04 NCAC 06C .1301          LIQUIDITY RESERVES

(a)  Credit unions with assets of two million ($2,000,000) or more and credit unions which offer share draft accounts shall maintain a reserve of liquid assets (liquidity reserve) equal to a minimum of five percent (5 percent) of the total dollar value amount of the Credit Union's liability base.

(b)  The liability base shall consist of shares, deposits, and notes payable with a maturity of less than one year.  Specifically pledged shares or deposits or both are exempted up to the amount of the loans.

(c)  The liquidity reserve shall consist of cash, shares and deposits in the National Credit Union Administration Central Liquidity Facility, and investments with a maturity of less than one year as authorized under G.S. 54‑109.82(3)(4)(5)(9)(10) and (12) of the North Carolina Credit Union laws.  Government securities with a maturity of more than one year may be included provided securities are carried at the lower of cost or market and adjusted monthly on a consistent basis.  Documentary evidence must be kept on file supporting the adjustments for a period of 18 months.

(d)  The liquidity reserve shall be determined monthly, not later than the tenth day of each month, and shall be based on the Credit Union's liability base as the last day of business of the preceding month.

(e)  The liquidity reserve can only be used to satisfy contractual line of credit agreements, share and deposit withdrawals.  In the event the liquidity reserve falls below the required amount the Credit Union must immediately notify the Administrator of Credit Unions.  The Credit Union will have 60 days to replenish the liquidity reserve.

(f)  In any special case, the Administrator shall have the authority to require a liquidity reserve for credit unions with assets of less than two million dollars ($2,000,000) if deemed necessary to meet the liquidity needs of its creditors.


History Note:        Authority G.S. 54‑109.12; 54‑109.86(c);

Eff. December 1, 1979;

Amended Eff. February 1, 1992; March 1, 1980.