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 it:

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 participations to an amount less than 50% of the credit union's total reserves and undivided earnings.

Source Note:The provisions of this §91.805 adopted to be effective August 14, 2000, 25 TexReg 7636.