A credit union may enter into a repurchase transaction only if:

1. (a) A credit union purchasing the security takes physical possession of the security, or receives written confirmation of the purchase and a custodial or safekeeping receipt from a third party bank or other financial institution which identifies a specific security in its possession as owned by the credit union;
2. (b) There is no restriction on the transfer of the security purchased by the credit union; and
3. (c) The credit union is not required to deliver the identical security to the vendor upon resale. Any other repurchase agreement shall be deemed to be a loan and may be made only to members of the credit union or to other credit unions.

Authority: T.C.A. §§ 45-4-1001 and 45-4-501(3). Administrative History: Original rule filed September 11, 1980; effective October 27, 1980.