N.J. Admin. Code § 3:11-1.1

Current through Register Vol. 56, No. 12, June 17, 2024

Section 3:11-1.1 - Approval to exceed 15 percent limitation

(a) The following are persons which may become liable to a bank or obligations in which a bank may invest in an unlimited amount subject only to the exercise of prudent banking judgment.

1. General obligations of any State of the United States or any political subdivision thereof.

2. Such other individual obligations as the Commissioner may from time to time prescribe. A list of these individual obligations shall be kept on file in the office of the Commissioner.

i. Following is the current listing of obligations approved by the Commissioner pursuant to the provisions of this paragraph:

(1) Banks for Cooperatives;

(2) Commodity Credit Corporation;

(3) Export-Import Bank (Participation Certificates or Debentures);

(4) Farmers Home Administration;

(5) Federal Farm Credit Banks Consolidated Systemwide Bonds and Discount Notes;

(6) Federal Home Loan Bank System;

(7) Federal Intermediate Credit Banks;

(8) Federal Land Bank;

(9) Federal National Mortgage Association;

(10) Government National Mortgage Association;

(11) New Jersey Health Care Facilities Financing Authority (provided that no more than 15 percent may be invested in one obligor (individual hospital) which is responsible for the payment of the particular issue);

(12) New Jersey Economic Development Authority (provided that no more than 15 percent may be invested in bonds issued on behalf of one person. Such bonds, exclusive of any portion that may be guaranteed by the Authority, will be aggregated with any other obligations of that person at the bank for determining the 15 percent limitation. The obligations should be classified as loans and will be reported as such in the Department's examination report).

(b) The following are persons which may become liable to a bank or obligations in which a bank may invest in excess of 15 percent, but not in excess of 25 percent of the capital funds of such bank subject to the exercise of prudent banking judgment.

1. Those obligations as the Commissioner may from time-to-time prescribe. A list of these obligations shall be kept on file in the office of the Commissioner.

i. The following is the current listing of obligations subject to the provisions of this paragraph:

(1) Delaware River and Bay Authority;

(2) Delaware River Port Authority;

(3) New Jersey Housing Finance Agency;

(4) New Jersey Mortgage Finance Agency;

(5) New Jersey Sports and Exposition Authority;

(6) New Jersey Turnpike Authority;

(7) Port Authority of New York and New Jersey (secured by general reserve fund only).

(c) Prudent banking judgment requires that every bank shall maintain in its files credit information adequate to demonstrate that it has exercised prudence in making the determination to invest in a particular obligation.

(d) Request for addition of an obligation to the listings noted in (a) or (b) above may be made by any bank to the commissioner. Such request should be supported by information in sufficient detail to enable the Commissioner to make the necessary determination and should include the bank's appraisal of the information furnished.

N.J. Admin. Code § 3:11-1.1

Amended by R.1974 d.93, effective 4/16/1974.
See: 6 New Jersey Register 168(b).
Amended by R.1978 d.221, effective 7/6/1978.
See: 10 New Jersey Register 316(a).
Amended by R.1979 d.298, effective 8/6/1979.
See: 11 New Jersey Register 315(d), 11 New Jersey Register 429(c).
Amended by R.1994 d.377, effective 7/18/1994.
See: 26 New Jersey Register 1909(a), 26 New Jersey Register 2892(a).
Amended by R.2005 d.165, effective 6/6/2005.
See: 37 New Jersey Register 162(a), 37 New Jersey Register 2008(a).
In (b)1i, deleted former (3) and recodified former (4) through (8) as (3) through (7).