CT SB00980

Repeals and replaces Section 36a-275 of the general statutes, effective October 1, 2013, to expand debt securities investment options for Connecticut banks.

Permits Connecticut banks to invest in residential mortgage pass-through securities issued or guaranteed by the Federal National Mortgage Association or Federal Home Loan Mortgage Corporation when operating under Federal Housing Finance Agency conservatorship or receivership.

Allows Connecticut banks to invest in other residential mortgage-backed securities including collateralized mortgage obligations and real estate mortgage investment conduits issued or guaranteed by Fannie Mae or Freddie Mac under Federal Housing Finance Agency conservatorship or receivership.

Maintains existing investment limits: debt securities and mutual funds of any single issuer may not exceed 25% of the bank's total equity capital and reserves for loan and lease losses, and total holdings may not exceed 25% of the bank's assets.

Requires qualifying debt securities and mutual funds to be rated in the three highest rating categories by a recognized rating service or determined by the bank's governing board to be a prudent investment.