§53506 Investment and fiduciary requirements

Summary

Keep capital construction fund money in the bank named in the agreement, and the trustees must follow rules the Secretary sets. Normally the money can only be put into interest-paying securities the Secretary approves. With the Secretary’s OK, up to an agreed amount—but not more than 60 percent—can be invested in stock of U.S. companies that are fully listed on a national SEC-registered exchange and that a careful investor would buy for steady income and to protect the money. Preferred stock counts too if the company’s common stock meets the rules and the preferred stock otherwise qualifies. If the stock in the fund ever grows past the agreed percentage, later deposits and withdrawals must be done in a way that brings the stock’s value back down to no more than that agreed percentage.