WASHINGTON (5/29/13)--The National Credit Union Administration this month issued a legal opinion letter that states that federal credit unions are authorized to invest in obligations that are fully guaranteed by the Overseas Private Investment Corp. (OPIC). The opinion could have positive consequences for both credit unions and for overseas cooperatives, according to the World Council of Credit Unions, which sought the agency opinion.
NCUA General Counsel Michael McKenna wrote in the May 14 opinion, "Federal credit unions are authorized to invest in, among other things, 'obligations, participations, securities, or other instruments of, or fully guaranteed as to principal and interest by any ...agency of the United States ...OPIC is an agency of the United States."
The OPIC-guaranteed investments, debentures called Certificates of Participation (COPs), carry a full faith and credit U.S. government guarantee, similar to U.S. Treasury notes but generally with a higher yield. OPIC uses the funds from the notes to make loans in connection with projects overseas, and the investments from credit unions would be used for credit union or other cooperative development projects.
The credit union COPs investments would help foreign cooperative development on another level, by also enabling the use of government funds for such projects, according to WOCCU. To use its government funds to support, for example, cooperative development in African countries, OPIC must bring also private U.S. money, such as that invested by U.S. credit unions, into the project.