Title 12

SECTION 702.104

702.104 Risk portfolios defined.

§ 702.104 Risk portfolios defined. Link to an amendment published at 86 FR 11073, Feb. 23, 2021.

A risk portfolio is a portfolio of assets, liabilities, or contingent liabilities as specified below, each expressed as a percentage of the credit union's quarter-end total assets reflected in its most recent Call Report, rounded to two decimal places (Table 2):

(a) Long-term real estate loans. Total real estate loans and real estate lines of credit outstanding, exclusive of those outstanding that will contractually refinance, reprice or mature within the next five (5) years, and exclusive of all member business loans (as defined in 12 CFR 723.8(b) or as approved under 12 CFR 723.10);

(b) Member business loans outstanding. All member business loans as defined in 12 CFR 723.8(b) or as approved under 12 CFR 723.10;

(c) Investments. Investments as defined by 12 CFR 703.2 or applicable State law, including investments in CUSOs (as defined by § 702.2(d));

(d) Low-risk assets. Cash on hand (e.g., coin and currency, including vault, ATM and teller cash), the NCUSIF deposit, debt instruments unconditionally guaranteed by the National Credit Union Administration; and covered loans issued under the Small Business Administration's Paycheck Protection Program, 15 U.S.C. 636(a)(36).

(e) Average-risk assets. One hundred percent (100%) of total assets minus the sum of the risk portfolios in paragraphs (a) through (d) of this section;

(f) Loans sold with recourse. Outstanding balance of loans sold or swapped with recourse, excluding loans sold to the secondary mortgage market that have representations and warranties consistent with those customarily required by the U.S. Government and government sponsored enterprises;

(g) Unused member business loan commitments. Unused commitments for member business loans as defined in 12 CFR 723.8(b) or as approved under 12 CFR 723.10; and

(h) Allowance. The Allowance for Loan and Lease Losses not to exceed the equivalent of one and one-half percent (1.5%) of total loans outstanding.

[65 FR 44966, July 20, 2000, as amended at 67 FR 71088, Nov. 29, 2002; 75 FR 66300, Oct. 28, 2010; 78 FR 32544, May 31, 2013; 83 FR 25882, June 5, 2018; 85 FR 23216, Apr. 27, 2020]

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