1. (a) A credit union may purchase a participation interest in a non-member loan from a corporation, credit organization, or financial organization, as permitted by §124.351(a)(8) of the Act, provided the credit union:

   1. (1) is specifically empowered to purchase such investments in the board's written investment policy;
   2. (2) does not obtain an interest greater than 90% of the face amount of each individual loan, if the borrower is not a member of the credit union or a member of another participating credit union;
   3. (3) uses the same underwriting standards for loan participation investments as it does for loans originated by the credit union; and
   4. (4) limits its aggregate investment in loan participation investments to an amount no greater than 50% of the credit union's net worth.
2. (b) Financial Reporting. A participation interest in a non-member loan purchased under this section shall be reported in accordance with generally accepted accounting principles.
3. (c) Other Requirements. A credit union purchasing a loan participation investment must also comply with applicable requirements contained within Part 741 of the National Credit Union Administration Rules and Regulations.

Source Note:The provisions of this §91.805 adopted to be effective August 14, 2000, 25 TexReg 7636; amended to be effective November 11, 2007, 32 TexReg 7923; amended to be effective November 13, 2011, 36 TexReg 7544.