Tenn. Comp. R. & Regs. 0180-12-.09 - REQUIRED LIQUIDITY

Current through March 20, 2022

(1) The required liquidity shall be established by the approved insuring agency or Federal Home Loan Bank Board and shall be a percentage of the liquidity base.
(2) Investments with Banks - Definition. An investment with a bank shall mean, and be limited to, a deposit of the funds of an association with a bank. It shall include a loan or other advance to a bank or an investment in bank stock. As used in these regulations, certificate of deposit shall include a time deposit and any other deposit, by whatever name it may be called, on which the association shall directly or indirectly receive any compensation whatsoever therefor in excess of the deposit itself, by way of interest, dividend or otherwise. Demand deposits shall include all other deposits, except certificates of deposit as defined above.
(3) Deposits Generally. An association shall make its deposits in a bank insured by the Federal Deposit Insurance Corporation and may purchase certificates of deposit issued by said bank as authorized under these regulations. An association depositing its funds or purchasing a certificate of deposit in any bank not maintaining its principal office in the State of Tennessee may do so only if said bank shall have been actively engaged in the banking business for a period of at least five (5) years and have a net worth of at least five million dollars ($5,000,000).
(4) Certificates of Deposit. No association shall invest in any certificates of deposit unless:
(a) The certificate of deposit, as issued, is registered in the name of the investing association.
(b) The total investment in certificates of deposit of the association in any one bank does not exceed 1% of the total assets of the bank or $100,000, whichever is greater.
(c) No association may give or receive consideration of any kind to or from a third party in connection with investment in a certificate of deposit, except reasonable and normal fees to an investment brokerage firm. No association may encumber any such certificate as collateral or otherwise with the issuing bank or any other corporation or person, except to secure an obligation of the association itself. The association shall retain in its portfolio, with respect to each investment in a certificate of deposit, evidence that the certificate is registered. If there is an encumbrance thereon permitted, the portfolio shall disclose all relevant facts with respect thereto.


Tenn. Comp. R. & Regs. 0180-12-.09
Original rule certified June 10, 1974. Repeal and new rule filed June 30, 1980; effective September 15, 1980. Transferred from the Department of Commerce and Insurance by Executive Order Number 38; effective February 11, 1983.

Authority: T.C.A. ยงยง 45-3-401 and 45-3-402.

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