Permissible Investments for Federal Credit Unions
Posted by Steve Van Beek
Last Thursday, NCUA issued Letter to Federal Credit Unions 09-FCU-01 which details federal credit unions (FCUs) ability to invest in unsecured debt obligations guaranteed under the Temporary Corporate Credit Union Liquidity Guarantee Program (TCCULGP) and senior unsecured debt guaranteed under the FDIC Temporary Liquidity Guarantee Program (TLGP). The letter indicates FCUs are allowed to invest if certain conditions are met.
The letter provides a brief overview and background of the programs and when FCUs can invest in those programs. The letter emphasizes that FCUs should confirm the obligations are guaranteed through maturity in order for them to be permissible purposes.
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In case you were wondering, this Letter only applies to federal credit unions. NCUA, as it did in this case, sometimes analyzes issues solely from the FCU perspective as they are the primary regulator of FCUs. Whether these investments are permissible for state-chartered credit unions will depend on other factors determined by its state laws and primary regulator.Â