§ 19-5-15. Investment of funds — Powers.
The capital, deposits, and surplus of the credit union shall be lent to the members for the purposes and upon the security and terms as the credit committee shall approve, as authorized by a written loan policy, duly adopted by the board of directors. Funds not used in loans to members may be deposited in authorized reserve agents, or invested in the same manner as allowed by the national credit union administration rules and regulations, or in the following manner:
(1) Without limitation, in securities issued as direct obligations of the United States government and in securities guaranteed by the United States government, or an agency thereof, as to principal and interest, and in any trust or trusts established for investing directly or collectively in these securities only;
(2) An amount not exceeding one third (⅓) of the assets may be invested in:
(i) Investments other than those described above but that are legal for the investment of funds of financial institutions of this state, subject to the same limitations and restrictions by which financial institutions are governed, provided that credit unions with assets of less than ten million dollars ($10,000,000) may not invest pursuant to the “prudent person” provisions.
(ii) Deposits in financial institutions incorporated under the laws of this state or under federal law and doing business in this state or in those other institutions that may be approved by the director, or the director’s designee.
(iii) Any corporation incorporated by CUNA International, Inc. or its successor, or any associated or subsidiary corporation, for the purpose of providing investment opportunity for credit unions, or any investment or interlending program managed or sponsored by any of these corporations; provided that deposit or investment under this subsection shall be made only after the director, or the director’s designee, has approved the corporation for investment, or the investment or interlending program.
(iv) Common or preferred stocks other than those permitted above to the extent of not over five percent (5%) of the assets of investing credit unions with assets less than ten million dollars ($10,000,000) and to the extent of not over ten percent (10%) of the assets of investing credit unions with assets of ten million dollars ($10,000,000) or more; provided, however, that any of these securities shall be listed on a national stock exchange or on the National Market System of the NASDAQ stock market; that dividends have been paid by the corporation issuing the security and any predecessor corporation or corporations for at least four (4) of the last five (5) years; that the issuing corporation has, as shown by its last audited statement, total assets of at least one hundred million dollars ($100,000,000), and a stockholders’ equity of not less than forty percent (40%) of the amount of its total assets; and provided, further, that the security shall have been approved for investment by the director, or the director’s designee. The director, or the director’s designee, shall have absolute discretion in approving individual securities, provided they meet the requirements set forth above. No credit union shall invest in securities under the terms of this subdivision unless it shall have at least one million dollars ($1,000,000) in total assets as shown by its last annual report. No credit union shall invest more than one percent (1%) of its assets in any one security under the terms of this section.
(v) Funds not used in loans to members may be invested in capital shares, obligations, preferred stock issues of any agency or association organized either as a stock company, mutual association, or membership corporation, provided the membership or stockholding, as the case may be, of the agency or association is confined or restricted to credit unions or organizations of credit unions, and provided the purposes for which the agency or association is organized are designed to serve or otherwise assist credit union operations and provided the investment is authorized by law or regulation for federal credit unions, including, without limitation, an investment in credit union service organizations (“CUSO”) as described in subsection (2)(vi).
(vi) Subject to the department of business regulation and the National Credit Union Administration’s power to limit any CUSO activities or services at any time based upon supervisory, legal or safety and soundness reasons or to refuse to permit any CUSO activities or services, a credit union may invest in, loan to, and/or contract with only those CUSOs that are sufficiently bonded or insured for their specific operations and engaged in the preapproved activities and services related to the routine daily operations of credit unions. The director, or director’s designee, shall promulgate regulations delineating specific preapproved activities and criteria.
In applying the limitations and restrictions as to percentages prescribed in the law governing investments by financial institutions, percentages shall be computed based on the total assets of the credit union;
(3) Every credit union shall have the power to exercise, by its board of directors or duly authorized officers or agents, all incidental powers necessary to carry on the business of a credit union including, but not limited to, the power:
(i) To receive, upon deposit and for safekeeping, property of every description, upon terms prescribed by the credit union and to construct, own, lease, and maintain safe deposit vaults, with suitable boxes and places for the reception and deposit of the property, and lease the use of these places and boxes to individuals and corporations, upon those terms that the credit union may prescribe. The credit union shall in no case incur any liability on account of the deposit of any property so made with it, or by reason of the leasing of any place of deposit, other than that liability as the credit union shall expressly assume in each case by the terms of the contract or receipt under which it shall accept the deposit or shall have let the place of deposit;
(ii) To act as a depositary of public money or a financial agent;
(iii) To purchase, sell, and pledge eligible obligations and assets as set forth in § 19-5-15.1; and
(iv) To exercise additional powers, not inconsistent with the carrying on of a credit union business, with the approval of the director, or the director’s designee.
History of Section.P.L. 1995, ch. 82, § 43; P.L. 1999, ch. 71, § 1; P.L. 2011, ch. 347, § 2; P.L. 2011, ch. 387, § 2.
Structure Rhode Island General Laws
Title 19 - Financial Institutions
Section 19-5-1. - “Credit union” defined.
Section 19-5-2. - Incorporation.
Section 19-5-3. - Membership of credit unions.
Section 19-5-4. - Contents of bylaws.
Section 19-5-5. - Shares or deposits held jointly.
Section 19-5-6. - Demand deposits.
Section 19-5-7. - Voting rights.
Section 19-5-8. - Election and terms of directors.
Section 19-5-9. - Appointments and terms of supervisory committee members.
Section 19-5-10. - Credit committee.
Section 19-5-11. - Duplication of office prohibited — Oaths of office — Record of qualification.
Section 19-5-12. - Powers and duties of directors.
Section 19-5-13. - Loan applications.
Section 19-5-14. - Powers and duties of supervisory committee.
Section 19-5-15. - Investment of funds — Powers.
Section 19-5-15.1. - Purchase, sale and pledge of eligible obligations and assets.
Section 19-5-16. - Maximum aggregate liability of one person or company.
Section 19-5-17. - Compensation or loans to officers.
Section 19-5-18. - Expulsion of members.
Section 19-5-20. - Regular reserve.
Section 19-5-21. - Destruction of records.
Section 19-5-22. - Tax on deposits.
Section 19-5-23. - Conversion.
Section 19-5-25. - Exercise of same powers as federal credit unions.
Section 19-5-26. - Liquidity reserves.
Section 19-5-27. - Interstate credit unions.