The NCUA board approved this week an investment pilot program that will allow well-capitalized federal credit unions to invest in securities under specific terms.  

The pilot program, authorized under section 703.19(c) of the agency’s regulations, permits up to 30 complex federal credit unions to invest in a series of non-registered investment funds comprised of consumer loans. 

Specifically: 

• 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; and
• In addition to being complex and having a capital adequacy classification of well capitalized, participating federal credit unions are limited to an aggregate investment of 50% of net worth as defined in part 702 of NCUA’s regulations. 

The pilot program was requested by investment advisor ALM First Financial Advisors, LLC, and is subject to the Anti-Money Laundering First Loan Fund Investment Pilot Program Requirements and Conditions, available on the NCUA website.