7), RSMo 2000.* This rule originally filed as 4 CSR 100-2.135. Emergency rule filed Feb. 14, 1984, effective Feb. 24, 1984, expired June 23, 1984. Original rule filed March 12, 1984, effective June 11, 1984. Amended: Filed May 4, 1987, effective July 23, 1987. Amended: Filed Oct. 12, 1988, effective Feb. 11, 1989. Moved to 20 CSR 1100-2.135, effective Aug. 28, 2006. Amended: Filed April 29, 2008, effective Nov. 30, 2008. *Original authority: 370.075(7), RSMo 1965, amended 1975, 1982, 1988.