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Superior member service.
Committed to helping
members improve their
financial health. |
Funds Availability
Revised July 2011
FUNDS AVAILABILITY POLICY
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The policy of CESFCU is to make funds available on the same business day that the deposits are received. Every day that we are open is classified as a business day in order to determine the availability of deposits.
DELAYS IN FUNDS AVAILABILITY
In some cases, all of the funds that are deposited by check may not be available on the same business day of the deposit. Funds may not be available until the 5th business day after the day of the deposit.
If CESFCU is unable to make the funds available immediately, the member will be notified at the time of deposit. If a deposit is received by mail or a delay is determined after the member has made a deposit, a notice will be mailed to the member the same day.
Funds deposited by check may be delayed by a longer period of time for the following reasons:
1. CESFCU believes that a deposited check will not be paid.
2. Checks totaling $5000 or more on any one day.
3. A redeposited check that has been returned unpaid.
4. An emergency occurs – i.e. a failure of the computer equipment.
DELAYED FUNDS – CHECK HOLDS
If a hold is placed on deposited funds, the first $200 will be available on the 1st business day after the deposit is received. The remaining funds will be available as follows:
1. If the deposited check is a local* check, the remaining funds will be available
on the 2nd business day after the day of deposit.
2. If the check is a non-local* check, the funds will be available on the 5th
business day.
*A local check is a check drawn on an institution within NC. A non-local check is a check drawn on an institution outside NC.
FUNDS MANAGEMENT POLICY
Funds management will be handled by the manager with the oversight by the board chairman and the treasurer.
PURPOSE
Assets and liabilities will be managed to maintain a meaningful balance between member needs and sound financial management.
Financial strategies will strive to give the best loan and savings services to members while meeting the financial criteria of the NC Credit Union Division and NCUA.
SOURCE OF FUNDS
The primary source of funds is member deposits.
Borrowing will be limited to unavoidable circumstances and will be paid in full as soon as the cash flow permits. The need for borrowing will be minimized by effective planning.
A line of credit has been established with 1st Carolina Corporate CU to assist in surviving temporary liquidity situations. The board chairman, the manager and the assistant manager are all authorized to borrow funds for the benefit of the CU.
CAPITALIZATION
Sufficient retained earnings will be maintained to weather financial storms and to assure continuation of essential services.
The desired ratio of capital to assets will be set as an element of planning and budgeting. The ratio should not be less than six percent.
APPLICATION OF FUNDS
Loans to members are our primary application.
Investments will be made, according to policy, when loan demand has been met or all loanable funds have been disbursed.
Investments in fixed assets will be limited to those necessary to carry out member services with due consideration to image and quality of service.
Vault cash and demand deposit balances will be maintained at sufficient levels beyond reserve requirements to assure the ability to carry out member services.
LOANABLE FUNDS
Loanable funds are a combination of member deposit types in a mix that meets borrowing needs while also assuring an adequate earning spread.
The specific definition of loanable funds is defined as: A maximum of 100% of shares and deposits, excluding Christmas Club and Vacation Club accounts.
LIQUIDITY
Liquidity will be controlled by rates paid on deposits and rates charged on loans. Liquidity will remain within the guidelines of the NC Credit Union Division and NCUA.
INVESTMENTS
Cash in excess of that needed for loans, share withdrawals and operating purposes is to be safely invested to yield the highest return possible.
The main function of the credit union is to provide financial services for its members. This is accomplished primarily by creating assets in the form of consumer loans and issuing liabilities in the form of deposits. Since loan demand and deposit flows are uncertain, liquidity and cash management activities are required in managing theses assets and liabilities. The primary objective of the investment portfolio is to support and complement liquidity and cash management activities. The portfolio will convert the excess cash resulting from slack loan demand or deposit inflows into earnings assets. Alternatively, the portfolio will be reduced when necessary to accommodate loan requests, deposit withdrawals or other contingencies.
AUTHORIZED INVESTMENTS
The policy of CESFCU is to invest all funds with or through 1st Carolina Corporate CU.
MATURITY OF INVESTMENTS
In order to control the risk of loss resulting from increases in the level of interest rates and the forced sale of securities, the maturity of investments must be controlled. Investments will be restricted to terms of 2 years or less. When the needs of the CU are sufficiently met, longer terms may be considered.
The board recognizes that minor policy exceptions may be necessary from time to time. In such instances, the manager shall consult with the board chairman and/or treasurer and shall use their best judgment. Significant deviations from this policy should be approved by the board of directors.
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