The National Credit Union Administration (NCUA) Board has approved an investment pilot program under section 703.19(c) of the NCUA's regulations. This decision allows up to 30 complex federal credit unions to engage in certain investment activities not permitted under part 703 but allowed by the Federal Credit Union Act. The request for this pilot program came from ALM First Financial Advisors, LLC., a registered investment advisor with the Securities and Exchange Commission.
The new pilot program will enable complex federal credit unions to invest in non-registered investment funds that consist of consumer loans. These loans must have maturities of less than ten years and include overnight investments. Participation is restricted to federal credit unions classified as well-capitalized according to part 702 of NCUA’s regulations, and these institutions are limited to investing up to 50 percent of their net worth.
Details about the ALM First Loan Fund Investment Pilot Program Requirements and Conditions can be found on the NCUA website. As per part 703 of the NCUA’s regulations, federal credit unions are authorized to invest in funds registered with the SEC or regulated by the Office of the Comptroller of the Currency, provided that these investments align with NCUA rules.
The NCUA is an independent federal agency established by Congress to regulate, charter, and supervise federal credit unions. It operates with full backing from the United States government and manages the National Credit Union Share Insurance Fund, which insures deposits for over 135 million account holders across both federal and most state-chartered credit unions. Additionally, it plays a role in consumer protection and financial literacy education.
For media inquiries regarding this development, Joe Adamoli can be contacted at JAdamoli@ncua.gov or via phone at 703-518-6572.