704.9.—Liquidity management.
(3)
Keep a sufficient amount of cash and cash equivalents on hand to support its payment system obligations;
(4)
Demonstrate that the accounting classification of investment securities is consistent with its ability to meet potential liquidity demands; and
(5)
Develop a contingency funding plan that addresses alternative funding strategies in successively deteriorating liquidity scenarios. The plan must:
(i)
List all sources of liquidity, by category and amount, that are available to service an immediate outflow of funds in various liquidity scenarios;
(ii)
Analyze the impact that potential changes in fair value will have on the disposition of assets in a variety of interest rate scenarios; and
(iii)
Be reviewed by the board or an appropriate committee no less frequently than annually or as market or business conditions dictate.
(b) Borrowing limits.
A corporate credit union may borrow up to the lower of 10 times capital or 50 percent of capital and shares (excluding shares created by the use of member reverse repurchase agreements).
(1) Secured borrowings.
A corporate credit union may borrow on a secured basis for liquidity purposes, but the maturity of the borrowing may not exceed 30 days. Only a credit union with core capital in excess of five percent of its moving DANA may borrow on a secured basis for nonliquidity purposes, and the outstanding amount of secured borrowing for nonliquidity purposes may not exceed an amount equal to the difference between core capital and five percent of moving DANA.
(2) Exclusions.
CLF borrowings and borrowed funds created by the use of member reverse repurchase agreements are excluded from this limit.