CUs could get equal treatment with banks, thrifts on broker/dealer rule

<p>WASHINGTON-On June 12, the Securities and Exchange Commission (SEC) issued a request for comments regarding whether federally insured credit unions should be permitted to sweep accounts into no-load money market funds without registering as a broker-dealer. A similar proposal was also issued by the Office of Thrift Supervision recently concerning savings associations. Sweep accounts occur when the financial institutions takes funds from a noninterest-bearing account and put them overnight into an interest bearing product. SEC was prompted by a request from Evangelical Christian Credit Union of Anaheim, California. Both CUNA and NAFCU plan on submitting comment letters on the issue before the 30-day deadline closes. CUNA had already written a letter, prior to the comment request, urging equal treatment of credit unions. The group has also met with SEC officials who were “receptive” to the idea of allowing credit unions similar exemptions to the banks and thrifts. “NAFCU has been a strong proponent of exempting federal credit unions from the definition of broker and dealers in connection with offering sweep accounts, but beyond this specific request for comment, exemptions for other areas credit unions engage in including third party brokerage arrangements and safekeeping and custodial activities. In this context, we believe SEC’s request for comment is a positive development,” NAFCU Communications Manager John Zimmerman said. Of course not everyone is happy with the potential for credit unions to have the same authorities as banks in any instance. American Bankers Association Spokesperson on credit union issues Charlotte Birch remarked, “This just brings credit unions one step closer to being banks and full service financial service providers.”</p>