NCUA Board Approves Rare Investment Pilot Program

Credit Union Regulatory Guidance Including: NCUA, CFPB, FDIC, OCC, FFIEC

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This episode covers N C U A Board’s Approval of a Non-Registered Investment Fund Pilot Program

The following is an audio version of that press release. This podcast is educational and is not legal advice. We are sponsored by Credit Union Exam Solutions Incorporated, whose team has over two hundred and Forty years of National Credit Union Administration experience. We assist our clients with N C U A so they save time and money. If you are worried about a recent, upcoming or in process N C U A examination, reach out to learn how they can assist at Mark Treichel DOT COM. Also check out our other podcast called With Flying Colors where we provide tips on how to achieve success with N C U A.

And now the press release.

NCUA Board Approves Non-Registered Investment Fund Pilot Program

On December 30th The National Credit Union Administration Board approved, by notation vote, an investment pilot program authorized under section 703 point 19 C of the N C U A’s regulations.

The N C U A will permit up to 30 complex federal credit unions to engage in investment activities prohibited under part 703 but permitted by the Federal Credit Union Act. Note A credit union is considered "complex" if its total assets exceed a specific threshold set by the N C U A. As of today,the threshold is 500 million dollars or more in total assets. A L M First Financial Advisors, LLC., a Securities and Exchange Commission registered investment advisor, requested the investment pilot program.

The requested pilot program would allow complex federal credit unions to invest in a series of non-registered investment funds comprised of consumer loans, as follows:

The pilot fund would be comprised of permissible consumer loans for federally insured credit unions with maturities of less than 10 years and overnight investments.

Federal credit unions must be complex and have a capital adequacy classification of well capitalized to invest in the fund and are limited to an aggregate investment of 50 percent of net worth as defined in part 702 of N C U A’s regulations.

The pilot program is subject to the A L M First Loan Fund Investment Pilot Program Requirements and Conditions, which are available on the N C U A website.

Under part 703 of the N C U A’s regulations, federal credit unions are authorized to invest in funds that are registered with the S E C or regulated by the Office of the Comptroller of the Currency, provided the underlying assets purchased by the fund are permissible under N C U A rules for federal credit unions.

This concludes the press release

If your Credit union could use assistance with your exam, reach out to Mark Treichel on LinkedIn, or at mark Treichel dot com. This is Samantha Shares and we Thank you for listening.

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