Today we filed a comment letter with the NCUA on its proposed investment rule for bank notes.  The NCUA Board proposed a rule at its October Board meeting to amend the agency’s investment and deposit regulation in Part 703.  The proposed rule would amend the maturity requirement for bank notes to be permissible investments for federal credit unions (FCU) by removing the word ‘‘original’’ from § 703.14(f)(5). 

This proposed rule would permit FCUs to purchase bank notes that had original maturities of 5 years or more but have remaining maturities of less than 5 years.  As with the current rule, credit unions would only be allowed to purchase bank notes with maturities of less than 5 years.  This proposal, if finalized, should increase credit union access to bank notes, which could lower investment costs and/or increase net returns.  Our comment letter supported this proposed amendment as it removes barriers from credit unions by increasing access to investments.