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

Universal Citation: 10 CA Code of Regs 30.102

Current through Register 2024 Notice Reg. No. 52, December 27, 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.

(b)

(1) All references in this Subchapter and the California Credit Union Law to statements of financial condition, statements of income, statements of retained earnings, statements of cash flow, and other financial statements of a credit union and all references to assets, liabilities, earnings, retained earnings, and other accounting items of a credit union mean the financial statements or accounting items prepared or determined in conformity with generally accepted accounting principles then applicable, fairly presenting in conformity with generally accepted accounting principles the matters which they purport to present, subject to any specific accounting treatment required by any provision of the California Credit Union Law, of this Subchapter, of any other applicable law, or of any regulation or order issued under the California Credit Union Law.

(2) The Commissioner may, by regulation or order, require that a financial statement or accounting item of a credit union be prepared or determined in a manner other than in conformity with generally accepted accounting principles if the Commissioner finds that such other manner is necessary or appropriate to carry out the purposes or provisions of the California Credit Union Law.

1. Change without regulatory effect renumbering and amending former section 907 to new section 30.102 filed 8-19-97 pursuant to section 100, title 1, California Code of Regulations (Register 97, No. 34).
2. Amendment of section and NOTE filed 2-27-2003; operative 3-29-2003 (Register 2003, No. 9).
3. Amendment of subsection (a)(4)(H) filed 1-6-2022; operative 4-1-2022 (Register 2022, No. 1).

Note: Authority cited: Section 14201, Financial Code. Reference: Division 5, Financial Code.

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