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The Florida Senate

2009 Florida Statutes

Investment powers and limitations.
Section 657.042, Florida Statutes 2009

657.042  Investment powers and limitations.--A credit union may invest its funds subject to the following definitions, restrictions, and limitations:

(1)  INVESTMENTS NOT SUBJECT TO LIMITATIONS.--There is no limitation with respect to the capital of the investing credit union on the following investments:

(a)  Direct obligations of the United States Government.

(b)  Obligations of agencies created by the United States Congress and authorized thereby to issue securities or evidences of indebtedness, regardless of guarantee of repayment by the United States Government.

(c)  Public housing authority obligations.

(d)  General obligations of the states of the United States and of the political subdivisions and municipalities thereof.

(e)  Obligations issued by the State Board of Education under authority of the Constitution or applicable statutes.

(f)  Tax anticipation certificates or warrants of counties or municipalities having maturities not exceeding 1 year.

(g)  The assets of liquidating credit unions in this state, provided such assets are otherwise eligible for investment by the acquiring credit union.

(h)  The shares and deposit accounts of corporate credit unions and any other fund established by this state or by the Federal Government for the purpose of maintaining liquidity in credit unions; however, such investments shall not exceed the amount required for the purpose of meeting the daily needs of the investing credit union for operating liquidity.

(i)  Stock of the Federal National Mortgage Association, Federal Home Loan Bank, or any other similar entity designated by the office, designed to promote investment in residential mortgages, which may be purchased and retained as required in connection with mortgage transactions with the association or entity.

(2)  INVESTMENTS SUBJECT TO LIMITATION OF 25 PERCENT OF CAPITAL OF THE CREDIT UNION.--Up to 25 percent of the capital of the credit union may be invested in:

(a)  The shares or deposit accounts in any one corporate credit union or other insured financial depository institution. The credit union may exceed the 25-percent investment limitation in the corporate credit union, subject to the prior written approval of the office.

(b)  Federal funds, daily; however, a credit union may not sell at any one time federal funds to any individual institution in an amount exceeding 100 percent of the equity of the selling credit union.

(c)  Bankers' acceptances that are eligible for purchase by Federal Reserve Banks.


(a)  Up to 2 percent of the capital of the credit union may be invested in the capital shares, obligations, or preferred stock issues of any agency or association, or membership association, provided the membership or stockholdings, as the case may be, of such agency or association are primarily confined or restricted to credit unions or organizations of credit unions and provided the purposes for which such agency or association is organized are designed primarily to service or otherwise assist credit union operations.

(b)  Commercial paper and bonds of any corporation within the United States which have a fixed maturity, as provided in subsection (7), except that the total investment in all such paper and bonds may not exceed 10 percent of the capital of the credit union.

(4)  INVESTMENT SUBJECT TO LIMITATION OF ONE PERCENT OF CAPITAL OF THE CREDIT UNION.--Up to 1 percent of the capital of the credit union may be invested in any of the following:

(a)  Corporate obligations of any one corporation which is an affiliate or subsidiary of the credit union or a service corporation, except that the total investment in all such corporate obligations shall not exceed 10 percent of the capital of the credit union.

(b)  Any capital participation instrument or evidence of indebtedness issued by the Florida Black Business Investment Board pursuant to the Florida Small and Minority Business Assistance Act.


(a)  Up to 5 percent of the capital of the credit union may be invested in real estate and improvements thereon, furniture, fixtures, and equipment utilized or to be utilized by the credit union for the transaction of business.

(b)  The limitations provided by this subsection may be exceeded with the prior written approval of the office. The office shall grant such approval if it is satisfied that:

1.  The proposed investment is necessary.

2.  The amount thereof is commensurate with the size and needs of the credit union.

3.  The investment will be beneficial to the members.

4.  A reasonable plan is developed to reduce the investment to statutory limits.

(6)  INVESTMENTS SUBJECT TO APPROVAL.--A credit union may invest its funds in such other investments, including the capital stock of other financial institutions, as the commission or office approves by rule or order.


(a)  None of the bonds or other obligations described in this section shall be eligible for investment by credit unions in any amount unless current as to all payments of principal and interest and unless rated in one of the four highest classifications, or, in the case of commercial paper, unless it is of prime quality and of the highest letter and numerical rating, as established by a nationally recognized investment rating service, or any comparable rating as determined by the office.

(b)  With prior approval of the office, any investment permitted in this section may also be made indirectly by investment in a trust or mutual, the investments of which are limited as set forth in this section, provided that the credit union must maintain a current file on each investment which contains sufficient information to determine whether the investment complies with the requirements of this section. If the investment fails to comply with the requirements of this section, the credit union must divest itself of its investment, unless otherwise approved by the office.

History.--ss. 1, 6, ch. 80-258; ss. 2, 3, ch. 81-318; ss. 8, 46, ch. 82-214; ss. 15, 58, ch. 85-82; ss. 17, 32, ch. 85-104; s. 1, ch. 91-307; ss. 1, 93, ch. 92-303; s. 28, ch. 94-322; s. 1751, ch. 2003-261; s. 22, ch. 2005-181; s. 22, ch. 2007-157.