§412:10-502  Permitted investments.  (a) To the extent specified herein, a credit union may invest its own assets in:

(1)  Securities and obligations of the United Statesgovernment and any agency of the United States government whose debtobligations are fully and explicitly guaranteed as to the timely payment ofprincipal and interest by the full faith and credit of the United States,including without limitation Federal Reserve Banks, the Government NationalMortgage Association, the Veterans Administration, the Federal HousingAdministration, the United States Department of Agriculture, the Export-ImportBank, the Overseas Private Investment Corporation, the Commodity CreditCorporation, and the Small Business Administration;

(2)  Bonds, notes, mortgage backed securities, andother debt obligations of the Federal Home Loan Mortgage Corporation, theFederal National Mortgage Association, and the Federal Home Loan Banks;

(3)  Securities and obligations of United Statesgovernment-sponsored agencies which are originally established or chartered bythe United States government to serve public purposes specified by the Congressbut whose debt obligations are not explicitly guaranteed by the full faith andcredit of the United States, including without limitation Banks forCooperatives, Federal Agricultural Mortgage Corporation, Federal Farm CreditBanks, Federal Intermediate Credit Banks, Federal Land Banks, ResolutionFunding Corporation, Student Loan Marketing Association, Tennessee ValleyAuthority, the United States Postal Service, and securities and obligations ofthe Federal Home Loan Mortgage Corporation, the Federal National MortgageAssociation, and the Federal Home Loan Banks that are not bonds, notes,mortgage backed securities, or other debt obligations of the Federal Home LoanMortgage Corporation, the Federal National Mortgage Association, and theFederal Home Loan Banks; provided that the total amount invested in obligationsof any one issuer shall not exceed ten per cent of the credit union's capital;and

(4)  Securities and obligations of quasi-United Statesgovernmental institutions, including without limitation the International Bankfor Reconstruction and Development (World Bank), the Inter-American DevelopmentBank, the Asian Development Bank, the African Development Bank, the EuropeanInvestment Bank, and other multilateral lending institutions or regionaldevelopment institutions in which the United States government is a shareholderor contributing member; provided that the total amount invested in any oneissuer shall not exceed ten per cent of the credit union's capital.

(b)  A credit union may invest its own assetsin bonds, securities, or similar obligations issued by this State or any countyof this State, through an appropriate agency or instrumentality.

(c)  To the extent specified herein, a creditunion may invest its own assets in bonds or similar obligations issued by anystate of the United States other than this State, the District of Columbia, orany territory or possession of the United States, by municipal governments ofsuch states, territories or possessions, or by any foreign country or politicalsubdivision of such country; provided, that:

(1)  The bond, note, or warrant has been issued incompliance with the constitution and laws of any such government;

(2)  There has been no default in payment of eitherprincipal or interest on any of the general obligations of such government fora period of five years immediately preceding the date of the investment; and

(3)  The total amount invested in such obligations ofany one issuer by a credit union shall not exceed ten per cent of the creditunion's capital.

(d)  To the extent specified, a credit unionmay invest its own assets in credit union service organizations pursuant to section412:10-202.

(e)  To the extent specified herein, a creditunion may invest its own assets in securities that are rated within the fourhighest grades by a nationally-recognized rating service and which representownership of one or more promissory notes, certificates of interest, orparticipation in such notes, or which are secured by one or more promissorynotes, certificates of interest, or participation in such notes, which notes:

(1)  Are directly secured by a first lien onresidential real estate or a residential manufactured home as defined underTitle 42 of the United States Code, whether or not such manufactured home isconsidered real or personal property under state law; and

(2)  Were originated by a credit union, insurancecompany, or similar institution which is supervised and examined by a federalor state authority, or by a mortgagee approved by the Secretary of Housing andUrban Development.  Notes secured by a lien on a manufactured home may alsooriginate from a credit union approved for insurance by the Secretary ofHousing and Urban Development.  The total amount invested in such securities bya credit union shall not exceed twenty per cent of its capital and surplus.

The term "securities" in this subsectionshall have the same meaning as given in chapter 485A.

(f)  To the extent specified herein, a creditunion may invest its own assets in mortgage related securities that:

(1)  Are offered and sold pursuant to section 4(5) ofthe Securities Act of 1933 (15 U.S.C. §77D(5)); or

(2)  Are mortgage related securities (as that term isdefined in section 3(a)(41) of the Securities Exchange Act of 1934 (15 U.S.C.§78C(a)(41)), subject to such rules as the commissioner may adopt, includingrules prescribing minimum size of issue (at the time of initial distribution)or minimum aggregate sales prices, or both.

(g)  To the extent specified herein, a creditunion may purchase, hold, convey, sell or lease real or personal property asfollows:

(1)  The real property in or on which the business of thecredit union is carried on, other space in the same property to rent as asource of income, other real property necessary to the accommodation of thecredit union's business, including but not limited to parking facilities, dataprocessing centers, and real property held for future use where the creditunion in good faith expects to utilize the property as credit union premises;provided, if the credit union ceases to use any real property and improvementsthereon for one of the foregoing purposes, it shall, within five yearsthereafter, sell the real property or cease to carry it or them as an asset;provided further, such property shall not, without the approval of thecommissioner, exceed five per cent of the credit union's capital;

(2)  Personal property used in or necessary to theaccommodation of the credit union's business, including but not limited tofurniture, fixtures, equipment, vaults and safety deposit boxes.  The creditunion's investment in furniture and fixtures shall not, without the approval ofthe commissioner, exceed five per cent of the credit union's capital;

(3)  Such real property or tangible personal propertyas may come into the credit union's possession as security for loans or in thecollection of debts; or as may be purchased by or conveyed to the credit unionin satisfaction of or on account of debts previously contracted in the courseof the credit union's business, when such property was held as security by thecredit union; and

(4)  The seller's interest under an agreement of sale,as that term is defined in sections 501-101.5 and 502-85, including withoutlimitation the reversionary interest in the real property and the right toincome under the agreement of sale, with or without recourse to the seller.

Except as otherwise authorized in this sectionany tangible personal property coming into the possession of any credit unionpursuant to paragraph (3) shall be disposed of as soon as practicable and shallnot, without the written consent of the commissioner, be considered a part ofthe assets of the credit union after the expiration of two years from the dateof acquisition.

Except as otherwise authorized in this sectionany real property acquired by a credit union pursuant to paragraph (3) shall besold or exchanged for other real property by the credit union within five yearsafter title thereto has vested in it by purchase or otherwise, or within suchfurther time as may be granted by the commissioner.

Any credit union acquiring any real property inany manner other than provided by this section shall immediately, uponreceiving notice from the commissioner, charge the same to profit and loss, orotherwise remove the same from assets, and when any loss impairs the capital ofthe credit union the impairment shall be made good in the manner provided inthis chapter. [L 1993, c 350, pt of §1; am L 1997, c 258, §19; am L 2001, c170, §13; am L 2006, c 229, §8; am L 2009, c 107, §7]