1301:9-2-25 Purchase of fixed assets or purchase of real estate and/or construction of an office building.

(A) As used in this rule:

(1) “Fixed assets” means any premises, furniture, fixtures, and equipment as these terms are defined in this rule.

(2) “Furniture, fixtures, and equipment” include all office furnishings, office machines, computer hardware and software, automated terminals, heating and cooling equipment and machinery.

(3) “Premises” includes any parking lot, office, branch office, service facility as defined in 1301:9-2-01 of the Administrative Code, other facility, or real estate where the credit union transacts or will transact business.

(B) In the case of a purchase of fixed assets other than real estate, if the aggregate amount of fixed assets, including real estate, exceeds or may exceed the aggregate of fixed assets above five per cent of shares and retained earnings, or a greater amount if approved, the credit union shall submit to the superintendent prior to the purchase the following:

A letter proposing the purchase that shall address the following:

(1) An estimate of the cost of the fixed assets;

(2) Certified board resolution evidencing the directors’ decision to purchase the fixed assets;

(3) Pro forma financial statements; and

(4) Any other information the superintendent requires.

(C) A credit union may purchase and hold real estate, which is being used or is intended to be used as premises and other fixed assets in an amount aggregating not more than five percent of the shares and retained earnings of the credit union unless otherwise approved by the superintendent.

(D) In the case of a purchase of real estate, the superintendent shall be notified in writing by the credit union by filing the notice with the superintendent prior to the purchase of the real estate. The superintendent shall notify the credit union not more than thirty days after the filing of the notification to purchase the real estate if the purchase is denied, approved, or modified. If the superintendent does not respond within thirty days after receipt of the notification to purchase the real estate, it shall be deemed approved; unless, the superintendent notifies the credit union in writing within thirty days of the credit union’s request being filed that additional documentation is required. If additional documentation is required, the credit union shall have thirty days to file the additional documentation with the superintendent. If the credit union fails to file the additional documentation within that time period the superintendent shall notify the credit union that its request has been denied. If the credit union files the additional documentation within the thirty day time period, the superintendent shall notify the credit union not more than thirty days after the filing of the additional documentation whether it is denied, approved, or modified. If the superintendent does not respond within thirty days after the filing of the additional documentation, it shall be deemed approved.

(E) In the case of a purchase of real estate which does not raise the aggregate amount of fixed assets to more than five per cent of the shares and retained earnings, the credit union shall submit the following:

(1) A letter notice proposing the purchase that shall address all of the following:

(a) The circumstances surrounding the purchase;

(b) The amount of the proposed purchase;

(d) The total amount the credit union has invested in fixed assets after the purchase; and

(e) Any other information the superintendent requires.

(2) The following supporting documents:

(a) Certified board resolution evidencing the directors’ decision to purchase the real estate or other fixed assets;

(b) Pro forma financial statements; and

(c) Certification that the proposed purchase when added to the total amount of current fixed assets does not exceed five per cent of the shares and retained earnings.

(F) In the case of a purchase of real estate which raises the aggregate amount of fixed assets to more than five per cent of shares and retained earnings, or a greater amount if approved, the credit union shall submit the following:

(1) A notice proposing the purchase of real estate that shall address all of the following:

(a) All of the items listed in paragraphs (E)(1)(a) to (E)(1)(e) of this rule;

(b) An estimate of the fixed assets subsequent to the purchase and percentage of the fixed assets to the shares and retained earnings of the credit union;

(d) The proposed use of the purchase items(s); and

(e) Any other information the superintendent requires.

(2) The following supporting documents:

(a) All of the items listed in paragraphs (E)(2)(a) to (E)(2)(c) of this rule;

(b) A copy of the offer, contingent upon division approval, and acceptance of the agreement to contract for the purchase of real property intended to be used as premises; and

(G) If the purchase of real estate also includes the construction of an office building and raises the aggregate above five per cent of shares and retained earnings, the credit union shall submit, in addition to the items listed above, the following:

(1) A copy of the blueprints and architect drawings of the proposed building and estimates of the cost for such construction;

(2) Copies of all written bids by proposed general contractors, indicating the proposed cost of constructing the credit union building; and

(3) A certified copy of the resolution of the board of directors awarding the general contract.

(H) If requested by a credit union, the superintendent may approve a less restrictive fixed asset investment policy than provided in this rule. The request shall be made in writing and filed with the superintendent. It shall include a copy of the proposed fixed asset policy and a certified copy of the resolution of the board of directors accepting the policy. The superintendent shall notify the credit union after the filing of the request or policy whether it is denied, approved, or modified. If the superintendent does not respond within fifteen days after the filing of the request or policy, it shall be deemed approved; unless, the superintendent notifies the credit union in writing within fifteen days of the credit union’s request being filed that additional documentation is required. If additional documentation is required, the credit union shall have thirty days to file the additional documentation with the superintendent.

Replaces: 1301:9-2-25

Effective: 07/01/2006

R.C. 119.032 review dates: 11/15/2010

Promulgated Under: 119.03

Statutory Authority: 1733.41

Rule Amplifies: 1733.25, 1733.02, 1733.03, 1733.04, 1733.30

Prior Effective Dates: 8/3/93