(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
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. &
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. §§