(1) In the context of a conflict of interest that may arise relating to a director, committee member, officer, agent or employee's personal pecuniary interests, the following definitions apply:

(a) "Determination" means those actions pertaining to the discovery of pertinent circumstances, the analyses of those circumstances, the process of reporting and presenting the matters to others, or any participation in the decision making process, relating to a director, committee member, officer, agent, or employee's pecuniary interests. These pecuniary interests may be personal, or related to organizations the director, committee member, officer, agent, or employee directly or indirectly personally owns or controls; or where the director, committee member, officer, agent, or employee exerts an otherwise controlling influence over such an organization.

(b) (i) For purposes of 12 CFR 704.12(c) (1) for situations regarding personal recusal, whose language is incorporated by reference as part of this rule; and those that include regulatory reporting, and the integrity of financial statements produced by the corporate credit union, an item is "material" that has an impact upon report form National Credit Union Administration 5300, or that is greater than or equal to $5,000. A copy of report form National Credit Union Administration 5300 may be obtained from the Division of Banking and Financial Institutions, Department of Administration, 301 South Park, P.O. Box 200546, Helena, MT 59620-0546, at cost plus postage and handling.

(ii) For the purpose of 12 CFR 704.12(c) (2) , (3) , (4) and (5) , whose language is incorporated as part of this rule, "material" shall mean an amount that exceeds 5% of the corporate credit union's capital.

(c) The Division of Banking and Financial Institutions of the Department of Administration adopts and incorporates by reference the National Credit Union Administration's Rules and Regulations in Title 12, part 704, section 12(c) of the Code of Federal Regulations.

(2) The following applies to a corporate credit union's additional rights and powers:

(a) A corporate credit union shall develop a strategic business plan that identifies how the members' needs will be met, while maintaining the credit union's safety and soundness. The plan shall cover three years from inception, with annual updates made in those years following the first year of the plan. The plan should address existing potential for growth, future staff needs, and the adequacy of the credit union's data processing. The plan should include, but not be limited to, management's intentions regarding the control and containment of risk. In addition, the plan should contain steps to achieve the credit union's goals. A management system for monitoring the plan should include an annual board review of the plan.

(b) Corporate credit unions must adopt flexible capital goals, objectives, and strategies that include a budgetary process. The Division of Banking and Financial Institutions of the Department of Administration adopts and incorporates by reference the National Credit Union Administration's Rules and Regulations in Title 12, part 704, section 5 of the Code of Federal Regulations.

(c) The corporate reserve requirements of 12 CFR 704.11 are incorporated for use as minimum standards for the purpose of this section. This includes, but is not limited to, those provisions pertaining to risk-weighted assets, and the components of risk-weighted capital. The Division of Banking and Financial Institutions of the Department of Administration adopts and incorporates by reference the National Credit Union Administration's Rules and Regulations in Title 12, part 704 of the Code of Federal Regulations, appendices "A", "B", "C" of 12 CFR 704. These appendices address risk weights and risk categories, off balance sheet risk weighting, and investments, respectively.

(d) The credit union shall develop and implement comprehensive funds management policies. Monthly monitoring reports should be prepared for management's analyses, decisions, and recommendations to the board.

(e) A corporate credit union shall develop written loan policies which address origination, underwriting, and administration of loans to credit unions, members that are not credit unions, and credit unions that are not members of the corporate credit union. The Division of Banking and Financial Institutions of the Department of Administration adopts and incorporates by reference the National Credit Union Administration's Rules and Regulations in Title 12, part 704, section 7 of the Code of Federal Regulations.

(f) The board of directors of a corporate credit union shall adopt an investment policy that will meet the needs of the corporate credit union. The policy will address risk diversification, funds management, approved investment vehicles, approval of broker/dealers, identification and authorizations for the credit union's investment officer(s) and/or its investment committee, and procedures for review and monitoring of performance. Investments permitted by this section shall generally include the issues of those agencies and government sponsored corporations and enterprises listed in the NCUA's Rules and Regulations at 12 CFR 704, Appendix "C". The Division of Banking and Financial Institutions of the Department of Administration adopts and incorporates by reference the National Credit Union Administration's Rules and Regulations in Title 12, part 704, section 6(b) (2) of the Code of Federal Regulations.

(g) The investment in credit union service organizations shall be limited in the aggregate to 15% of a corporate credit union's capital. Such investments shall be further conditioned and limited by the provisions contained in 12 CFR 704.6(b) (1) . The Division of Banking and Financial Institutions of the Department of Administration adopts and incorporates by reference the National Credit Union Administration's Rules and Regulations in Title 12, part 704, section 6(b) (1) of the Code of Federal Regulations.

(h) A corporate credit union may provide services to its members that are customarily defined in the ordinary course of business to be "correspondent services". The services provided for in 12 CFR 704.9 may also be provided to members, unless prohibited by the state of Montana.

(i) "Correspondent services" means those activities related to the business of the credit union but which may legally be provided by others. It includes, but is not necessarily limited to:

(A) investment services,

(B) safekeeping services,

(C) funds management services,

(D) payment system services,

(E) audit services,

(F) management consulting and advisory services,

(G) operational consulting and advisory services,

(H) education and training services,

(I) currency and coin supply services.

(i) A corporate credit union will be permitted to borrow up to a multiple of ten times its capital, or up to 50% of its shares and capital, whichever is greater. The Division of Banking and Financial Institutions of the Department of Administration adopts and incorporates by reference the National Credit Union Administration's Rules and Regulations in Title 12, part 704, section 8 of the Code of Federal Regulations.

(j) (i) The expanded rights and powers listed in 32-3-804 , MCA, are deemed to include those provisions of 12 CFR 704.6 (investments) , 12 CFR 704.7 (lending) , 12 CFR 704.8 (borrowing) , 12 CFR 704.9 (services) , and 12 CFR 704.12 (membership) . The Division of Banking and Financial Institutions of the Department of Administration adopts and incorporates by reference the National Credit Union Administration's Rules and Regulations in Title 12, part 704, sections 6, 7, 8, 9 and 12 of the Code of Federal Regulations.

(ii) The Division of Banking and Financial Institutions of the Department of Administration adopts and incorporates by reference the following National Credit Union Administration's Rules: 12 CFR 704.1 (regarding authorities) , 12 CFR 704.2 (certain definitions which does not include the definition of "material" defined herein) , 12 CFR 704.5 (capital goals, objectives and strategies) , 12 CFR 704.9 (services) , 12 CFR 704.10 (fixed assets) , 12 CFR 704.11 (corporate reserves) , 12 CFR 704.12 (representation) , 12 CFR 704.13 (annual audit) , and 12 CFR 704.14 (contracts and written agreements) .

(3) A copy of the National Credit Union Administration's Rules and Regulations may be obtained from the Division of Banking and Financial Institutions, Department of Administration, 301 South Park, P.O. Box 200546, Helena, MT 59620-0546.