702.106—Standard calculation of risk-based net worth requirement.
A credit union's risk-based net worth requirement is the aggregate of the following standard component amounts, each expressed as a percentage of the credit union's quarter-end total assets as reflected in its most recent Call Report, rounded to two decimal places (Table 4):
(1)
Six percent (6%) of the amount of long-term real estate loans less than or equal to twenty-five percent (25%) of total assets; and
(25%) of total assets;
(1)
Six percent (6%) of the amount of member business loans outstanding less than or equal to fifteen percent (15%) of total assets;
(2)
Eight percent (8%) of the amount of member business loans outstanding greater than fifteen percent (15%), but less than or equal to twenty-five percent (25%), of total assets; and
(1)
Three percent (3%) of the amount of investments with a weighted-average life (as specified in § 702.105 above) of one (1) year or less;
(2)
Six percent (6%) of the amount of investments with a weighted-average life greater than one (1) year, but less than or equal to three (3) years;
(3)
Twelve percent (12%) of the amount of investments with a weighted-average life greater than three (3) years, but less than or equal to ten (10) years; and
(4)
Twenty percent (20%) of the amount of investments with a weighted-average life greater than ten (10) years;
(g) Unused member business loan commitments.
Six percent (6%) of the entire portfolio of unused member business loan commitments; and
(h) Allowance.
Negative one hundred percent (−100%) of the balance of the Allowance for Loan and Lease Losses account, not to exceed the equivalent of one and one-half percent (1.5%) of total loans outstanding.
Code of Federal Regulations
Code of Federal Regulations
521