5300 Call Report FAQs

Part 749 of the NCUA regulations requires credit unions to keep either a hard copy or an electronic copy in their permanent records.

The Profile must be certified before you can submit corrections to a 5300 Call Report.

The NCUA may assess civil money penalties for credit unions failing to submit NCUA Form 5300 Call Report on time. Call Reports are due by 11:59:59 p.m. Eastern time on the 30th of January, April, July, and October.

Beginning with the March 2022 Call Report cycle, the account description text file (AcctDesc.txt) has been modified to identify the Active and Inactive accounts but the text file will not identify a replacement account. For March 2022, that information is available in the Account Catalog. In future quarters, replacement information will be available in the 5300 Changes document.

The Account Code Catalog, available from the Call Report Modernization page of NCUA.gov, shows account changes. All account codes assigned since March 2018 have had 6 alphanumeric characters.

The commercial loan definition is consistent for all Call Report Schedules EXCEPT Schedule I. For Schedule I see the definition in 702.2: Commercial loan means any loan, line of credit, or letter of credit (including any unfunded commitments) for commercial, industrial, and professional purposes, but not for investment or personal expenditure purposes. Commercial loan excludes loans to CUSOs, first- or junior-lien residential real estate loans, and consumer loans. For the remaining Call Report schedules, see the definition in 723.2.

Unfortunately, there is no official lag in time between when a credit union reaches $10 million in assets and CECL adoption. Under the regulation (12 CFR 741.6(b)), the measurement date is based on the quarter-end date used to file the Call Report. Since the regulation requires the use of GAAP for call reporting for credit unions $10 million or greater in assets, the expectation is that the credit union will adopt CECL in its Call Report filing in the same quarter that the $10 million asset threshold is reached.

We believe credit unions that anticipate reaching the $10 million threshold should plan to implement full GAAP reporting for its Call Report. We recognize the difficulty and discomfort this change can cause. To facilitate the adoption of CECL, we created the Simplified CECL Tool, which was primarily developed for credit unions with asset sizes under $100 million. The tool and other CECL-related resources can be found here: https://ncua.gov/regulation-supervision/regulatory-compliance-resources/cecl-resources/simplified-cecl-tool.

Yes, prior webinars are available on the NCUA's YouTube channel. The two webinars directly related to the Call Report are: Preparing for the June 2022 Call Report Cycle and Call Report Changes.

"Cash on Hand" means coin, currency, and cash items on hand. It is not possible to have negative cash on hand.

Yes.

You should report these advances under "All Other Unsecured Loans/Lines of Credit." According to the Joint Guidance on Overdraft Protection Programs transmitted with Letter to Credit Unions 05-CU-03, when the credit union pays overdrafts, credit is extended. You should report overdraft balances as loans. Accordingly, you should charge off overdrafts against the allowance account.

You should report overdrawn non-commercial share accounts of all types, regardless of the existence of an overdraft protection program for share draft accounts, in Schedule A, Section 1, line 4 - All Other Unsecured Loans/Lines of Credit (Accounts 994 and 397).

Overdrawn commercial share accounts of all types that qualify as a commercial loan should be reported in Schedule A, Section 1, line 13. An overdrawn commercial share account is generally reported as an unsecured commercial loan unless the aggregate outstanding balances plus unfunded commitments less any portion secured by shares in the credit union to a borrower or an associated borrower, are equal to less than $50,000, in which case you would report it with all other overdrawn non-commercial share accounts.

A debit allowance balance does not comply with GAAP guidelines and is contrary to the concept of an allowance for losses.

No. The credit union should write down the repossessed collateral to fair value (less cost to sell) at the time of repossession. If the credit union intends to sell the repossessed collateral, you should move it out of loans and into "Foreclosed and Repossessed Assets." There should be no delinquency balance remaining on the books when moved out of loans because of the write down.

GAAP does not define "long-lived assets." Presumably, they are depreciable assets (automobiles, equipment, and real estate) with a useful life in excess of one year. An asset whose future benefit is expected for a number of years is also called long-term asset.

If they are securities, 457F investments are reported on the Statement of Financial Condition as either equity securities, trading debt securities, available-for-sale securities, or held-to-maturity securities. Additionally, 457F investments are reported in Schedule B by security type with additional valuation information included. 457F investments that are non-securities will be reported on other sections of the Statement of Financial Condition, consistent with generally accepted accounting principles. Lastly, 457F investments are also reported on Schedule B, Section 4, line 11 by type listed.

As for determining if investments are part 703 compliant, credit unions can refer the subpart A of part 703 and the FCU Act, specifically §§ 1757 (7), (8) and (15).

Report regular reserves in Undivided Earnings (account 940).

No. Non-negotiable certificates of deposit are reported in the Cash section of the Statement of Financial Condition of the Call Report in Account AS0007. Non-negotiable certificates of deposit are reported on Schedule B, Section 3, item 1 in the appropriate maturity range.

Yes, with the retired account 730C, Cash Equivalents (Investments with Original Maturities of Three Months or Less), these items are likely reported in account AS0008, Other Deposits, because "Investments with Original Maturities of Three Months or Less" should be included in the Total Cash and Other Deposits, AS0009. Also, consider whether the amounts previously reported in 730C represented Time Deposits in commercial banks, S&Ls, savings banks, natural person credit unions, or corporate credit unions with maturities of three months or less. If so, these would be reported in Time Deposits in account AS0007 and also on the Maturity Distribution Schedule, Schedule B, Section 3.

Recently the NCUA's Office of General Counsel interpreted the term "fiscal year" as used in the NCUA Board's July 2021 final rule. OGC determined there is no statutory or regulatory requirement that the term "fiscal year" as used in the CECL Transition Rule be interpreted to mean "calendar year" (or vice versa). For FCUs, CECL is implemented at the start of the financial statement reporting year that begins after December 15, 2022. For example, for a financial statement reporting year ending on September 30, 2023, CECL will be implemented on October 1, 2023. For the NCUA's CECL Transition Rule, the phase-in of the day-one effects on the net worth ratio would also start on October 1, 2023.

Federal credit unions with $10,000,000 or less in assets do not have to comply with GAAP and, therefore, will not have to comply with CECL. State chartered credit unions will need to consult with their state regulatory authority.

In Account 996 on page 3.

It would be considered as "other" if the mobile home does not qualify as real estate by the laws in your state. Once the property type, personal or real estate, is determined, based on the specifics of the transaction and the laws, then report accordingly.

Deposits where the member is an agent holding funds for another entity or entities are not distinguishable from other similar types of deposits. They should be reported as outlined in Call Report Instructions for Page 3, Shares/Deposits.

Overdraft fees are fees that are charged to a share or deposit account holder due to the processing and payment of a transaction that exceeds the account holder’s account balance and are recorded as income under GAAP in the current period.

NSF fees are fees that are charged to a share or deposit account holder for a declined transaction because the transaction would exceed the account holder’s account balance and are recorded as income under GAAP in the current period.

Any fees meeting these definitions must be reported in the appropriate field(s) in the Statement of Income and Expense section of the Call Report, regardless of the terminology used by the credit union for these types of fees (such as courtesy pay fees, bounce protection fees, among others). Also, any fees meeting the definition of an overdraft fee or NSF fee must be reported in the appropriate field(s) on the Call Report whether assessed on consumer or commercial share and deposit accounts. Fees meeting the definition of overdraft or NSF fees must be reported as such, regardless of whether the share or deposit account holder can opt in or opt out of the related service. Other types of account fees, such as minimum balance fees, account maintenance fees, return deposit fees, and excessive transaction fees are not considered overdraft or NSF fees and should not be reported on the Call Report as such. The following table shows common fee types and whether they are overdraft or NSF fees.

¹ Report any subsequent fee charged against an account with a sustained negative balance as an overdraft fee.

No, interest charged on a linked line of credit or credit card is reportable as loan interest income.

Federally insured credit unions that are $1 billion or more in assets at the end of the current reporting cycle (the quarterly cycle end dates are March 31, June 30, September 30, and December 31) are required to report overdraft fee income and NSF fee income on that cycle’s Call Report. If the credit union’s asset size falls below $1 billion in assets as of the end of a reporting cycle, the Call Report will not allow the credit union to report overdraft fee income and NSF fee income in the corresponding fields on the Call Report for that cycle.

Federally insured credit unions need to follow GAAP in recognizing income from overdraft and NSF fees, which will determine the amount to be reported on the Statement of Income and Expense section of the Call Report. Depending on the timing of a reversed fee, it may be reported in one period as income when charged and then reduce the income in subsequent period reporting once reversed.

A credit union must report gross ATM income in the income section of the income statement and ATM expenses in the expenses section of the income statement. You should not net the ATM income and expenses.

You should report interest on deposits under "Dividends on Shares." The Federal Credit Union Act authorizes low income designated FCUs to receive shares, share drafts, and share certificates from nonmembers. The FCU Act refers to these as shares, not deposits. We maintain the same nomenclature in the Call Report. (FCU Act §107(6)).

Operating Leases: Under ASC 842 (Leases), the idea of an Operating Lease remains, but the expense becomes a single amount representing the depreciation (amortization) of the Right-of-Use asset and the Interest component of the Lease liability. This single lease amount is generally recognized on a straight-line basis. If related to office occupancy, such as office space lease, the amount is usually recorded to OFFICE OCCUPANCY EXPENSE (ACCOUNT 250). If related to office operations, such as a copier, the amount is usually recorded to OFFICE OPERATIONS EXPENSE (ACCOUNT 260).

Financing Leases: Under ASC 842 (Leases), a Financing Leases continues to have two expenses. The amount representing the depreciation (amortization) of the Right-of-Use asset is reported on the line item related to its propriety. If related to office occupancy, such as an office space lease, the amount is usually recorded to OFFICE OCCUPANCY EXPENSE (ACCOUNT 250). If related to office operations, such as a copier lease, the amount is usually recorded to OFFICE OPERATIONS EXPENSE (ACCOUNT 260). The amount representing the Interest component of the Lease liability is recorded to INTEREST ON BORROWED MONEY (ACCOUNT 340).

Yes - The amount representing the depreciation (amortization) of the Right-of-Use asset is reported on the line item related to its propriety. If related to office occupancy, such as an office space lease, the amount is usually recorded to OFFICE OCCUPANCY EXPENSE (ACCOUNT 250). If related to office operations, such as a copier lease, the amount is usually recorded to OFFICE OPERATIONS EXPENSE (ACCOUNT 260).

Lines of credit and credit card loans should only be counted as a new loan in the period they are granted or renewed, not each subsequent draw on the open line of credit. Credit decisions to increase a line of credit should be treated as a new loan.

​Most sections of Schedule A have to tie back to the amounts reported on Schedule A, Section 1, page 6. Lines 9 – 11 of Section 1 of Schedule A and Section 7 of Schedule A have to tie.

The number and amount granted or purchased year-to-date should include the total number and amount plus unfunded commitments at the time of purchase or origination. Include all loan types granted, including real estate loans sold on the secondary market, loans held for sale, and participation loans in which you are participating. Lines of credit and credit card loans only count as a new loan in the period that they are granted or renewed. This does not include each subsequent draw on the open line of credit. Credit decisions to increase a line of credit should be treated as a new loan.

The balances reported in Accounts 025A1 and 025B1 on Schedule A, Section 1 must agree to the amounts reported in Accounts 025A and 025B on the Statement of Financial Condition. The balances reported in Accounts 703A, 386A, and 386B on Schedule A, Section 1, must agree to the amounts reported in Accounts RL0016, RL0017, RL0030, RL0031, RL0044 and RL0045 on Schedule A, Section 7. If loans in process are appropriately reported in the Statement of Financial Condition then they should be included in Schedule A, Sections 1 and 7.

The instructions for Schedule A, Section 1 provide clarification. For each loan category, report only loans that have an outstanding balance. Loans should be reported net of loan origination fees/costs which shall be recognized over the life of the related loan as a yield adjustment. Additionally, loan fees, certain direct loan origination costs, and purchase premiums and discounts on loans should be recognized as an adjustment to yield based on the contractual terms of the loan.

Delinquent commercial loans are reported in Schedule A, Section 2 - Delinquent Loans & Leases. Look for the part of this section specific to Commercial Loans and report delinquent Commercial Loans based on the collateral securing the loan. Only those delinquent loans included in Account 041B will be included in the delinquent loan ratio.

Outstanding loan balances of all borrowers affected by bankruptcy should be reported. Not just borrowers that filed for bankruptcy in the current year. This includes reaffirmations but excludes bankruptcies that have been dismissed by the court.

Yes, delinquency, charge offs, and recoveries are reported for Participation Loans Purchased under 701.22 and Whole or Partial Loans Purchased under 701.23 (eligible obligations). For Participation Loans, report delinquency in Account DL0142. For whole or partial loans purchased under 701.23, report delinquency in Account DL0144. Participation loans and eligible obligation delinquencies should also be reported on Page 7, Lines 1-20 based on the underlying collateral. See FAQ Topic Schedule A, Section 3 - Loan Charge Offs and Recoveries for questions related to participation loan and eligible obligations charge offs and recoveries.

You're correct. There's no item for reporting 1- to 4-family residential loans in the commercial section. That is because we separated 1- to 4-family from commercial. The only time you could potentially have 1- to 4-family loan as a commercial loan would be if you had multiple 1- to 4-family residential properties securing one loan. In that case, these would generally be reported as multifamily (Schedule A, Section 2, Item 14).

The credit union would report the participation loan charge-off or recovery in Schedule A, Section 3 - Loan Charge Offs and Recoveries based on the collateral securing the participation loan. The same amount would need to be reported in Account 550F, if a charge off, or Account 551F, if a recovery. The amounts reported in Account 550F or 551F do not affect the net charge-off ratio.

Yes, delinquency, charge offs, and recoveries are reported for Participation Loans Purchased under 701.22 and Whole or Partial Loans Purchased under 701.23 (eligible obligations). For Participation Loans, report charge offs in Account 550F and recoveries in 551F. For whole or partial loans purchased under 701.23, report charge offs in Account CH0047 and recoveries in Accounts CH0048. Participation loans and eligible obligation charge offs and recoveries should also be reported on Page 8, Lines 1-20 based on the underlying collateral. See FAQ Topic Schedule A, Section 2 - Delinquency Loans & Leases for questions related to delinquent participation loans and eligible obligations.

No. Loans that are not funded by the credit union and, at settlement, are assigned to the party advancing the funds should not be reported as loans sold. (See the NCUA rules and regulations Part 760 for a definition of table funded loan.)

Yes. You should report the real estate loans as sold with servicing retained as long as the credit union still services the loans.

If you transfer a loan with "substantial recourse" per GAAP, the credit union is required to keep the loans on its books. You would record a loan, but no contingent liability.

Yes. Credit unions using open-end loan forms should report the difference between approved limits and outstanding balances under “Other Unfunded Commitments.”

​​The number and amount sold year-to-date for real estate loans sold with servicing retained and all other loans sold with servicing retained would be for the loans sold in the current year. The number and amount sold outstanding would include loans sold in previous years that your credit union is still servicing. For amount outstanding report the outstanding balance as of the reporting date for loans the credit union sold but is still servicing.

Yes, we have received a number of questions on loans purchased under section 701.22 and 701.23. There's additional nuance to this and I would refer you to the Call Report Instructions and the NCUA regulations.

In general, participations would only apply to the purchase of a loan from the originator where there's a continuing contractual obligation between the purchaser and seller. Section 701.22 of the NCUA regulations also outline some additional seller retention requirements and minimum requirements for a participation agreement. As an example, let's assume that your credit union purchased a 90% participation interest in a loan. The originating credit union would be maintaining a 10% interest in that loan through the loan's life and the originating credit union is going to be servicing that loan. In this case you would report this as a participation purchased.

Section 701.23, would generally apply when there is not a continuing contractual obligation between the purchaser and seller.

It is possible for a single loan to be reported on multiple lines of the Loans Sold section. Loans sold must be reported on one or more lines based on the type of loan and terms of the agreement. For example, the sale of a first lien residential mortgage loan where the servicing is retained would be reported on Schedule A, Section 6, Line 3c. Do not include participation loans sold. Report All Other Loans Sold with Servicing Retained, such as auto loans, on Schedule A, Section 6, Line 3d. Do not include participation loans sold.

Report fixed-rate loans based on original maturity. Report balloons/hybrids based on the period the original interest rate remains fixed. Report adjustable-rate loans based on the adjustment period.

No. The NCUA uses account RL0050 in the net long-term assets calculation. Reporting cash flows on long-term real estate loans results in an underreporting of the credit union’s ratio of net long-term assets.

Page 11 says to report real estate loans sold on the secondary market as part of the dollar amount of loans/lines of credit granted year-to-date only. You should also report these loans on page 6, line 15, along with all other loans granted year-to-date. They do not have to be reported as part of Number or Amount of Loans Outstanding.

The parts of page 11 that have to agree to page 6 are:
Page 11, Item 4, Account RL0016, has to agree to Page 6, Item 9, Account 703A
Page 11, Item 7, Account RL0030, has to agree to Page 6, Item 10, Account 386A
Page 11, Item 10, Account RL0044, has to agree to Page 6, Item 11, Account 386B

Residential property means a house, condominium unit, cooperative unit, manufactured home, or the construction thereof, and unimproved land zoned for a 1- to 4-family residential use. Residential property excludes boats or motor homes, even if used as a primary residence, or timeshares. To be considered a 1- to 4-family residential property loan, the property securing the loan must be considered real property within the jurisdiction of the collateral.

A loan secured by a single 1- to 4-family residential property (whether or not secured by a member’s primary residence) would not be reported as an MBL or a commercial loan. It would be reported in Schedule A, Section 7 as a 1- to 4-family residential property loan, part of the non-commercial loan reporting.

However, a single loan that is secured by more than one 1- to 4-family residential properties where the outstanding balances plus unfunded commitments is equal to or greater than $50,000 should generally be reported as a member business loan AND commercial loan. (Note that loans to non-members should only be reported as commercial loans.)

The credit union would report $40,000, and would comply with all of the requirements of part 723 in making this loan because the loan caused the aggregate amount of business purpose loans to the member to exceed the $50,000 threshold in the NCUA rules and regulations §723.8.

These loans are not Commercial Loans as defined in the NCUA regulations §723.2 and as such you will report them as you would any other Non-Commercial loan based on the loan characteristics in the various schedules.

Yes. The definition of Commercial Loan and Member Business Loan are both distinct and not mutually exclusive. Attention must be paid to the specific definitions of each. Commercial Loans and Member Business Loans are defined in the NCUA rules and regulations §723.2 and §723.8 respectively. See the quick reference chart below:

No. These loans are no longer Commercial Loans. Likewise, they are no longer Member Business Loans.

No. The NCUA uses account CM0099 in the net long-term assets calculation. Reporting cash flows on long-term real estate loans results in an underreporting of the credit union's ratio of net long-term assets.

"A loan to a member secured by a SINGLE 1- to 4-family residential property used for business purposes would NOT be reported as a commercial loan. It would be reported as a 1- to 4-family residential property loan; part of the non-commercial loan reporting.

A loan to a member secured by more than one 1- to 4-family residential properties where the outstanding balance plus unfunded commitments is equal to or greater than $50,000 would be reported as a member business loan AND commercial loan whether or not the properties are used for business purposes. There is no crossover reporting for real estate loans. A loan to a non-member would NOT be reported as a member business loan and would only be reported as a commercial loan."

Yes, these are new to the Call Report. Here are some examples of what you might report on these lines:

• Federal Agency Securities/Guaranteed - Debt - FNMA Debenture, TVA Debenture.
• Federal Agency Securities/Guaranteed - Non-Debt - FNMA Pass Through.
• Federal Agency Securities/Non-Guaranteed - Debt - We do not believe these exist. This field exists in case this type of non-guaranteed debt is ever issued.
• Federal Agency Securities/Non-Guaranteed - Non- Debt - Non-guaranteed subordinated tranches issued by a GSE. For example Freddie-K subordinated tranche. Also, FNMA or FHLMC credit-risk transfer securities would be include in Federal Agency Securities/Non-Guaranteed - Non-Debt.

If a securitization, ABS with guaranteed student loan collateral should be reported in non-federal agency asset backed securities. If issued by a state corporation in a revenue bond structure, they should be reported as Securities Issued by States and Political Subdivisions in the U.S.

Yes. SimpliCDs are not direct purchases and therefore should be reported as brokered CDs.

The NCUA regulations §701.21(c)(3) requires credit unions to establish a cap on the total dollar amount of all overdrafts the credit union will honor. FFIEC guidance requires the establishment of well-defined and properly documented dollar limit decision criteria. Credit unions should report their cap amount minus any outstanding advances. (The NCUA RR §701.21(c)(3); FFIEC Joint Guidance on Overdraft Protection Programs).

The FHLB has various borrowing programs. In the case of a line-of-credit, report outstanding balances on, the Statement of Financial Condition in Account 860C - Borrowings. The maturity distribution of the draws against the line-of-credit should be reported on Schedule C, Section 5 - Borrowing Maturity Distribution in Accounts 883A, 883B1, and 883B2 - Draws Against Lines of Credit. Also, report the total credit line on Schedule B, Section 4 - Borrowing Arrangements in Accounts LQ0040, 885A3, and LQ0043.

"This line is not referring to securities owned by the credit union that have been pledged to secure credit union borrowings or available credit sources, nor is it referring to securities pledged as collateral for loans the credit union has granted to members.

Securities lending and borrowing activities are done for a fee and not to pledge as collateral for a loan. Securities Lending means lending a security to a counterparty, either directly or through an agent, and accepting collateral in return. Securities Borrowing means borrowing a security from a counterparty, either directly or through an agent."

If you do not have an outstanding balance at the FRB, then report the borrowing capacity of $45M in Account LQ0061 (Schedule C, Section 4, Item 1). If you have an outstanding balance at the FRB, report the outstanding balance in Account LQ0046 and the assets pledged to secure the outstanding balance in Account LQ0047. If the amount borrowed is not the full borrowing capacity, report the difference in LQ0061. The instructions would be the same if the assets are pledged to the Federal Home Loan Bank, except the outstanding balance would be reported in Account 885A3 and the assets pledged would be reported in Account LQ0043.

No. You should count each member only once, regardless of the number of accounts held by a particular member.

You must report funds where they reside as of the cycle end date. Report share draft subaccount balances as share drafts. Report money market subaccount balances as money market shares.

Report only the amount of uninsured shares and deposits. Do not include notes payable or other forms of borrowings.

Using one of the optional total assets elections as the denominator in the net worth calculation, may result in a higher net worth ratio. As a result, a credit union could improve its net worth position to above 7% and not be subject to PCA requirements if the standard net worth calculation is below 7%.

Report Subordinated Debt included in Net Worth in Account 925A on Schedule G. All subordinated debt, regardless of whether it is included in net worth, should also be reported on Schedule C, Section 5, Line 4, and on the Borrowings line in Account 860C on page 3.

There are four qualifying criteria. The first one is the CCULR ratio which is equal to the net worth ratio. In order to opt in to CCULR the net worth ratio must be 9% or greater. The net worth ratio will auto populate. The second criteria is the total Off-Balance Sheet Exposures. Off-Balance Sheet Exposures will be auto populated and the percentage, the ratio of those to total assets, will be auto calculated. The third criteria is the sum of Trading Assets and Trading Liabilities. That is a manual entry and the ratio of that sum to total assets is auto calculated. Finally, the fourth criteria, the sum of goodwill and other intangible assets is also a manual entry, the ratio of that sum to the total assets will be auto calculated.

There are intentional classification differences between the RBC schedule and the rest of the Call Report schedules. This is because, by regulation, some items are categorized differently for Call Report purposes and for RBC purposes. PPP loans are a good example. PPP loans are not considered commercial loans on Schedule A (Loans) of the Call Report because the definition of commercial loan in part 723 specifically excludes PPP loans. However, PPP loans are considered commercial loans on Schedule I (RBC) of the Call Report. Please review the Call Report Instructions for Consumer and Commercial loans reported on Schedule I, Part II for the proper treatment.

They are both correct. One is for investment funds that are securities and the other is for investment funds that are non-securities (other investments).

The look-through approach is an alternate way to risk-weight investment funds and separate account insurance. There are three options for the look-through approach and they are in Appendix A of part 702. All three options look-through the investment fund's actual or permissible assets to determine the risk-weight of the credit union's exposure. If using the look-through approach, a credit union should refer to Appendix A of part 702 to determine which approach to use and how to calculate the risk-weight for the investment fund.

The gross-up approach is used for senior or subordinated tranches, typically in a securitization. The gross-up approach risk-weights the underlying collateral and applies a multiplier to the risk-weighting for subordinated tranches. The multiplier is based on the ratio of the outstanding amount of the more senior tranches in the securitization versus the outstanding amount of the subordinated tranche that is owned. For example, if a credit union owns the most senior tranche of a securitization, the risk weighting for that asset would be the weighted-average risk-weighting of the underlying collateral. If a credit union owns a subordinated tranche, then the weighted-average risk-weighting of the underlying collateral is multiplied by the leverage the subordinated tranche creates versus the more senior tranches. Credit unions have the option of risk-weighting senior tranches at 100 percent or subordinated tranches at 1,250 percent. The credit union should maintain the documentation of the approach used (look-through versus gross-up) and the results obtained for review by their examiner.

Per the category 1 - zero percent risk weight section of the instructions for line 19, report available for sale gain/(loss) in Account RB0020 to receive a zero percent risk weight.