Wis. Admin. Code Department of Financial Institutions DFI-CU 68.06

Current through October 28, 2024

Section DFI-CU 68.06 - Authorized activities

In addition to the investments and securities authorized elsewhere in the Wisconsin statutes or the Wisconsin administrative code, Wisconsin-chartered credit unions may contract for the purchase and sale of the following securities and enter into the following types of transactions:

(1) CASH FORWARD AGREEMENTS. A credit union may enter into a cash forward agreement to purchase or sell a security, provided that:

(a) The period from the trade date to the settlement date does not exceed 120 days;

(b) If the credit union is the purchaser, it has written cash flow projections evidencing its ability to purchase the security;

(c) If the credit union is the seller, it owns the security on the trade date; and

(d) The cash forward agreement is settled on a cash basis at the settlement date.

(2) AUTHORIZED DEPOSITORY FINANCIAL INSTITUTIONS. A credit union may invest in deposit accounts of any authorized depository financial institution, provided the aggregate investment per institution shall not exceed the greater of the deposit insurance limit under federal deposit insurance corporation or federal savings and loan insurance corporation or 1/ 2 the unimpaired balance of the credit union's regular reserve.

(3) REPURCHASE TRANSACTIONS. A credit union may enter into an investment-type repurchase transaction or a financial institution-type repurchase transaction provided the purchase price of the security obtained in the transaction is at or below the market price. A repurchase transaction not qualifying as either an investment-type or financial institution-type repurchase transaction will be considered a loan-type repurchase transaction subject to applicable Wisconsin law.

(4) REVERSE REPURCHASE TRANSACTIONS. A credit union may enter into a reverse repurchase transaction, provided that either any securities purchased with the funds obtained from the transaction or the securities collateralizing the transaction have a maturity date not later than the settlement date for the reverse repurchase transaction. A reverse repurchase transaction is a borrowing transaction subject to applicable Wisconsin law.

(5) FEDERAL FUNDS. A credit union may sell federal funds to an authorized depository financial institution, provided that the interest or other consideration received from the financial institution is at the market rate for federal funds transactions and the transaction has a maturity of one or more business days or the credit union is able to require repayment at any time.

(6) YANKEE DOLLARS. A credit union may invest in Yankee Dollar deposits in an authorized depository financial institution.

(7) EURODOLLARS. A credit union may invest in Eurodollar deposits in a branch of an authorized depository financial institution.

(8) BANKERS' ACCEPTANCES. A credit union may invest in bankers' acceptances issued by any bank which qualifies as an authorized depository financial institution.

Wis. Admin. Code Department of Financial Institutions DFI-CU 68.06

CR Register, May, 1985, No. 353, eff. 6-1-85.