New fixed-rate, longer term certificate aims to woo credit unions to invest in CIF

MADISON, Wis. – Credit unions wanting more flexibility in pinpointing where their investments are structured based on market fluctuations have a new option. The National Credit Union Foundation (NCUF) and U.S. Central Credit Union are offering a three-year fixed rate, fixed term share certificate that will enable credit unions to more precisely determine the extent of their investment in the Community Investment Fund (CIF), a source that provides funds for national and state level development initiatives, grant making and endowments. A number of credit unions have requested an alternative to the current 90-day rate, which was the only option previously available, said Bruce Wheeler, NCUF’s director of donor and public relations. “The new certificate allows credit unions to make a longer commitment to CIF and with the changes in the rate environment, they know what the (certificate’s) rate will be for the next three years,” Wheeler said. Currently, 275 credit unions in 26 states have invested $40 million in the CIF. Since 1980, the foundation has given more than $8.4 million in grants, including more than $1.5 million in disaster relief for victims of the Oklahoma City bombing, hurricanes Hugo and Mitch, the Northridge earthquake and other natural disasters. NCUF has also contributed more than $375,000 for National Model Programs and scholarships to CUNA Management Schools, Development Education Training and other credit union educational programs. NCUF has also restructured suggested levels of investment for the CIF. Effective immediately, the single suggested level of investment, regardless of asset size is 1/10 of 1% of assets, or $1 million. The new recommendation is based on the historical data of actual investments over the past two years. Wheeler said NCUF welcomes and appreciates investments below the suggested amount. The foundation has designated special recognition depending on investments based on the following: * investor circle: investments of less than 1/10 or 1% of assets; * leadership circle: 1/10 of 1% of assets, or $1 million (the suggested level); * chairman’s club: 1/4 of 1% of assets, or more than $2 million. Credit unions investing in CIF through their corporate credit union are guaranteed a minimum return of 3%. A maximum of 2% is distributed to the NCUF, half of NCUF’s return is distributed, pro-rata, back to the state credit union foundations or credit union leagues in the states of investment origin. CIF is a three-way partnership between NCUF, the Association of Corporate Credit Unions and the American Association of Credit Union Leagues. Credit unions in North Carolina lead the way in CIF investments with $8.7 million, with Illinois in second place with $6.6 million. -