Regulations governing Grandfathered Secondary Capital.

CFR · 2024-01-01 · US · Title 12

This section recodifies the requirements from 12 CFR 701.34(b), (c), and (d) that were in effect as of December 31, 2021, with minor modifications. The terminology used in this section is specific to this section. Except as provided in the next sentence, all secondary capital issued under § 701.34 of this chapter before January 1, 2022, or, in the case of a federally insured, state-chartered credit union, § 741.204(c) of this chapter, that is referred to elsewhere in this subpart as “Grandfathered Secondary Capital,” is subject to the requirements set forth in this section. Issuances of secondary capital to the (a) Secondary capital is subject to the following conditions: (1) (i) States the maximum aggregate amount of uninsured secondary capital the LICU plans to accept; (ii) Identifies the purpose for which the aggregate secondary capital will be used, and how it will be repaid; (iii) Explains how the LICU will provide for liquidity to repay secondary capital upon maturity of the accounts; (iv) Demonstrates that the planned uses of secondary capital conform to the LICU's strategic plan, business plan, and budget; and (v) Includes supporting pro forma financial statements, including any off-balance sheet items, covering a minimum of the next two years. (2) (3) (4) (5) (6) (7) (i) If not inconsistent with any agreements governing other secondary capital on deposit at the time a loss is realized, the CDCI secondary capital may be excluded from the calculation of the pro-rata lo

official document · source cfr-2024 · id 12:§ 702.414